Class 9 Economics

Poverty As Challenge

Poverty Level Across India

Poverty level shows wide variations in different states of India. Kerala has the least poverty ratio at about 7%, while Bihar tops the chart with 37% of the population living below poverty line.

According to NCAER (National Council of Applied Economic Research) Report of 2009 following facts emerge about income levels in India.

Out of 220 million households in India, 15.6% or about 35 million earn less than Rs. 45,000 per annum. About 80 million households earn between Rs. 45,000 – 90,000 per annum. About 48% of the households earn more than Rs. 90,000 per annum.

Global Poverty Scenario

The percentage of people living below povery line has fallen from 36% in 1990 to 10% in 2015; in the world. The reduction was quite sharp in China, and percentage of poor reduced from 88.3% in 1981 to 14.7% in 2008. The decline in number of poor was also significant in other countries of South Asia (India, Pakistan, Nepal, Sri Lanka, Bangladesh and Bhutan), where it reduced from 34% in 2005 to 16% in 2013.

In Sub Saharan Africa, poverty decreased from 51% in 2005 to 41% in 2015. In Latin America poverty level decreased from 10% in 2005 to 4% in 2015.. Poverty has resurfaced in Russia and some of the former communist countries.

Causes of Poverty

The British policies during the colonial rule were not in favour of the local economy. Traditional handicrafts declined and not much of the modern industries could develop during that period. This is considered to be a major reason for abject poverty in India at the time of independence.

The low growth rate persisted till 1980s. This was coupled with a high growth rate in population and resulted in a higher number of poor.

Green Revolution helped in reviving the agricultural sector but its effect was limited to certain parts of the country; mainly in Punjab, Haryana and Western Uttar Pradesh.

The secondary sector did not generate enough employment opportunties. This forced many rural migrants to go for unskilled works.

Inequality of income is another major reason of poverty in India. In spite of land reform initiatives, a major portion of land is in the hands of a selected few and a large portion of farmers are landless.

There are many socio-cultural factors which also contribute to poverty. An average Indian has to spend huge amount on marriage and other rituals because of socio-cultural pressure. This creates a heavy drain on savings.

Anti-Poverty Measures

The current anti-poverty measures are targetted at two planks, viz. promotion of economic growth and anti-poverty programmes.

Since 1980s, India’s economic growth has been one of the fastest in the world. The growth rate used to be 3.5% in the earlier decades. It increased to 6% during 1980s and 1990s. Higher growth rate has helped in generating employment and increasing income of the people.

Anti Poverty Programmes:

MNREGA (Mahatma Gandhi Rural Employment Guarantee Scheme):

This programme was originally started in 2005 as NREGA. Under this programme, one member of each rural household shall be given 100 days employment in a year. The person should be willing to work for unskilled job. If the government fails to provide employment to a person within fifteen days, he would be getting unemployment allowance in lieu of that. National Food for Work Programme (NFWP) has also been merged with MNREGA.

The results of these programmes have been mixed. However, MNREGA has helped in arresting the tide of migration from rural areas. It has also helped in improving the wages in rural areas.