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Introduction

Absolute And Relative

poverty

Programs for poverty

alleviation

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 Current challenges facing Indian Economy :

Sustainable Economic Development

Human Capital Formation

Infrastructure

Current Chapter Poverty

Employment

Rural development

22 Marks - UNIT
 No society can surely
be flourishing and
happy, of which the
far greater
part of the members
are poor and
miserable

Adam Smith (The Father of Economics)

Facts Causes Effects Solution

Poverty in India-
Poverty is a challenge
As more than
For India one-fifth of the
world’s poor

80%

20%

Live in India alone

Poverty is a challenge for world
also

About 300 million people are

not able to meet their basic
needs
 •country is suffering.

Five Year Plans

Stresses on Upliftment of poor people

Achieving a minimum standard of living for all

But, poverty in India is still

Serious Problem
Poverty
Refers to a state in which an individual in unable to fulfill the even the
basic necessaries of life……

Clothing
Education Housing

Health facilities Food

 Characteristics of Poor People

L Large families

A Absence of Electricity and water

D Deficiency of Health facilities

D Debt Trap

E Exploitation from employers

Role of Hunger, starvation and malnutrition

R
Who are the poor. ??

Basic Question
 Poverty in India has been studied from two points

Urban Areas Rural Areas

Includes Includes
Push cart vendors Landless agricultural laborers'

Street cobblers Tenant cultivators

Beggars Landless laborers

Urban Areas
Possess few assets.
 Reside in kutcha hutments
The urban poor are largely the overflow of the rural poor who had
migrated to urban areas in search of alternative employment and
livelihood.

Rural Areas
Many of the rural people are landless. Even if some of them
possess land, it is only dry or waste land.
Many rural people do not get to have even two meals a day
 How to solve the
problem of poverty

If India is to solve
the problem of
poverty, it has to….. Basic Question

Implement
Identify Find causes of
schemes for
( Who are poor's) poverty
poverty alleviation

Process
 Measures Of
Poverty

Relative Poverty Absolute Poverty

Level of household Household does not

income that is have sufficient
considerably lower income to sustain
than the median even a basic
level of income acceptable standard
within a country of living
 Person or family is
deprived of the basic
needs making their
livelihood difficult

Features of Absolute
Poverty

In India, nearly 21.9

per cent of the total
population is
absolutely poor
(Economic Survey Measured
2014-15). using poverty
line
 Level of household
income that is
considerably lower than
the median level of
income
Features of Relative
Poverty

Exists in every
country, be it USA
or india
Measured using
Lorenz Curve and
Gini Coefficient
( Not In Syllabus)
 Example
Relative poverty

Your Friend Lives

You lives in 2
In A Bungalow
BHK

Absolute Poverty

You Have no
Home
 Difference
Basis Absolute poverty Relative poverty

Meaning Level of household income

Refers to the total
that is considerably lower
number of people living
than the median level of
below the poverty line
income within a country
Indicates
Level of income needed to Economic status of
poverty in
fulfill basic needs others in society
relation to

Remains consistent over Changes over time

Standard time

Eradication Not possible Possible

Found in Developing countries. Developed countries

Absolute Poverty Measurement

In context of India

Absolute poverty is
measured by using
poverty line
 Measurement of Poverty: Pre and Post independent India

In Pre independent India

Dadabhai Naoroji was the

first person to discuss the
concept of Poverty Line. He
used the ‘Jail Cost of
Living’ to calculate the
poverty line

In Post independent India

In 1962, the Planning Commission formed a Study
Group.
In 1979, “Task Force on Projections of Minimum Needs
and Effective Consumption Demand’ was formed.
In 1989 and 2005, ‘Expert Group’ was constituted for the
same purpose
Poverty Line
In India, poverty line is defined as the expenditure required for a daily
calorie intake which usually decides the population of the country as
poor and non-poor

People with income

above poverty line are
called “Non-Poor

Poverty Line , Poverty Line. Poverty Line Poverty Line. Poverty Line. Poverty Line

People having income

below the poverty line are
called “Poor
How poverty line is determined
In India, “Monthly Per Capita Expenditure (MPCE)” method is used
to determine the poverty line.

According to this method, monetary value (per capita expenditure) of

the minimum calorie intake is calculated.

2400 calories per 2100 calories per

person per day person per day in
for rural areas urban areas
 2400 calories per 2100 calories per
person per day person per day in
for rural areas urban areas

Monetary Value of minimum calorie intake

According to the Planning Commission (Tendulkar Methodology), the
minimum Monthly Per capita Consumption Expenditure (MPCE) in
2011 -12 is worked out to be………………

₨ 816 per ₨ 1,000 per

person in rural person in urban
areas areas
Importance of poverty line
Poverty Line Divides the Poor from the Non-poor.

Poverty Line

Absolute Very Middle Upper

Poor Not So The The Very Millionaires Billionaires
Poor Poor Class Middle
Poor Rich Rich
Class

Poor Non- Poor

 Categorizing Poverty

The Chronic Poor,

Transient Poor and
Non-poor

Poverty Line

Always Poor Churning Occasionally Never Poor

Usually Poor
Poor Poor

Chronic Poor Transient Poor Never Poor

Aggregate Category
Criticism of Poverty Line

Very difficult to identify the poor,

who need government help the most.

Does not differentiate between the

very poor and the other poor.

Factors associated with poverty, like

accessibility to basic education, health
care, drinking water have been
ignored

Not consider social factors that are

responsible for poverty, like
illiteracy, ill health, lack of, political
freedoms.
 Causes of poverty

Inflation

Poor state of Agriculture

Population Explosion

High Illiteracy Rate

Inequalities of Income

Role of Hunger, starvation and malnutrition

Main programmes
for poverty
alleviation by the
GOVERNMENT
 Programs for poverty alleviation
The Indian Constitution Five Year Plan

Primary
Objective

Social Justice’

Mixing the poor into them mainstream

Achieving a minimum standard of

living
Up liftment of the poorest of the poor
 Government’s approach to poverty
reduction has three dimensions

Three dimensions

Growth- Poverty Minimum

oriented Alleviation Needs
approach Programmes Programme
 Government’s approach
Three Dimensions

Growth-oriented Poverty Alleviation Minimum Needs

approach Programmes Programme

Initiated Initiated Initiated

First Five Year Third Five Year Fifth Five Year
plan (1950s and Plan (1961-66) Plan.
early 1960s).
Growth-oriented approach Initiated :- First Five Year plan (1950s
and early 1960s).

Problem
Poverty alleviation.

Features & solution

As economic growth (rapid increase in GDP)

• Underdeveloped region and the more backward sections get

benefited
• More employment opportunities are created

• As a result poverty is alleviated

Poverty Alleviation Programmes Initiated :- Third Five Year Plan
(1961-66)

Core issue
Poverty alleviation by income generation.

Means
Incomes and employment for the poor could be raised by means of
work generation
Can be achieve by

Self-employment generation Programmes

Wage employment generation programmes

 Self-employment generation Programmes

Rural Prime Minister’s Swarna Jayanti Swarnjayanti

Employment Rozgar Yojana Shahri Rozgar Gram
Generation (PMRY) Yojana Swarozgar
Programme (SJSRY) Yojana
(REGP) (SGSY)

Initiated Initiated Initiated Initiated

01 April 1995 02 October 1993 01 April 1995 01 April 1995
 Rural Employment Generation Programme (REGP)

Features
 Implemented by the The Khadi & Village Industries Commission
(KVIC)

Develop entrepreneurial skills and aptitude among rural unemployed

youth

Generate more employment opportunities by reducing the migration

from the rural to urban by providing subsidy
 Prime Minister’s Rozgar Yojana (PMRY)

Features
Helps the educated unemployed youth from low income
families in rural and urban areas

Subsidy was provided to set a self-employment venture

that generates employment.

Preference is to be given to the weaker sections, including

women
 Swarna Jayanti Shahri Rozgar Yojana (SJSRY)

Features

Creating employment opportunities for self-employment and those

leaving below the urban poverty line .

Based on Community empowerment like Neighborhood Groups

(NHGs), Neighborhood Committees (NHCs),

Funded by the Centre and the States on a 75:25 basis

 Swarnjayanti Gram Swarozgar Yojana (SGSY)

Features

Was introduced by the Ministry of Rural Development to assist the

poor families living below the poverty line in rural areas.

People, who wish to benefit from this scheme, are encouraged to

form self-help groups (SHG).

The government though banks provides partial financial assistance to

SHG’s.

Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA)

•In august2005, the parliament passed a

new act

•Provide guaranteed wage employment

to every rural household whose adult
volunteer is to do unskilled manual work
for a minimum of 100 days in a year.
• Poor who are ready to work at the
minimum wage can report for work in
areas where this programme is
implemented.

•In 2013-14, nearly five crore

households got employment
opportunities under this law
Minimum Needs Programme
Initiated :- Third Five Year Plan (1961-66)
Core issue
Removing poverty by providing minimum basic amenities to the
people

Solution
Through public expenditure on social consumption needs living
standard could be improved……… like

Clothing Food
Education

Health facilities Housing

 Various Program
Are
Public
Distribution
System,
Midday Meal
Scheme

Pradhan Mantri
Pradhan Gram SadakYojana
mantra jan
Dhan Yojna

Pradhan Mantri
Gramodaya
Integrated Child Yojana,
Development
Scheme
Valmiki Ambedkar
AwasYojana
 Distributing basic food and non-
Public Distribution food commodities to the
System disadvantaged group of the society
at very low prices

Midday Meal School meal designed to better the

Scheme nutritional standing of school-age
children nationwide

Provides food, preschool education,

Integrated Child primary healthcare, health check-up
Development to children under 6 years of age and
Scheme their mothers
 Pradhan Mantri Nationwide plan in India to provide
Gram SadakYojana good all-weather road connectivity
to unconnected villages

Pradhan Mantri Scheme will provide the shelter to

GramodayaYojana the poor people of the rural areas

Providing the housing problems for

Valmiki Ambedkar the Slum Dwellers living Below
AwasYojana Poverty Line indifferent towns and
cities of the State
 Ensure financial inclusion of every
Pradhan mantra jan individual who does not have a bank
Dhan Yojna account in India

Social Assistance Elderly people, Poor women and

Programme widows who do not have anyone to
take care are given pension to
sustain themselves
 Pradhan Mantri Jan-Dhan Yojana

Features
People in India are encouraged to open bank
accounts

Aim

To promote saving
habit

Transfer all benefits of

government schemes to account
holders directly.

Account holder entitled to

Rs.1,00,000 lakh Accident
Insurance and rs.30,000 Life
Insurance Cover
Poverty alleviation
Programmes — a
critical
Assessment
High lights of poverty alleviation programmes

Improvement in terms of per

capita income and average
standard of living

Percentage of absolute poor in

some states is now well below the
national average

Widespread hunger and starvation,

malnutrition shows that not much
success has been achieved
Critical evaluation of poverty alleviation programmes
Three major areas of concern which prevent their successful
implementation

F Faulty Implementation

U Unequal Distribution of assets

L Lack of Resources
Faulty Implementation
Programmes implementations depend mainly on government and bank
officials

Because of corruption the benefits of

many poverty alleviation programmes
went to the non-poor

Participation of local level institutions

like Panchayati Raj institutions and of
the poor people was also missing

Impact

Improper implementation of the programme

Unequal Distribution of assets
None of the poverty alleviation programmes find the root
cause of poverty which is the unequal distribution of assets

There was no political

will to implement land
reforms and they proved
to be a miserable failure.

Impact

Large population not able come out of the

vicious circle of poverty.
Lack of Resources
Lack of infrastructural facilities, such as schools, roads, power,
telecom, IT services, training, etc

Compared to the extent

of poverty, the amount
of funds allocated for
these programmes is not
sufficient

Impact

Hunger, malnourishment, illiteracy

And lack of basic amenities continue