Revision Notes of Economics for Class 9 Chapter 3 Poverty as a Challenge

Revision Notes of Economics of Chapter 3 deals with the Poverty Challenges in India.

Roughly 270 million (or 27 crore) people in India live in poverty (2011-12). This also means that India has the largest single concentration of the poor in the world. This illustrates the seriousness of the challenge.
Apart from being poor, poverty also has various other dimensions like hunger, lack of shelter, inability to access education, healthcare, clean water and sanitation. Above all, it means living with a sense of helplessness.

Social scientists’ view of poverty based on social exclusion and vulnerability is now becoming very common, now poverty is looked through other social indicators like

1. Illiteracy level
2. Lack of general resistance due to malnutrition
3. Lack of access to healthcare
4. Lack of job opportunities
5. Lack of access to safe drinking water, sanitation etc.

Poverty Line

A person is considered poor if his or her income or consumption level falls below a given “minimum level” necessary to fulfil the basic needs. As means to fulfil these basic needs vary therefore, poverty line may vary with time and place.

• In India, the physical quantities of basic needs are multiplied by their prices in rupees.
• The present formula for food requirement while estimating the poverty line is based on the desired calorie requirement. The accepted average calorie requirement in India is 2400 calories per person per day in rural areas and 2100 calories per person per day in urban areas.

Global Poverty Scenario

The proportion of people in different countries living in extreme economic poverty has fallen from 36 per cent in 1990 to 10 per cent in 2015.

Poverty Estimate Trends in India

• There is a substantial decline in poverty ratios in India from about 45 per cent in 1993-94 to 37.2 per cent in 2004–05 to about 22 per cent in 2011–12.
• Although the percentage of people living under poverty declined in the earlier two decades (1973–1993), the number of poor declined from 407 million in 2004–05 to 270 million in 2011–12 with an average annual decline of 2.2 percentage points during 2004–05 to 2011–12.

Distribution of Poverty in India

Vulnerable Groups

1. Certain social groups like Scheduled Caste, Scheduled Tribe and economic groups like rural agricultural labourers and urban casual labourers are more vulnerable to poverty.
2. There is inequality of incomes within a family. In poor families all suffer, but some suffer more than others. In some cases, women, elderly people and female infants are denied equal access to resources available to the family.

Inter-State Disparities

1. The proportion of poor people is not the same in every state.
2. States like Bihar and Odisha have poverty levels above all India levels.
3. States like Punjab and Haryana have traditionally succeeded in reducing poverty with the help of high agricultural growth rates. Kerala has focused more on human resource development.
4. In West Bengal, land reform measures have helped in reducing poverty. In Andhra Pradesh and Tamil Nadu public distribution of food grains could have been responsible for the improvement.

Causes of Poverty in India

1. Low level of economic development under the British colonial administration (Historical reason). This resulted in less job opportunities and low growth rate of incomes, accompanied by a high growth rate of population. The two combined to make the growth rate of per capita income very low.
2. Limited effects of Green revolution to some parts of India.
3. The industries, both in the public and the private sector, did not provide enough jobs to absorb all the job seekers. Jobless people started living in slums in bad living conditions due to irregular income, which made poverty an urban phenomenon as well.
4. Huge income inequalities, primarily due to unequal land and other resource distribution.
5. Other socio-cultural and economic factors like

• • Spending a lot of money to fulfil social obligations and observe religious ceremonies.
  • Buying of agricultural inputs like seeds, fertilizer, pesticides etc by the small farmers with borrowed money. Unable to repay because of poverty, they become victims of indebtedness. So, the high level of indebtedness is both the cause and effect of poverty.

Anti-Poverty Measures

The current anti-poverty strategy of the government is based broadly on two planks:

Promotion of Economic growth

1. The growth rate jumped from the average of about 3.5 per cent a year in the 1970s to about 6 per cent during the 1980s and 1990s. The higher growth rates have helped significantly in the reduction of poverty.
2. Therefore, it is becoming clear that there is a strong link between economic growth and poverty reduction.
3. Economic growth widens opportunities and provides the resources needed to invest in human development.

Targeted Anti-poverty Programmes:

1. Mahatma Gandhi National Rural Employment Guarantee Act, 2005 aims to provide 100 days of wage employment to every household to ensure livelihood security in rural areas. It also aimed at sustainable development to address the cause of draught, deforestation and soil erosion. One-third of the proposed jobs have been reserved for women.
2. Prime Minister Rozgar Yozana (PMRY) aimed at creating self-employment opportunities for educated unemployed youth in rural areas and small towns.
3. Rural Employment Generation Programme (REGP) aimed at creating self-employment opportunities in rural areas and small towns.
4. Swarnajayanti Gram Swarozgar Yojana (SGSY) aimed at bringing the assisted poor families above the poverty line by organising them into self-help groups through a mix of bank credit and government subsidy.
5. Pradhan Mantri Gramodaya Yozana (PMGY): Additional central assistance is given to states for basic services such as primary health, primary education, rural shelter, rural drinking water and rural electrification.

Problems in implementation

1.  Lack of proper implementation and right targeting are the major reasons for less effectiveness of these measures.
2. Moreover, a lot of overlapping of schemes is there.
3. Despite good intentions, the benefits of these schemes are not fully reached to the deserving poor.

Therefore, the major emphasis in recent years is on proper monitoring of all the poverty alleviation programmes.

The Challenges Ahead

Poverty has certainly declined in India. But despite the progress, poverty reduction remains India’s most compelling challenge.

• Wide disparities in poverty between rural and urban areas and among different states.
• More vulnerabilities of certain social and economic groups to poverty.
• The official definition of poverty, however, captures only a limited part of what poverty really means to people. It is about a “minimum” subsistence level of living rather than a “reasonable” level of living.
• Except food, other social indicators of poverty like education levels, access to shelter, provision of healthcare facilities and above all basic human dignity of the poor in societal setting, need to be bridged.

Future Outlook

• In a nutshell, poverty reduction is expected to make better progress on the back of higher economic and
  infrastructural growth, however with this growth the definition of what constitutes poverty will also change, and our success will lie in evolving and implementing corrective measures in line with this moving target of poverty reduction.

Interesting points

Social exclusion: Poor having to live only in a poor surrounding with other poor people, excluded from enjoying social equality of better-off people in better surroundings.
Vulnerability to poverty: A measure, which describes the greater probability of certain communities of becoming, or remaining, poor in the coming years.