Economics Notes: Poverty as a Challenge
Introduction to Poverty
Definition: Poverty is the inability to fulfill basic needs such as food,
clothing, shelter, education, and healthcare.
Types of Poverty:
o Absolute Poverty: A fixed standard of measuring poverty
based on basic subsistence levels.
o Relative Poverty: A comparison of wealth across di erent
individuals or groups within a society.
Indicators of Poverty
1. Income Level: Below the poverty line (BPL), defined by earning less
than ₹32/day in rural areas and ₹47/day in urban areas (as per earlier
estimates in India).
2. Consumption Level: Insu icient calorie intake (2400 calories/day in
rural and 2100 calories/day in urban areas).
3. Human Development Indicators: Lack of access to healthcare,
education, and clean drinking water.
Causes of Poverty
1. Economic Factors:
o Unemployment and underemployment.
o Unequal distribution of resources.
o Low agricultural productivity and landlessness.
2. Social Factors:
o Caste and gender discrimination.
o Illiteracy and lack of skills.
3. Political Factors:
o Corruption and ine icient implementation of policies.
4. Historical Factors:
o Colonial exploitation leading to economic drain.
Extent of Poverty in India
Current Scenario: India has witnessed a decline in poverty from 45%
in 1993-94 to about 22% in recent years (adjust for the latest
statistics if needed).
Global Comparison: India contributes significantly to the global
poverty numbers due to its large population.
Consequences of Poverty
1. Social Issues:
o Malnutrition, child labor, and illiteracy.
o Social unrest and increased crime rates.
2. Economic Issues:
o Reduced productivity.
o Hindered national growth and development.
Steps Taken to Alleviate Poverty
1. Government Programs:
o Mahatma Gandhi National Rural Employment Guarantee
Act (MGNREGA): Provides 100 days of wage employment.
o Public Distribution System (PDS): Ensures food security for
the poor.
o National Rural Livelihood Mission (NRLM): Promotes self-
employment.
o Pradhan Mantri Awas Yojana: A ordable housing.
o Mid-Day Meal Scheme: Improves nutrition among children.
2. Economic Reforms:
o Promoting small-scale industries.
o Encouraging foreign investment and economic liberalization.
Challenges in Reducing Poverty
Corruption and leakages in schemes.
Overpopulation leading to resource strain.
Regional disparities in development.
Ine ective targeting of beneficiaries.
Way Forward
1. Improved Governance: Transparency and accountability in the
implementation of welfare schemes.
2. Education and Skill Development: Empowering the workforce for
better employment opportunities.
3. Inclusive Growth: Reducing income inequalities and ensuring
equitable resource distribution.
4. Community Participation: Involving local communities in planning
and execution.
Conclusion
Poverty remains a significant challenge for India despite progress in
alleviating it.
A multi-pronged approach combining economic growth, social
equity, and e ective governance is essential to eradicate poverty.
