Notes Class 11 Chapter 8 Economics Maharashtra Board

Poverty in India

Introduction

Poverty is a major issue in India, affecting many people. It is a socio-economic problem where some sections of society are excluded from basic needs and opportunities. This exclusion is called social exclusion. Poverty has been a challenge since British rule due to economic exploitation, decline of traditional industries, and famines. After Independence, the Indian government has worked to reduce poverty through planning, reforms, and programs like Garibi Hatao (Remove Poverty).

Meaning of Poverty

Poverty means when people cannot afford basic needs like food, clothing, and shelter due to low income. It is not just about money but also about lacking opportunities and capabilities.

Multi-dimensional Poverty

Modern poverty is more than just lacking basic needs. It includes:

Material Dimensions: Lack of food, clothing, shelter, healthcare, education, electricity, clean water, roads, and sanitation.
Non-material Dimensions: Social discrimination and lack of freedom (e.g., economic, social, and political freedoms).

Amartya Sen’s View: Poverty is not only about money but also about not being able to achieve one’s full potential. It includes lack of freedom to meet hunger, access healthcare, education, or political rights. Sen’s work emphasizes that social reforms (like better education and health) are needed before economic growth.

Concepts of Poverty

Poverty is divided into two main types:

Absolute Poverty:

Measured by minimum calorie intake (2400 calories/day for rural areas, 2100 calories/day for urban areas, average 2250 calories/day).
Occurs when people cannot afford enough food to meet this calorie need.
Common in developing countries like India.
Can be eradicated with effective policies.

Relative Poverty:

Based on comparing living standards (income, wealth, consumption) between different groups.
Exists in all countries, even developed ones.
Cannot be fully eliminated but can be reduced through policies.

Poverty Line

The poverty line is an imaginary line that separates the poor from the non-poor. It is based on per capita household expenditure needed to meet basic needs.

Objectives of Poverty Line

Identify people Above Poverty Line (APL) and Below Poverty Line (BPL).
Measure household consumption to find the poor.
Track poverty over time and compare it across regions.
Estimate funds needed for poverty alleviation programs.

World Bank Definition

Poverty line: $1.90 per day (2011 prices, Purchasing Power Parity).
In 2011-12, 21.2% of India’s population was below this line.

Rangarajan Committee (2014)

Rural Poverty Line: Rs. 972/month (Rs. 32/day per person).
Urban Poverty Line: Rs. 1407/month (Rs. 47/day per person).
Poverty Ratio (2011-12): 30.9% (rural), 26.4% (urban), 29.5% (total).

Types of Poverty

Rural Poverty:
Found among small/marginal farmers, agricultural laborers, and landless workers.
Causes: Low agricultural productivity, droughts, poor infrastructure, illiteracy, lack of jobs, and rural debt.
Urban Poverty:
Found in cities due to migration of rural poor, lack of affordable housing, illiteracy, slow industrial growth, and poor infrastructure.
Leads to growth of slums and informal sector jobs, causing law and order issues.

Extent of Poverty

The poverty ratio measures the percentage of poor people in the population. Various committees have studied poverty in India since 1962.

State-wise Poverty Ratios (2011-12)

High Poverty: Chhattisgarh (39.9%), Jharkhand (36.9%), Bihar (33.7%), Odisha (32.6%).
Low Poverty: Kerala (7.1%), Himachal Pradesh (8.1%), Punjab (8.3%), Andhra Pradesh (9.2%).

Causes of Poverty

Population Explosion: Rapid population growth leads to unequal resource distribution.
Slow Economic Growth: Low agricultural and industrial growth results in low income.
Unemployment/Underemployment: Lack of jobs or low-paying jobs increases poverty.
Economic Inequalities: Unequal distribution of income, wealth, and land.
Lack of Infrastructure: Poor access to energy, transport, health, and education.
Inflation: Rising food prices reduce purchasing power, causing hunger and malnutrition.
Regional Imbalance: States like Bihar, Odisha, and Jharkhand have higher poverty due to less development.
Vicious Circle of Poverty (Ragnar Nurkse):
Low income → Low savings → Low investment → Low production → Less employment → Low income.
Other Causes:
Natural disasters (floods, droughts).
Discrimination (caste, religion, gender).
Corruption and inefficiencies in administration.
Leakages in public distribution systems.

Effects of Poverty

Slows economic growth.
Leads to low national and per capita income.
Causes low savings, investment, and capital formation.
Increases inequality and class conflicts.
Rises anti-social activities (crime) and anti-national activities.
Increases government spending on subsidies, leading to resource misallocation.
Causes environmental damage due to overuse of resources by the poor.

Sustainable Development Goals (SDGs)

Adopted by the UN in 2015, with 17 goals and 169 targets to be achieved by 2030.
SDG 1: End poverty in all forms.
India is committed to eradicating poverty by 2030.

Measures to Eradicate Poverty

Population Control: Family welfare programs to reduce population growth.
Agricultural Support: Cheap credit and Minimum Support Prices (MSP) for crops.
Rural Works: Employment through rural infrastructure projects (roads, irrigation).
Rural Industrialization: Promoting small-scale and cottage industries.
Minimum Wages: Ensuring fair wages for workers (Minimum Wages Act, 1948).
Public Distribution System (PDS): Subsidized food grains through ration shops.
Bank Nationalization: Providing low-interest loans to the poor (1969, 1980).
Progressive Taxation: Taxing higher incomes more to reduce inequality.
Education: Free and compulsory primary education, mid-day meals, and free education for girls.
Affordable Housing: Slum rehabilitation and housing schemes for the poor.
Health Facilities: Subsidized medical care through primary health centers and government hospitals.
Skill Development: Training programs to promote self-employment and entrepreneurship.

Poverty Alleviation Programs

Employment Guarantee Scheme (EGS): Wage employment.
Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS): Wage employment.
Swarnajayanti Gram Swarozgar Yojana (SGSY): Self-employment.
Jan Dhan Yojana (JDY): Financial inclusion.
Swachh Bharat Mission (SBM): Sanitation.
Sarva Shiksha Abhiyan (SSA): Education.
Antyodaya Anna Yojana (AAY): Food security.
Pradhan Mantri Awas Yojana (PMAY): Housing.
National Health Mission (NHM): Health.