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Poverty in India, Types, Causes & Latest Updates about Poverty in India

Poverty in India

When poverty is characterized by a severe shortage of basic necessities including food, clothing, and housing it is said to be as Poverty. It is frequently characterized by social marginalization, a lack of opportunity for personal development, and a lack of access to the resources and services necessary to maintain a respectable quality of living. Rapid population growth, slow economic development, unemployment, income disparity, price increases, political considerations, and social factors are some of the causes of poverty in India. We shall go into great detail on the causes of poverty in India in this essay.

Poverty levels below 5% in India

According to NITI Aayog’s CEO, less than 5% of Indians are now below the poverty line, with extreme destitution nearly eradicated, based on the Household Consumption Expenditure Survey. Rural incomes are rising faster than urban ones, narrowing the urban-rural consumption gap. Lower food spending and increased expenditure on consumer goods suggest improved incomes and changing lifestyles. With a rise in diverse food consumption, poverty is estimated below 5%. Social welfare schemes and rising consumption indicate destitution is almost eliminated, with over 25 crore people lifted out of poverty. India’s growth appears broad-based, challenging narratives of rural stagnation.

Poverty in India Background

Before the 1990s, when India had a closed economy, all of its residents had access to the resources they needed through the public distribution system. However, because of budgetary limitations and policy changes brought about by India’s entry into the global economy, the government was only able to deliver the resources that were required to the target population—those who were deserving of government aid.

The government eventually adopted the Targeted Public Distribution System as a result. In other words, individuals who fall below the poverty line received food that was subsidized by the government. Given that poverty has a wide range of causes and characteristics; it is challenging to define it precisely. It is different from city-country, rural-urban, etc. To put it another way, different viewpoints are used to define poverty.

However, the overall notion is that someone is considered to be living in poverty when they have less access to and affordability for necessities like food, clothing, and a place to live, healthcare, education, etc. Purchasing Power Parity and nominal relative basis are used by the UN and the World Bank to calculate poverty. As a result, different perceptions lead to different poverty estimations.

Types of Poverty in India

Absolute poverty

It is the inability to obtain necessities for sustaining life, such as food, clothing, housing, etc. If a person cannot meet their fundamental necessities, they are seen to be poor. Countries designate a specific sum of money necessary to purchase a certain number of important food items based on a list of these things. People are considered poor and below the poverty line (those earning less than the amount designated for buying these products) if they are unable to purchase these items. It is referred to as absolute poverty.

Relative Poverty

Contrarily, individual poverty in India is contrasted. For instance, if I make Rs. 100 and my neighbour makes Rs. 200, I am significantly poorer than my neighbour.

Ability-Based Approach: Amartya Sen, a Nobel Prize winner, has advanced this theory. It examines poverty from the perspective of a person’s capabilities. To conduct a successful professional life and make a living, a person has to be educated and in good health. Lack of options for obtaining education and good health might make it difficult for someone to get employment, which can result in poverty. Some therefore urges the government to concentrate its spending and decision-making on enhancing public health and education.

Causes of Poverty in India

In India, poverty has several causes and is now one of the main social problems. In India, a sizable portion of the population suffers from poverty. In India, consumption expenditure is used to estimate poverty rather than income levels. Rapid population growth, slow economic development, unemployment, income disparity, price increases, political considerations, and social factors are some of the causes of poverty in India.

Poverty in India: Economic Causes

The main economic causes of poverty in India include a low tax base, high levels of tax evasion, and wealthy individuals avoiding paying taxes. the creation of a vicious cycle whereby impoverished individuals pay less taxes, which in turn results in less money being spent on assistance programmes for the poor.

Poverty and the creation of problems like Naxalism, which feeds poverty further, are both caused by regional disparity, as seen in North East and East India. The economic causes of poverty in India are corruption and leaks in government schemes and programmes. Many Poverty Alleviation Programmes have been launched by the government in India, however due to a lack of understanding, people are not taking advantage of them.

Despite the fact that more than 50% of the population is employed in agriculture, it only accounts for 15% of GDP, concealing unemployment in the industry. Higher unemployment rate in India is one of the major cause of poverty at some extent. It demonstrates that the agricultural industry is where the majority of the impoverished are concentrated. Growth in unemployment that began after 1990, when, despite an increase in GDP, the majority of jobs were generated in skilled industries, preventing revenue from trickling down to the lower socioeconomic echelons of society.

Poverty in India: Social Cause

Social factors like untouchability, caste system, etc., are major Causes of Poverty in India.

  • Untouchability: People from lower castes are denied democratic rights in several of the nation’s less developed regions. They are cast aside by society, which contributes to one of India’s causes of poverty by forcing them into poverty.
  • Caste System: The caste system divides society and keeps people from looking for employment outside of their caste. As a result, the wealthiest get richer and the poor get poorer.
  • Unethical use of Power: When power is abused, poor people suffer a number of negative effects. One of the main causes of poverty in India is the corrupt government.

Poverty in India: Geographical Causes

In the past 45 years, India’s population has grown by 2.2% year, directly affecting the demand for resources. The fertility of the soil varies from place to place and differs from one location to another. It causes barren fields and is one of India’s primary causes of poverty. In terms of poverty, the differences between urban and rural life have a variety of effects.

Poverty in India: Climatic Factors

Another factor contributing to India’s poverty is the country’s unstable political environment. A flood is a type of natural calamity that can significantly lower agricultural productivity. Poverty can result from this, which the government rarely attempts to combat. Drought is another climatic condition that contributes to poverty in India in addition to floods. Droughts are a frequent cause of poverty in most nations since they can endure for a very long time. Seasonal rainfall irregularities can also cause problems with poverty. One of the factors contributing to poverty in India is the disruption of predicted rainfall and agricultural output in several regions of the country.

Poverty in India Latest Update

According to a recent government estimate, India has seen a significant decline in poverty, with roughly 135 million people — or 10% of the population — fleeing it in the five years up to March 2021. According to the research, 343 million people in Uttar Pradesh, followed by Bihar and Madhya Pradesh, were the most people who have moved out of poverty.

According to the Multidimensional Poverty Index (MPI), poverty levels decreased most significantly in rural areas. Malnutrition, education, and sanitation are just a few of the 12 major characteristics that make up the MPI, and people who fall short in three or more of these categories are referred to as “MPI poor.”

Sharp drop in poverty

According to the report’s analysis of the 2019–21 National Family Health Survey, the percentage of the population living in poverty decreased from 25% in 2015–16 to 15% in 2019–21. The results are in line with a previous report by the United Nations Development Programme (UNDP), which claimed that in 2021, 16.4% of Indians lived in multidimensional poverty, down significantly from 55.4% in 2005.

Additionally, the UNDP projections showed that in India, the percentage of people living below the $2.15 per day poverty threshold had dropped to 10% in 2021.

Government’s role

The central government has put policies in place to help the underprivileged population, providing free food grain to about 800 million individuals, or about 57% of the nation’s 1.4 billion inhabitants. Additionally, states have provided considerable sums to subsidise electricity, healthcare, education, and other crucial services.

Poverty in India UPSC

Poverty is a problem that affects the entire country, not just one individual. It should also be addressed as quickly as feasible by using the proper solutions. In addition, eradicating poverty is now essential for the long-term, inclusive development of the population, society, nation, and economy. The UPSC syllabus includes the issue of poverty in India; hence applicants must be knowledgeable with all aspects of it. We have discussed the UPSC notes on the causes of poverty in this article to assist candidates as they study for the UPSC Prelims and UPSC Mains exams.

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Poverty in India FAQs

What is poverty in India briefly?

As per the methodology of the Suresh Tendulkar Committee report, the population below the poverty line in India was 354 million (29.6% of the population) in 2009–2010 and was 69 million (21.9% of the population) in 2011–2012.

What is the main poverty in India?

The Major Reasons for Poverty in India are the rising population, slow economic development, unemployment, unequal distribution of income and resources, etc.

What is poverty?

A poor household is defined as one with an expenditure level below a specific poverty line. The incidence of poverty is measured by the poverty ratio, which is the ratio of the number of poor to the total population expressed as a percentage.

What is the cause of poverty in India?

Lack of Capital and Entrepreneurship: The shortage of capital and entrepreneurship results in low level of investment and job creation in the economy. Social Factors: Apart from economic factors, there are also social factors hindering the eradication of poverty in India.

What are the causes of poverty in India?

Unequal distribution of land and other resources, less job opportunities, low growth rate of incomes, failure in promotion of economic growth and population control perpetuated the cycle of poverty.

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