Economics
Chapter – 3
Poverty as a Challenge
Introduction
• Poverty can be defined as lack of daily requirements of livelihood like food, clothing, education etc.
• The poor could be landless labourers in villages or people living in overcrowded jhuggis in urban areas.
• Every 4th person in India is poor. India has the largest single concentration of the poor in the world.
Poverty as seen by Social scientists
(i) Social Exclusion
(ii) Vulnerability
(i)Social exclusion
• For analysis of poverty, social exclusion is very useful. As per this concept poverty must be seen in
terms of the poor living only in a poor surrounding with other poor people.
(ii)Vulnerability
• Vulnerability describes the greater probability of being more adversely affected than other people, which
is done due to earthquake or simply a fall in the availability of jobs.
• Measurement of vulnerability to poverty describe the greater probability of certain communities i.e.,
members of a backward caste or individuals i.e. a widow or a physically handicapped person.
Poverty Line
• Poverty line is a way which is used to identify the poor. It is a method used to measure poverty. In this
method poverty is measured with the help of consumption and income level of the people.
• If the level of income and consumption falls below the minimum level of income and consumption of
this line, then the person is considered to be poor.
Causes of Poverty
(a) Low growth rate:
• During the British colonial administration, the rate of growth was very low which was the
basic cause of poverty.
(b) Discouragement of development of industries and handicrafts Products:
• Discouragement of development of industries and handicrafts Products is one historical
reason of poverty. The policies of the colonial government discourage development of
industries, like textile industries which is the basic source of income of the poor. An
uneducated person can easily get job in this type of industries as labour and sustains his
live hood.
• Discouragement of handicrafts Products is also a major causes of poverty, during the
British colonial administration. The households can easily earn money by the way of to
produce handicrafts products.
(c) High growth rate of population:
• The population is increasing instead of low level of income. Which becomes cause of
poverty.
(d) Huge income inequalities
• There are huge income inequalities between have or have not. For this term, huge income
inequalities makes it difficult to properly implement the poverty elimination policies of
government. Therefore , it is the major cause of poverty.
(e) Lack of land resources:
• Lack of land resources is the also major cause of poverty. Incomes of the villagers are
fully based on agriculture income and lack of land resources creates low level of
agriculture income which becomes the major cause of poverty.
Anti-Poverty Measures
Anti-poverty strategy of the government is based broadly on two plank:
(1) Promotion of economic growth
(2) Targeted anti-poverty programmes
(1)Promotion of economic growth:
•According to official poverty estimation, the growth rate jumped from the average of about 3.5 percent a year
in the 1970s to about 6 percent during the 1980s and 1990s. With the help of high rate of growth, reduction of
poverty is possible.
• It shows a link between poverty reduction and economic growth. Therefore, promotion of economic growth
helps to reduce poverty.
(2)Targeted anti-poverty programmes:
(a) National Rural Employment Guarantee Act (NREGA)
It was launched in September 2005 and it 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. In this Act if an applicant is not provided employment within fifteen days, then
he/she will be entitled to a daily unemployment allowance. The central government and state governments will
also establish National Employment Guarantee Funds and State Employment Guarantee Funds for
implementation of the scheme.
(b) Prime Minister Rojgar Yojana (PMRY)
Prime Minister Rozgar Yozana (PMRY) was launched on 2nd October, 1993. The objective of the programme is
to create self-employment opportunities for educated unemployed youth in rural areas and small towns. It also
helped in setting up small business and industries.
(c) Swarnajayanti Gram Swarozgar Yojana (SGSY)
This programme was launched on 1 st April, 1999. The objective of this programme is to help rural people to
organise themselves into self help groups by the way of promoting enterprises at the village level. This
programme helps to exist poor families above the poverty line. In this programme the government provides
subsidy and bank credit to the rural people for generating the income.
(d) Rural Employment Generation Programme (REGP)
This programme was launched in 1995. The target of this programme is to provide 25 lakh new jobs to the rural
and small towns persons under the Tenth Five Year plan.
(e Pradhan Mantri Gramodaya Yozana (PMGY)
This programme was launched in 2000. The objective of this programme to develop standard of living of the
rural people by the way of focus in five critical areas i.e primary health, primary education, rural shelter, rural
drinking water and rural electrification.
(f Sampoorna Grameen Rojgar Yojana (SGRY)
This programme was launched in september , 2001.The Employment Assurance Schemes and JGSY would be
merged with SGRY.The aim of the programme is to provide wage employment and to create durable
community, social and economic assets.
The Challenges Ahead
• Poverty reduction remains India’s most compelling challenge despite the progress. Because of unequal
distribution of income, increase in population etc.
• The positive situation can be done by the way of higher economic growth, increasing stress on universal free
elementary education, declining population growth, increasing empowerment of the women and the
economically weaker sections of society, providing health care, education and job security.
• Unemployment:Unemployment is a situation where a person have not job despite of he/she able to do job. It
is a big cause of poverty. Unemployment is also a situation of being joblessness when people are in condition of
without job and in situation of seeking job during recession.
• It is a sign of poverty, where an individual is unemployed. It is a loss of human resourses to the nation and
stigma to the society.
• Child labour: Child labour is a situation where a child is employed for earning money. Which is mentally,
physically and socially dangerous and harmful for the childern. Child labour is a basic problem of poverty.
Because of doing work, child can not be lliterate and he/she is unable to make his/her future.
• The Child Labour (Prohibition and Regulation) Act, 1986 defines a child as any person who has not
completed his fourteenth year of age.
• According to International labour Organization (ILO), the term ‘child labour’ is often defined as work
that deprives children of their childhood, their potential and their dignity, and that is harmful to physical and
mental development.
• Illiteracy: Illiteracy is the condition where a person unable to read and write. In India Illiteracy is a major
problem of poverty.
