# NCERT Folder 9th Economics Chapter 3 : Poverty As a Challenge

## Important Terms

• Poor : A poor person is the one who is lacking sufficient money to live at a standard considered comfortable or normal in a society.
• Some of the examples of poor people are : daily wage workers at construction sites, child labourers in dhabas, rickshaw-pullers, domestic servants, cobblers, beggars, etc.
• Poverty : Poverty is a state or condition in which a person or community lacks the financial resources and essentials to enjoy a minimum standard of life and well-being that’s considered acceptable in society.
• Indicators of poverty : Nowadays, poverty is looked through other indicators like illiteracy level, lack of access to health care, lack of job opportunities, lack of access to safe drinking water, social exclusion sanitation, etc. All these can be termed as indicators of poverty.
• Social exclusion : The concept of social exclusion states that poor people have to live in poor surroundings excluded from neighbourhoods of people who are better off.
• Poverty line : It is a measure based on levels of income and consumption by people to identify poor. The concept of poverty line is based on the fact that a person must have a minimum level of income and consumption to satisfy the basic needs of food, clothing, clean water, education and healthcare.
• Inter-state disparities : The proportion of poor people is not the same in every state. In 20 states and union territories, the poverty ratio is less than the national average. Odisha and Bihar are the poorest states of India with poverty ratios of 47 per cent and 43 per cent respectively. The lowest incidence of poverty is found in Jammu and Kashmir with poverty ratio of just 3.5 per cent.
• Global poverty scenario : There has been a substantial decline in global poverty. However, it is marked with great regional differences. Poverty has declined more in China and South-East Asian countries.
• Prime Minister Rojgar Yojana (PMRY) : The aim of this programme (which was started in 1993) was to create self-employment opportunities for educated unemployed youth in rural areas and small towns.
• Rural Employment Generation Programme (REGP) : REGP was launched in 1995 to create self-employment opportunities in rural areas.
• Swarnajayanti Gram Swarojgar Yojana (SGSY) : SGSY was started in 1999. The programme aims at bringing the assisted poor families above the poverty line.
• Pradhan Mantri Gramodaya Yojana (PMGY) : It was launched in 2000.
• Antyodaya Anna Yojana (AAY): for ‘the poorest of poors’ and elders.
• National Food for Work Programme (NFWP): was launched in 2004.
• National Rural Employment Guarantee Act (NREGA) : It was passed in September 2005. The Act provides 100-days assured employment every year to every rural household in 200 districts.

## Summary

### Poverty–Introduction, Indicators And Estimates

• Poverty can be defined as the lack of common things like food, clothing, shelter, safe drinking water, medical care and education, which determine the quality of life. Nearly 25% of our entire population lives in poverty. Poverty exists in both urban and rural India.
There are certain things that are common in the life of poor people in urban and rural India. These include hunger and malnutrition, lack of proper housing and shelter, no healthcare in case of illness and no regular job and income, lack of sanitation and safe drinking water, no education for children, hopelessness and ill-treatment.
• Social scientists use different types of indicators to understand poverty. The most commonly-used indicators relate to the levels of income of people and their consumption of goods.
• The concept of social exclusion states that poor people have to live in poor surroundings excluded from neighbourhoods of people who are better off. Social exclusion leads to lack of social equality and exclusion from facilities, benefits and opportunities enjoyed by others.
• Social exclusion can be both an effect and a cause of poverty. A person may be forced to live in poor surroundings, because he or she is poor. Social exclusion excludes people from equal opportunities of education, healthcare, employment and general quality of life. Vulnerability is the measure of the probability of certain groups of people becoming poor or remaining poor in future.
• Vulnerability is determined by the availability of options for employment, education and healthcare, etc. It is also determined by the ability of people to handle hard times and natural disasters like earthquakes, floods and tsunamis. Poor people are more vulnerable to poverty.
• Poverty Line and Vulnerable Groups (INDICATORS)
• The poverty line is a commonly used way to identify the poor. It is a measure based on levels of income and consumption by people to identify the poor. The concept of the poverty line is based on the fact that a person must have a minimum level of income and consumption to satisfy the basic needs of food, clothing, clean water, education and healthcare.
• When the income or consumption of a person falls below this minimum level, the person is considered to be poor. The minimum levels of requirement to determine the poverty line are different in different countries. In India, the determination of the poverty line takes into consideration the minimum requirements of food, clothing, footwear, fuel, power, education and healthcare for the subsistence of an individual.
• Minimum requirement of food is done by taking the minimum calorie requirement into consideration. In India, the minimum daily requirement is fixed at 2400 calories per person in rural areas and 2100 calories per person in urban areas.
• The cost of each item in the minimum requirements of food, clothing, footwear, fuel, power, education and healthcare is added up to find the minimum income required for a person to survive. In the year 2000, the monthly poverty line income was fixed at 328 rupees per person in rural areas, and 454 rupees per person in urban areas.
• Though the calorie requirement for the people in rural areas is more, their poverty line income is less than the people in urban areas.
• The poverty line income is fixed on per person basis. To find the poverty line for a family, this monthly income is divided by the number of members in the family.
The poverty line is revised periodically to accommodate rising prices and the changing requirements of people through nationwide surveys conducted by the National Sample Survey Organization. The percentage of population living under poverty line in India has reduced. Percentage of poor in rural areas is higher than in urban areas. Some groups and communities are more vulnerable to poverty than others.
• The groups most vulnerable to poverty are people belonging to the scheduled castes and tribes, casual labourers in urban areas and landless farm labourers in rural areas.
• Even within a family, some people are more vulnerable and suffer more than the others due to poverty, like the elderly, women and children, especially the girls. One of the biggest social evils associated with poverty is negligence towards the girl child.
• Estimates of Poverty : The incidence of poverty in India was around 55 per cent in 1973 which declined to 36 per cent in 1993 and further to 26 per cent in 2000.
• Social groups which are most vulnerable to poverty are Scheduled Caste and Scheduled Tribe households.

### Inter-State Disparities And Global Poverty Scenario

• The poverty ratio or the percentage of population living in poverty is not uniform all over the country. It varies across different states.
• Odisha with a poverty ratio of 47% and Bihar with a poverty ratio of 43% are the two poorest states in India. The poverty ratios in Madhya Pradesh, Assam, Tripura and Uttar Pradesh are also much higher.
• The states that have shown the most significant decline in poverty are Jammu and Kashmir, Punjab, Haryana, Gujarat, West Bengal, Andhra Pradesh, Tamil Nadu and Kerala. The decline in poverty in Punjab and Haryana was driven by high agricultural growth rates after the Green Revolution in India.
• In West Bengal, the decline in poverty is associated with land reforms that aimed to improve the condition of small farmers and agricultural workers. In Andhra Pradesh and Tamil Nadu, a well-implemented public distribution system of food grains is the cause of the decline in poverty.
• Kerala has the highest literacy rate in India for both its male and female population. The focus on education, and training and development of human resources has led to the decline of poverty of Kerala.
• Global Scenario :
• According to the World Bank standard, the poverty ratio or percentage of population living below the poverty line in developing countries has come down from 28% in 1990 to 21% in 2001. The World Bank standard of poverty line states that all people living below $1 per day live in poverty. • Poverty has declined in most regions of the world like China, East Asia and Pacific, South Asia, Latin America and the Caribbean. Poverty in China, and East Asia and Pacific regions have declined more rapidly than in South Asia. • The rapid decline in poverty in China, East Asia and Pacific is associated with rapid economic growth and huge investments in human resource development in these regions. • The situation is very different in Sub-Saharan Africa, where the poverty ratio has actually risen from 41% in 1981 to 46% in 2001. Poverty has reappeared in some former socialist countries like Russia, where officially there was no poverty before. • The poverty ratio for India as per the World Bank standard appears higher than our national estimate of 26%. In the United Nations Millennium Summit held in September 2002, leaders from 189 countries signed a declaration pledging to reduce the number of people living below$1 a day to half of its 1990 figure by 2015.

### Causes Of Poverty, Anti-Poverty Measures And The Challenges Ahead

• The main causes of poverty in India include low economic growth during the colonial rule, population explosion, lack of job opportunities, irregular low-paying employment, inequitable distribution of resources and indebtedness.
• Anti-poverty measures taken by the Indian Government are based on two main objectives : Increasing economic growth in the country and launching anti-poverty programmes for specific groups of people. Economic growth provides more resources and opportunities for human resource development like education, training and healthcare.
• The Government of India has launched several anti-poverty programmes like the Prime Minister Rozgar Yojna, Rural Employment Guarantee Programme and Swarnajayanti Gram Swarozgar Yojna which are aimed at generating self-employment opportunities in rural areas.
• The Prime Minister Rozgar Yojna was launched in 1993 to create self-employment opportunities for educated, unemployed youths in rural areas and small towns. This programme assists such people in setting up small industries and business.
• The Rural Employment Guarantee Programme launched in 1995 also aims to generate self-employment opportunities in rural areas and small towns. The Swarnajayanti Gram Swarozgar Yojna started in 1999 aims at organising poor families into self-help groups and providing them bank loans and government subsidies to start small businesses and industries.
• The Antyodaya Anna Yojna was started in 2000 to provide food grain to poor families at subsidised rates. The National Food for Work Programme was launched in 2004 in the 150 most backward districts of the country. The National Rural Employment Guarantee Act was passed in 2005. This act provides assured employment of 100 days per year to every household in rural areas. One-third of these jobs are reserved for women.
• A person not provided employment within 15 days of registering under the National Rural Employment Guarantee Act, is entitled to a daily unemployment allowance.
• Human poverty extends beyond the traditional definition of poverty to include lack of housing, education, healthcare, job security, and lack of equal opportunities or dignity, due to discrimination based on caste, colour or gender.
• India’s future in combating poverty appears bright. Rising economic growth, falling population growth rate, radical schemes for free elementary education for all and empowerment of women and the weaker sections of society, should result in an appreciable reduction of poverty in the years to come.

## Intext Questions

Question.1. Discuss the following :
(a) Why do different countries use different poverty lines?
(b) What do you think would be the “minimum necessary level” in your locality?
Ans. (a) Basic needs in different countries are different. Therefore, different countries use different poverty lines.
(b) The minimum necessary level should not only include food requirements but also include medical and educational requirements.

Question.2. Observe some of the poor families around you and try to find the following :
(a) Which social and economic group do they belong to?
(b) Who are the earning members in the family?
(c) What is the condition of the old people in the family?
(d) Are all the children (boys and girls) attending schools?
Ans. (a) They are Scheduled Caste people and are agricultural labourer households.
(b) Both men and women work as agricultural workers.
(c) They are ‘the poorest of the poor.’
(d) Some of the boys are attending schools while most of the girls are denied educational opportunities.

Question.3. Graph 3.2 Poverty Ratio in Selected Indian States, 1999-2000. Study the Graph 3.2 and do the following :(a) Identify the three states where the poverty ratio is the highest.
(b) Identify the three states where poverty ratio is the lowest.
(b) (i) Jammu and Kashmir,
(ii) Punjab and
(iii) Haryana.

Question.4. Graph 3.4 Poverty Ratio in Selected Indian States, 1999-2000. Study the Graph 3.4 and do the following :(a) Identify the areas of the world, where poverty ratios have declined.
(b) Identify the area of the globe which has the largest concentration of the poor.
Ans. (a) Poverty has substantially fallen in China.
(b) Asia and Sub-Saharan Africa.

Question.5. (a) Some people say that the Bengal famine happened because there was a shortage of rice. Study the table and find out whether you agree with the statement?
(b) Which year shows a drastic decline in food availability?
Ans. (a) Yes, total food availability in the famine year (1943) was 79 which was less than that in 1942.
(b) The year 1941.

## NCERT Solution

Question.1. Describe how the poverty line is estimated in India.
Ans.

• In India, poverty has been defined as a situation in which a person fails to earn income sufficient to buy him bare means of subsistence. Bare means of subsistence consist of minimum physical quantities of cereals, pulses, milk, butter, etc. Thus the measurement of poverty line is based on the income or consumption levels.
• While determining the poverty line, the Planning Commission has fixed the minimum nutritional level of food energy at 2400 kilo calories per person per day for rural areas and 2100 kilo calories per person per day for urban areas. Those persons whose consumption levels falls below this minimum level are considered poor.
• Poverty line has also been determined on the basis of consumption expenditure. This again has been separately fixed for rural and urban areas. The level of consumption expenditure per person per month has been fixed at Rs 328 and Rs 454 for rural and urban areas separately.
• Those persons whose monthly consumption expenditure falls short of this level are treated as poor.

Question.2. Do you think that the present methodology of poverty estimation is appropriate?
Ans. The official definition of poverty line is not appropriate, as it is based on the minimum subsistence level of living rather than a reasonable level of living. It is suggested that the concept of poverty must be broadened so as to include other indicators such as basic education, health, drinking water, sanitation, etc. A large number of people may have been able to feed themselves. But they do not have education, health care, job security, gender equality, etc. Therefore, a proper definition of poverty should not only be given in terms of income level but should be based on their factors also.

Question.3. Describe poverty trends in India since 1973.
Ans. Poverty Trends in India : The Planning Commission of India has made estimations about the incidence of poverty since the early 1970s. These estimates are given in the following table :

Poverty ratio (%)Number of poor (in millions)
YearRuralUrbanCombinedRuralUrbanCombined
1973-7456.449.054.926160321
1993-9437.332.436.024476320
1999-0027.123.626.119367260

Source : Economic Survey 2002-03, Ministry of Finance, Government of India.
Table shows that there is a substantial decline in the poverty ratio in India from about 55 per cent in 1973 to 36 per cent in 1993. This ratio has further come down to about 26 per cent in 2000. Although the poverty ratio during 1973-93 declined but the number of poor remained stable at around 320 million during this period of two decades. It may also be noted that poverty ratio always remained higher in rural areas compared to urban areas.

Question.4. Discuss the major reasons for poverty in India.
Ans. The major causes/factors responsible for existence of poverty in India are discussed below :
(1) Fast Population Growth Among the Poor : The rapid growth of population, particularly among the poor, is considered one of the major causes behind Indian poverty. Poor people are illiterate and have traditional outlook. Hence, they are either ignorant of birth control measures or not convinced of the need of birth control. Moreover, they consider male child as an asset, that is, as a source of income and a source of security during old age.
(2) Low Rate of Economic Development : The actual rate of growth in India has always been below the required level. It has been around 4 per cent since 1951. This has resulted in less job opportunities. This was accompanied by a high growth rate of population.
These two combined kept the growth rate of per capita income very low. The failure at both fronts — promotion of economic growth and population control — aggravated the problem of poverty.
(3) Unemployment : Another important factor that can be held responsible for the incidence of high poverty in India is the high degree of unemployment and underemployment. The job seekers are increasing at a higher rate than the increase in the employment opportunities.
(4) Unequal Distribution of Income : Although national income of India has been increasing since 1951, it was not properly distributed among different sections of the society. A large proportion of increased income has been pocketed by a few rich. They become richer. Consequently, the majority of people have to live below the poverty line.
(5) Social Factors : Various social factors, viz., caste system, joint family system, religious faiths, law of inheritance, etc., have blocked the path of economic development. For example, because of religious beliefs, people regard poverty as God given. Similarly, joint family system has prevented people from doing hard work and made them dependent.

Question.5. Identify the social and economic groups which are most vulnerable to poverty.
Ans. Social Groups Vulnerable to Poverty :
(i) Scheduled caste households
(ii) Scheduled tribe households
Economic Groups Vulnerable to Poverty :
(i) Rural agricultural labour households
(ii) Urban casual labour households.

Question.6. Give an account of inter-state disparities in poverty in India.
Ans. There are wide disparities in poverty across the country. The poverty ratio is not the same in every state. Recent estimates show that in 20 states and union territories, the poverty ratio is less than the national average. Orissa and Bihar continue to be the two poorest states with poverty ratios of 47 and 43 per cent respectively. In comparison, there has been a significant fall in poverty ratio in the states of Kerala, Jammu and Kashmir, Andhra Pradesh, Tamil Nadu, Gujarat and West Bengal. States like Punjab and Haryana have continuously succeeded in reducing their poverty ratio to 6.16 per cent and 8.7 per cent respectively. The lowest incidence of poverty is found in Jammu and Kashmir with a poverty ratio of 3.5 per cent.

Question.7. Describe global poverty trends.
Ans. The proportion of people in developing countries living in poverty has declined from 28 per cent in 1990 to 21 per cent in 2001. Although there has been a substantial reduction in global poverty, there are great regional differences visible. Poverty has substantially fallen in China and South-East Asian countries. The number of poor in China has drastically come down from 606 million in 1981 to 212 million in 2001. But the decline in poverty in India, Pakistan, Sri Lanka, Nepal, Bangladesh, Bhutan has not been so rapid. Despite decline in the poverty ratio, the number of poor has declined marginally from 475 million in 1981 to 428 million in 2001. However, in Sub-Saharan Africa, poverty rose from 41 per cent to 46 per cent during the same period.

Question.8. Describe the current government strategy of poverty alleviation.
Ans. The current government strategy towards poverty alleviation has broadly been two-dimensional :
(1) Promotion of economic growth and,
(2) Anti-poverty programmes.
1. Economic Growth : To fight against poverty our government laid emphasis on promotion of economic growth. This strategy is based on the belief that the benefits of economic growth would automatically ‘trickle down’ to the poor people in form of more
employment and more income.
2. Anti-Poverty Programmes : With a view to launch a direct attack on poverty, our government formulated several schemes to benefit the poor. Important among them are :
1. Prime Minister Rojgar Yojana
2. Swarna Jayanti Gram Swarojgar Yojana
4. Sampoorna Grameen Rojgar Yojana
5. National Rural Employment Guarantee Act
Through the programmes, the government has tried to help the poor by way of income generation, wage employment and asset building. However, the results of there programmes have not been so satisfactory as were desired.

Question.9. Answer the following questions briefly :
(i) What do you understand by human poverty?
(ii) Who are the poorest of the poor?
(iii) What are the main features of the National Rural Employment Guarantee Act, 2005?
Ans. (i) Human Poverty : Human poverty is a wider concept than poverty. It refers to the lack of human development. It reflects the state of deprivation in the society. It is measured in Human Development Index and Human Poverty Index.
(ii) The Poorest of the Poor : People from poor families like old people, women and female infants are the poorest of the poor. These people are denied equal access to resources available to the family.
(iii) Main Features of National Rural Employment Guarantee Act, 2005

1. NREGA provides 100 days assured employment every year to every rural household in 200 districts. Later, the scheme will be extended to 600 districts. One-third of the proposed jobs would be reserved for women.
2. The central government will establish a National Employment Guarantee Fund. Similarly, state governments will establish State Employment Guarantee Funds for the implementation of the scheme.
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