Poverty is a multidimensional phenomenon in which an individual or a group lacks the financial means and necessities for a basic level of living. Poverty also includes poor health and education, a lack of access to safe drinking water and sanitation, a lack of physical security, a lack of voice, and a lack of capacity and chance to improve one's life. According to the Tendulkar Poverty line method, 20.8% of the Indian population was still in poverty in 2020. In this article, we will study about Poverty in India which is important for the UPSC examination.

What is Poverty?

• Poverty is defined as a state or condition in which an individual or a group lacks the financial means and necessities for a basic level of living.
• Poverty is defined as a situation in which one's earnings from work are insufficient to meet fundamental human requirements.
• Poverty, according to the World Bank, is a severe lack of well-being that has various dimensions. Low earnings and the inability to obtain the essential commodities and services required for a dignified existence are examples of poverty.
• The World Bank defined poverty as individuals living on less than $1.90 per day which is called the International poverty line.
• In India, the National poverty threshold is given by the Tendulkar Committee.
• Poverty also includes poor health and education, a lack of access to safe drinking water and sanitation, a lack of physical security, a lack of voice, and a lack of capacity and chance to improve one's life.
• In 2011, 21.9 percent of India's population was living below the national poverty threshold.
• In 2018, about 8% of the world's workers and their families were living on less than $1.90 per day (international poverty line).

Types of Poverty

Poverty can be divided into two categories:

• Absolute Poverty: When a household's income falls below the level required to sustain basic living standards (food, shelter, housing). This condition allows comparisons between countries as well as throughout time.
  • The "dollar a day" poverty line, first proposed in 1990, quantified absolute poverty according to the criteria of the world's poorest countries. The World Bank raised it to $1.90 per day in October 2015.
• Relative Poverty: It is defined from a social perspective as a living standard that is lower than the economic standards of the surrounding population. As a result, it is a measure of income disparity.
  • In most cases, relative poverty is defined as the percentage of the population earning less than a certain percentage of median income.

What is a Poverty Line?

• Poverty levels are defined as a level of income or spending below which it is reasonable to conclude that someone is poorer than the rest of society.
• It is a measure of income or consumption spending that distinguishes the poor from the rest of the population.
• The Tendulkar Committee proposed a poverty level of Rs 29 per person per day in urban areas and Rs 22 per person per day in rural areas.
• There are two reasons for choosing a poverty line.
  • To create policies that are tailored to the needs of the poor.
  • To determine if government programmes have been successful or unsuccessful over time.

Poverty Estimation in India

• Poverty estimation in India is done by the NITI Aayog task force using data from the National Sample Survey Office under the Ministry of Statistics and Programme Implementation to calculate a poverty line (MOSPI).
• In India, poverty lines are calculated primarily on consumption expenditure rather than income levels.
• Consumer expenditure surveys conducted by the National Sample Survey Organization are used to determine poverty. A poor household is defined as one that spends less than a certain amount each month.
• The poverty ratio, which is the ratio of the number of poor to the total population stated as a percentage, is used to determine the prevalence of poverty. It's also referred to as the head-count ratio.
• The Alagh Committee (1979) established a poverty level based on an adult's daily calorie requirement of 2400 and 2100 calories, respectively, in rural and urban areas.
• Following that, the poverty estimation was done by other committees, including the Lakdawala Committee (1993), Tendulkar Committee (2009), and Rangarajan Committee (2012).
• According to the Rangarajan committee report (2014), the poverty line is set at Rs. 1407 per capita in urban areas and Rs. 972 in rural regions (monthly consumption).

Causes of Poverty in India

• Population Explosion: India's population has been continuously increasing throughout the years. It has risen at a pace of 2.2 percent per year for the past 45 years, implying that around 17 million people are added to the country's population each year. This has a significant impact on the demand for consumer products.
• Low Agricultural Productivity: The agriculture sector's low productivity is a key source of poverty. Low productivity can be caused by a variety of factors. It is primarily due to fragmented and subdivided landholdings, a lack of cash, illiteracy about modern farming technologies, the use of conventional farming practices, wastage during storage, and other factors.
• Inefficient Resource Utilization: The country suffers from underemployment and hidden unemployment, notably in the agricultural sector. Low agricultural output and a drop in living standards have resulted as a result of this.
• Economic Progress at a Slow Pace: India's economic development has been slow, particularly in the first 40 years of independence before the LPG reforms in 1991.
• Price Increases: The country's price increases have been consistent, adding to the burden carried by the poor. Although a few people have profited, the lower-income groups have suffered as a result, and are unable to meet even their most basic needs.
• Unemployment: Unemployment is another element that contributes to poverty in India. As the world's population grows, so does the number of people looking for work. However, the expansion of opportunities is insufficient to meet the demand for jobs.
• Lack of Capital and Entrepreneurship: In the absence of capital and entrepreneurship, the economy suffers from a lack of investment and employment creation.
• Social Issues: In addition to economic factors, social factors obstruct India's poverty eradication efforts. The laws of inheritance, the caste system, and certain customs, to name a few, are all obstacles in this regard.
• Colonial Exploitation: For nearly two centuries, the British colonisation and authority over India de-industrialized the country by destroying its traditional handicrafts and textile industries. Colonial policies reduced India to a simple source of raw materials for European businesses.
• Climate Factors: Bihar, UP, MP, Chhattisgarh, Odisha, Jharkhand, and other states in India account for the majority of the impoverished. Natural catastrophes like floods, disasters, earthquakes, and cyclones frequently strike these states, wreaking havoc on agriculture.
• Poverty Trap:

Poverty Alleviation Programs in India

• Integrated Rural Development Program: The Integrated Rural Development Program (IRDP) was established in 1978-79 and became universal on October 2, 1980, with the goal of giving support to the rural poor in the form of subsidies and bank loans for productive employment possibilities across consecutive plan periods.
• Jawahar Rozgar Yojana/Jawahar Gram Samridhi Yojana: The JRY was created with the goal of creating real employment possibilities for the unemployed and underemployed in rural regions by building economic infrastructure and community and social assets.
• Rural Housing – Indira Awaas Yojana: The Indira Awaas Yojana (LAY) initiative intends to provide free housing to BPL families in rural regions, with SC/ST households being the primary objective.
• Food for Work Program: The Food for Work Program aims to improve food security by providing pay jobs. Foodgrains are provided free of charge to states, however, deliveries from the Food Corporation of India (FCI) godowns have been delayed.
• NOAPS (National Old Age Pension Scheme): The central government provides this pension. Panchayats and municipalities are in charge of implementing the scheme in states and union territories. Depending on the state, the contribution may differ. For applicants aged 60–79, the old-age pension is worth $200 per month. According to the 2011–2012 Budget, the sum for applicants over the age of 80 has been increased to $500 per month. It's a profitable business.
• Annapurna Scheme: The Annapurna Scheme was established by the government in 1999–2000 to offer food to older adults who are unable to care for themselves, are not covered by the National Old Age Pension Scheme (NOAPS), and have no one in their community to look after them. This programwould supply qualified senior folks with 10 kg of free food grains per month. They primarily target 'poorest of the poor’ and 'indigent senior seniors' groups.
• Sampoorna Gramin Rozgar Yojana (SGRY): The scheme's core goals are the creation of wage jobs, the development of long-term economic infrastructure in rural regions, and the supply of food and nutrition security to the poor.
• MGNREGA (Mahatma Gandhi National Rural Employment Guarantee Act): Every rural household receives 100 days of guaranteed employment each year as a result of the Act. Women would be eligible for one-third of the proposed jobs. National Employment Guarantee Funds will also be established by the federal government. State governments will also establish State Employment Guarantee Funds to carry out the scheme. If an applicant is not hired within 15 days, he or she will be eligible for a daily unemployment allowance under the programme.
• Aajeevika (2011): National Rural Livelihood Mission: It evolved from the necessity to diversify the demands of the rural poor by providing them with occupations that pay a monthly salary. To assist the poor, self-help groups are organised at the village level.
• National Urban Livelihood Mission: The National Urban Livelihood Mission (NULM) focuses on forming Self Help Groups among the urban poor, providing opportunities for skill development that leads to market-based employment, and assisting them in establishing self-employment companies by providing easy access to loans.
• Pradhan Mantri Kaushal Vikas Yojana: It will concentrate on newcomers to the labour market, particularly class X and XII dropouts.
• Pradhan Mantri JanDhan Yojana: It planned to distribute subsidy, pension, and insurance benefits directly to beneficiaries, and it met its goal of opening 1.5 million bank accounts. The scheme is aimed mostly at the unbanked poor.

Conclusion

• According to the UN's Global Multidimensional Poverty Index-2018, 271 million people in India rose out of poverty between 2005-06 and 2015-16. Over a ten-year period, the country's poverty rate has nearly halved, falling from 55 percent to 28 percent. In India, a large portion of the population still lives in poverty.
• Rapid economic growth and the application of technology to social sector activities have made a major dent in the country's terrible poverty.
• Despite our rapid growth and development, an unacceptable part of our population continues to be deprived on multiple levels. To alleviate poverty in India, a more comprehensive and inclusive approach is required.

FAQs

Question: What is poverty?

Question: What is the poverty line in India?

Question: What are the major causes of poverty in India?

Question: How is poverty measured in India?

Question: What government programs are aimed at poverty alleviation in India?

MCQs

1. What is the main criterion used to define the poverty line in India?

a) Income level

b) Calorie intake and consumption expenditure

c) Employment status

d) Ownership of assets

2. Which of the following programs aims at providing guaranteed employment in rural areas to alleviate poverty?

a) Pradhan Mantri Awas Yojana

b) Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA)

c) Ayushman Bharat

d) Make in India

3. Which of the following terms refers to the percentage of people living below the poverty line?

a) Poverty Gap Index

b) Human Development Index

c) Head Count Ratio

d) Gini Coefficient

4. Absolute poverty is best defined as:

a) Deprivation of luxury goods

b) A condition where basic needs for survival are not met

c) Inequality in income distribution

d) Poverty relative to the society one lives in

5. Which of the following is NOT a direct government measure to reduce poverty in India?

a) National Food Security Act

b) Goods and Services Tax (GST)

c) Prime Minister Jan Dhan Yojana (PMJDY)

d) Pradhan Mantri Awas Yojana (PMAY)

GS Mains Questions and Model Answers

Q1: Examine the role of social security programs in reducing poverty in India.

Explanation: This question requires an analysis of the effectiveness of social security programs in reducing poverty. The answer should discuss schemes such as MGNREGA, Pradhan Mantri Jan Dhan Yojana (PMJDY), and National Food Security Act (NFSA), focusing on how they provide financial support, food security, and employment opportunities. It should also assess challenges in implementation, such as corruption, inefficiency, and the need for better targeting to ensure these programs reach the most vulnerable sections of society.

Q2: “Income inequality is a major challenge in poverty reduction in India.” Critically examine this statement.

Explanation: This question requires a critical analysis of how income inequality poses challenges to poverty reduction in India. The answer should explore how the concentration of wealth among the rich exacerbates poverty and prevents the benefits of economic growth from reaching the poor. It should also discuss the impact of inequality on social mobility, access to education, healthcare, and employment, as well as the role of redistributive policies like progressive taxation and welfare programs in addressing this issue.

Q3: Evaluate the impact of Direct Benefit Transfer (DBT) schemes in reducing leakages in poverty alleviation programs in India.

Explanation: This question requires an evaluation of how Direct Benefit Transfer (DBT) schemes have improved the delivery of welfare benefits and reduced corruption in poverty alleviation programs. The answer should explain the mechanism of DBT, which transfers subsidies and benefits directly to beneficiaries’ bank accounts, thus eliminating middlemen and reducing leakages. It should also discuss the challenges in implementation, such as the need for financial inclusion, robust banking infrastructure, and addressing issues related to Aadhaar-linked payments.

PYQs on Poverty in India

1. UPSC CSE 2019

Q1: Discuss the effectiveness of the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) in addressing poverty in rural India. 

Answer: MGNREGA is one of the most significant rural poverty alleviation schemes in India. It guarantees 100 days of wage employment to rural households, aiming to reduce poverty by providing livelihood security. The program has helped in raising rural incomes, improving infrastructure, and reducing rural-to-urban migration. However, challenges such as delayed payments, lack of timely job creation, and corruption in fund allocation have affected its efficacy. Overall, while MGNREGA has made a substantial impact on poverty reduction in rural areas, improving its implementation can lead to better results.

2. UPSC CSE 2020

Q2: Explain the key reasons for the persistence of poverty in India despite economic growth.

Answer: Despite significant economic growth, poverty persists in India due to several factors. First, income inequality has widened, with the benefits of growth concentrated among the wealthy. Second, unemployment and underemployment remain high, particularly in rural areas where agriculture is still a major source of income. Third, social infrastructure, such as healthcare, education, and sanitation, remains inadequate for large sections of the population, preventing upward mobility. Lastly, corruption and inefficiencies in the implementation of poverty alleviation programs have hindered their effectiveness. As a result, poverty remains a challenge despite overall economic progress.