essay on poverty in indian economy

Poverty in India Essay for Students and Children

500+ words essay on poverty in india.

Poverty refers to a situation in which a person remain underprivileged from the basic necessities of life. In addition, the person does not have an inadequate supply of food, shelter, and clothes. In India, most of the people who are suffering from poverty cannot afford to pay for a single meal a day. Also, they sleep on the roadside; wear dirty old clothes. In addition, they do not get proper healthy and nutritious food, neither medicine nor any other necessary thing.

Causes of Poverty

The rate of poverty in India is increasing because of the increase in the urban population. The rural people are migrating to cities to find better employment. Most of these people find an underpaid job or an activity that pays only for their food. Most importantly, around crores of urban people are below the poverty line and many of the people are on the borderline of poverty.

Besides, a huge number of people live in low-lying areas or slums. These people are mostly illiterate and in spite of efforts their condition remains the same and there is no satisfactory result.

Furthermore, there are many reasons that we can say are the major cause of poverty in India. These causes include corruption, growing population, poor agriculture , the wide gap of rich and poor, old customs, illiteracy, unemployment and few more. A large section of people are engaged in an agricultural activity but the activity pays very less in comparison to the work done by employees.

Also, more population needs more food, houses and money and in the lack of these facilities the poverty grows very quickly. In addition, being extra poor and extra rich also widens the gap between the rich and poor.

Moreover, the rich are growing richer and the poor are getting poorer creating an economic gap that is difficult to fill up.

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Effects of Poverty

It affects people living in a lot of ways. Also, it has various effects that include illiteracy, reduced nutrition and diet, poor housing, child labor, unemployment , poor hygiene and lifestyle, and feminization of poverty, etc. Besides, this poor people cannot afford a healthy and balanced diet, nice clothes, proper education , a stable and clean house, etc. because all these facilities require money and they don’t even have money to feed two meals a day then how can they afford to pay for these facilities.

The Solutions for Ending Poverty

For solving the problem of poverty it is necessary for us to act quickly and correctly. Some of the ways of solving these problems are to provide proper facilities to farmers . So, that they can make agriculture profitable and do not migrate to cities in search of employment.

Also, illiterate people should be given the required training so that they can live a better life. To check the rising population, family planning should be followed. Besides, measures should be taken to end corruption, so that we can deal with the gap between rich and poor.

In conclusion, poverty is not the problem of a person but of the whole nation. Also, it should be deal with on an urgent basis by the implementation of effective measures. In addition, eradication of poverty has become necessary for the sustainable and inclusive growth of people, society, country, and economy .

FAQs about Poverty in India Essay

Q.1 List some ways to end poverty in India. A.1 Some ways to end poverty in India are:

• Develop a national poverty reduction plan
• Equal access to healthcare and education
• Sanitation facility
• Food, water, shelter, and clothing facility
• Enhance economic growth with targeted action

Q.2 Which is the poorest state in India? A.2 Chhattisgarh is the poorest state of the country.

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India eliminates extreme poverty

Subscribe to the sustainable development bulletin, surjit s. bhalla and surjit s. bhalla former executive director for india, bangladesh, sri lanka and bhutan - international monetary fund @surjitbhalla karan bhasin karan bhasin graduate assistant - university at albany, suny @karanbhasin95.

March 1, 2024

• Data now confirms that India has eliminated extreme poverty.
• India should now graduate to a higher poverty line, which would provide an opportunity to redefine existing social protection programs in order to give greater support to the genuine poor.

India has just released its official consumption expenditure data for 2022-23, providing the first official survey-based poverty estimates for India in over ten years. The previous official survey was conducted from 2011-12, and the absence of up-to-date data for India has added considerable uncertainty to global poverty headcount ratios.

Before presenting the results, a quick methodological note is in order. India has two different methods for estimating consumption expenditures: the Uniform Recall Period (URP) and the more accurate Modified Mixed Recall Period (MMRP). The URP method asks households questions on their consumption expenditures over a uniform recall period of 30 days. The MMRP asks household consumer expenditure on perishables (for example, fruits, vegetables, eggs) for the last 7 days, durable goods for the last 365 days, and expenditure on all other items for the last 30 days. India officially shifted to the MMRP, the standard in other countries, beginning with the 2022-23 survey, though it previously experimented with both methods.

Comparable poverty estimates for India are available for the period 1977-78 to 2011-12 using the URP method and from 2011-12 to 2022-23 using the MMRP method for the purchasing power parity (PPP)$ 1.9 (international extreme poverty) and PPP$ 3.2 poverty lines (recommended line by the World Bank for lower middle-income countries such as India).

What do the data show?

Growth : Real per capita consumption growth of 2.9% per annum (pa) since 2011-12; rural growth at 3.1% pa was significantly higher than urban growth of 2.6%.

Inequality : An unprecedented decline in both urban and rural inequality. The urban Gini (x100) declined from 36.7 to 31.9; the rural Gini declined from 28.7 to 27.0. In the annals of inequality analysis, this decline is unheard of, and especially in the context of high per capita growth. We offer some explanations below on why this may have happened, but more work will be required to fully explore the issue.

Poverty : High growth and large decline in inequality have combined to eliminate poverty in India for the PPP$ 1.9 poverty line. (Here we use the PPP$ 1.9 line [2011 prices] rather than the PPP$ 2.15 line at 2017 prices because the former closely corresponds to the official India Tendulkar poverty line.) The Headcount Poverty Ratio (HCR) for the 2011 PPP$ 1.9 poverty line has declined from 12.2 per cent in 2011-12 to 2 per cent in 2022-23, equivalent to 0.93 percentage points (ppt) per year. Rural poverty stood at 2.5% while urban poverty was down to 1%. For the PPP$ 3.2 line, HCR declined from 53.6% to 20.8% (almost 3 ppt per year). Note that these estimates do not take into account the free food (wheat and rice) supplied by the government to approximately two-thirds of the population, nor utilization of public health and education.

The data show a strikingly lower number of poor people in India, at both thresholds, than those estimated by the World Bank. That institution relied on the Consumer Pyramids Household Survey, a privately provided data source, to derive poverty numbers of 10% (at $1.90) and 45% (at $3.20) in 2020, despite well-known problems with that data explained by Bhalla, Bhasin and Virmani (2022) .

Time for a higher poverty line

In the chart below, we show India’s HCR for both the 1.9$PPP and the 3.2$PPP from 1977-78. The change in slope of the HCR for the higher 3.2$ poverty line reveals the extent of inclusive growth experienced in India over the last decade.

Poverty HCR (2011 PPP 1.9$)

Poverty hcr (2011 ppp 3.2$).

Given the near elimination of extreme poverty, we outlined the need for India to transition to a higher poverty line in an earlier article . The decline in HCR for both the poverty lines illustrates this point, as we can see not much decline can occur at the lower poverty line. Incidentally, the decline in HCR at the higher poverty line is remarkable given that in the past it took 30 years for India to witness a similar decline in poverty levels as now witnessed over 11 years.

How and why the results

The relatively higher consumption growth in rural areas should not come as a surprise given the strong policy thrust on redistribution through a wide variety of publicly funded programs. These include a national mission for construction of toilets and attempts to ensure universal access to electricity, modern cooking fuel, and more recently, piped water. As an example, rural access to piped water in India as of 15 th August 2019 was 16.8%  and at present it is 74.7%. The reduced sickness from accessing safe water may have helped families earn more income. Similarly, under the Aspirational District Program , 112 districts of the country were identified as having the lowest development indicators. These districts were targeted by government policies with an explicit focus on improving their performance in development.

Key takeaways

Official data now confirms that India has eliminated extreme poverty, as commonly defined in international comparisons. This is an encouraging development with positive implications for global poverty headcount rates. This also means that time has come for India to graduate to a higher poverty line much like other countries. The transition to a higher poverty line provides an opportunity to redefine existing social protection programs particularly with the objective of better identification of intended beneficiaries and providing greater support to the genuine poor.

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Escaping and Falling into Poverty in India Today

Amit thorat.

Jawaharlal Nehru University

Reeve Vanneman

University of Maryland, U.S.A

Sonalde Desai

Amaresh dubey.

The study examines the dynamic nature of movements into and out of poverty over a period when poverty has fallen substantially in India. The analysis identifies people who escaped poverty and those who fell into it over the period 2005 to 2012. The analysis identifies people who escaped poverty and those who fell into it over the period 2005 to 2012. Using panel data from the India Human Development Survey for 2005 and 2012, we find that the risks of marginalized communities such as Dalits and Adivasis of falling into or remaining in poverty were higher than those for more privileged groups. Some, but not all of these higher risks are explained by educational, financial, and social disadvantages of these groups in 2005. Results from a logistic regression show that some factors that help people escape poverty differ from those that push people into it and that the strength of their effects varies.

Introduction

The Indian economy has grown by leaps and bounds over the last two decades of its liberalized journey. The world economic crisis notwithstanding, both rural and urban poverty fell substantially over this time period although some debate remains over the magnitude of this fall. Official estimates show a decline from a high of 37% in 1993–94 to 22% in 2011–12, a decline of 15 percentage points 1 .

Though everyone agrees poverty rates have fallen over time, we are less certain about who are the people who have risen out of poverty most rapidly and what advantages they enjoyed that might have helped explain their upward mobility. Moreover, despite the overall decline in net poverty rates, many others have newly fallen into poverty but have been almost forgotten in academic and policy discourse ( Krishna 2010 ).

Poverty analysis in India has largely depended upon cross sectional data, relying on the ‘thick’ quinquennial and the ‘thin’ annual consumption expenditure surveys by the NSSO. Though highly useful for a continuous monitoring of national progress, these cross-sectional surveys do not allow for examining the dynamics of household outcomes. The lack of national panel data has prevented us from asking what household characteristics increase the odds of exiting or entering poverty? How does occupational diversification affect the risks of poverty? Are historical caste disadvantages reproduced in recent poverty dynamics? The completion of the second wave of the India Human Development Survey () presents a unique opportunity to observe the movements into and out of poverty by Indian households across the country during a rapidly changing economy. We find that traditional caste and religious differences remain a major impediment for escaping poverty and an equally strong risk for falling into poverty. In contrast, educational attainment and a salaried position offer protection against the danger of falling into poverty but somewhat less help in escaping once there. Urban location offers similar protections against falling into poverty but almost no advantage in escaping poverty after holding constant the educational and occupational advantages typical of urban households.

Background and motivation

Contemporary poverty in India has always been underpinned by the age-old divisions of caste and religious differences. Patterns of poverty and underdevelopment show consistent intergroup differences over time, even during phases of growth and development. India’s class differentials have historically mirrored the traditional caste differentials. Brahmins and other forward castes have been the traditional decision makers through their ownership of land and capital, while Dalits (Scheduled Castes) have more often worked as landless labourers. Indigenous tribal groups ( Adivasis ), often set apart geographically and socially from the rest of India, have typically been the poorest of the poor.

Despite aggressive affirmative action policies by the Government of India and despite substantial improvements in incomes among all Indians, poverty continues to be concentrated among these most traditionally disadvantaged groups. A recent report based on the 2004–2005 India Human Development Survey ( Desai et al. 2010 ) found that while Forward Caste Hindus experienced a 12% poverty rate, Dalit poverty was more than two and half times as high (32%) and a crippling 50% of Adivasis were poor. Intermediate castes (OBCs – Other Backward Classes) had, not surprisingly, intermediate levels of poverty (23%). Comparable estimates of poverty ( Thorat & Dubey, 2012 ) based on data from National Sample Survey also show similar inter group differences. While the head count ratio (HCR) for the Dalits and Adivasis were as high as 32% and 30%, they are only 17% for the Forward caste Hindus.

Religious differences in poverty are more complex owing to different levels of urbanization, education, and non-agricultural employment. Nevertheless, 31% of minority Muslims were poor, a rate not much different from Dalits (IHDS, 2005). Other minority religious groups, Jains, Sikhs, and to a lesser extent Christians, have been relatively prosperous; together their 2005 poverty rate was only 12%, about the same as Forward Caste Hindus.

Panel literature and analysis

Poverty analyses in India have depended largely on the cross sectional National Sample Surveys (NSS) consumption expenditure data collected every five years 2 by the Ministry of Statistics and Programme Implementation. Panel data analysis has been less common; what has been available has used mostly selected rural samples from NCAER ( Mehta and Bhide 2003 ) and from ICRISAT, the International Crops Research Institute for the Semi-Arid Tropics ( Singh and Binswanger 1993 ; Gaiha and Imai 2004 ). The last available year from ICRISAT is 2008 and from NCAER, 1998–99. Lacking sufficient panel data, others ( Krishna 2010 , Hattlebakk 2014 ) have developed retrospective methods for inquiring about transitions into and out of poverty.

Social Background

These earlier panel analyses of rural poverty persistence confirmed that the most disadvantaged groups also realized the lowest rates of escape from poverty. The evidence is clearest for Adivasis, while Dalits and especially OBCs occasionally show escape rates more similar to forward castes. For example, Mehta and Bhide (2003) studying 3139 rural households found that while 63% of “Upper Caste” households who were poor in 1970–71 were no longer poor a decade later, only 37% of Dalits and, even fewer, 30%, of Adivasis had managed to escape poverty during that time. Escape rates for OBC households, 43%, fell between these two extremes. Dhamija and Bhide (2013) extended the analysis of the same NCAER data to 1998–99 and also found that both Dalits and Adivasis were less likely to escape poverty, although the coefficient estimating the log odds of escape for Adivasis, −1.18, was over twice that for Dalits, −0.56 (2013: 692).

Krishna (2003) using retrospective accounts for 6,376 Rajasthan households found that while 45% of previously poor Upper Caste households had escaped poverty a generation later, 42% of poor OBC households, 33% of Dalit households, and only 31% of Adivasi households had been able to escape. Using similar methods with 2245 Gujarat households, Krishna et al (2005) found escape rates of 22% for “General” Hindu households, 18%, for Dalits, and 15% for Adivasis. More surprisingly, the lowest rates of escape in Gujarat were found among poor OBC households, only 12% of whom escaped poverty. Hattlebakk (2014) using a similar retrospective method with 754 households in two Orissa districts found similar rates of escape for poor OBCs (50%) and Dalits (58%) but much lower for poor Adivasis (17%). Unfortunately, the sample size of poor forward castes was too small to estimate escape rates.

The analyses most similar to what we report here were calculated by Krishna and Shariff (2011) using income, not expenditure data, from a national panel of 13,593 rural households interviewed in 1993–94 and 2004–05. They found the familiar hierarchy of escapes associated with higher caste status: Dalits and Adivasis (46%), OBCs (53%), and forward castes (60%). Interestingly, in a multivariate state fixed effects regression controlling for other household characteristics, these caste differences proved to be not statistically significant. Their results do not indicate so much a lack of caste differences in escaping poverty but rather that a reasonably comprehensive set of intervening variables can explain much of why caste status is related to escapes from poverty.

There has been less research attention to caste differences in falling into poverty, despite widespread acknowledgement that poverty rates are a product of both escapes and descents. Bhide and Methta (2008) using the NCAER data found evidence for higher rates for Adivasis falling into severe poverty and for Dalits falling into moderate poverty. Dhamija and Bhide (2013) , analyzing the same data in a multivariate model, found only non-significant caste differences after controlling for other household and area characteristics. The retrospective methods in smaller state-specific samples generally find higher descent rates for disadvantaged castes than for forward castes although the differences among the disadvantaged castes varies from one location to another. Krishna and Shariff’s all-India data found large caste differences for falling into poverty with 43% of non-poor Adivasis and Dalits falling into poverty a decade later, 36% of OBCs and 23% of forward castes.

Religious differences have usually been smaller. Mehta and Bhide (2003) found 48% of poor Hindus had escaped poverty compared to 40% of poor Muslims. Krishna and Shariff found only 45% of Muslims escaped poverty between 1994 and 2005, comparable to the low rates for Dalits and Adivasis (46%). And 39% of nonpoor Muslims fell into poverty during this period, only slightly less than for Dalits and Adivasis (43%) and well below the higher caste risk (23%).

Economic and Educational Background

A review of the existing panel data literature on India as well as other countries suggests that in rural areas, households that escaped poverty over time, were those that managed to increase their land holding or to use existing land more intensively either by increasing irrigation or crop diversification, found off-farm work, increased skill or education, acquired more assets, or reduced family size. At the same time those households that fell into poverty were the ones that lost land or operational area, experienced cropping shocks, increased family size, did not accumulate wealth, did not reduce liabilities, had members who fell ill, suffered a natural calamity, belonged to lower caste, were landless, mostly less educated and could not easily change occupation ( Adelman, Subbarao and Vashishtha, 1985 ; Baulch and McCulloch 2002 ; Gaiha 1989 ).

The panel studies reviewed above, while suggestive, have various limitations: all are rural, several are based on small or local samples, and poverty definitions vary widely from one study to another and rarely conform to the standard NSS definition. This study will use a nationally representative panel data of 38,853 households for India, the India Human Development Survey ( Desai et al., 2010 ), fielded in two waves, 2004–05 and 2011–12. This is the only nationally representative panel that has collected data on household incomes and consumption expenditures, and also includes data on many other socio-economic indicators that might protect households from poverty.

We concentrate on the prior characteristics of households that would predispose them to escape from or descend into poverty, particularly the socio-religious profile of these households. We also try to identify the economic and social resources households have to resist poverty: the household’s main source of income, level of education, land ownership, social and financial capital, and household composition. For caste and religion, we first report reduced form differences in exits and entrances and then use lagged logistic regressions to investigate the conditional effects of household characteristics in exposing households to risks of falling into poverty or chances of escaping it. We are also interested in understanding how much of the caste and community disadvantages are explained by these household characteristics.

When considering poverty transitions, we need to take account not only of the levels of income and its determinants, but also the steadiness of that income. Steadiness and high levels are easily conflated because they often (but not always) co-occur. Salaried positions in India usually pay better than wage labour, but their advantage in poverty transitions stems also from the greater steadiness of that income as compared to hourly wages. Households with steady incomes avoid the poverty transitions that come from more volatile income sources. Cross-sectional analyses of poverty that miss the churning of exits from and entrances into poverty also miss the importance of steady incomes for protecting households from poverty.

Household characteristics that are relatively enduring properties should be especially important in protecting against falling into poverty: capital of all types – financial, physical, human, and social – can buffer a household against the risks of falling into poverty during bad years. Agricultural capital might seem to be an exception to that benefit because of the inherent volatility of agricultural production due to weather and climatic conditions. But even in agriculture, landowners are better protected from falling into poverty than are agricultural labourers who are the first to suffer from failed crops. Perhaps, more importantly, irrigation can buffer the consequences of rainfall failures and protect cultivators from falling into poverty.

Bank accounts can also provide protection against the volatility of Indian incomes; they not only can hold savings to smooth consumption spending, they can provide better access to credit. Access to banking continues to expand in India, but at the time of the first IHDS survey only a third of Indian households had an account, making this a potentially important difference for families avoiding falling into poverty. And while access to future borrowing may provide a means for households to maintain their living standards, current debt may also create a risk for falling further behind. The retrospective studies described above frequently identify debts as a common path into household poverty.

Human capital, because it remains with a worker through good times and bad, can act also as insurance against descents into poverty just as physical capital can. A college degree or a secondary school diploma remains a credential workers take with them from position to position.

Finally, social capital, like financial and human capital, can be a household resource that may help protect households from falling into poverty during bad times or help efforts to rise out of poverty after setbacks. Memberships in formal organizations, especially micro-credit societies, can provide specifically economic assistance for upward mobility; and more general informal contacts with local influentials can provide the social safety nets that protect against sudden descents or that extend a hand up when trying to recover from a setback.

Of course, the steadiness of income, the buffer of a stock of capital, or the credential that protects employment is not as much assistance if that income hasn’t been sufficient to prevent poverty in the first place. A steady but poverty level income is poor consolation. For this reason, we expect these predictors of steady income to be more important as protection against falling into poverty than assistance in escaping poverty.

Data Source

IHDS began as a multi-topic panel study of 41,554 households from 33 states and union territories across 1503 villages and 971 urban neighbourhoods. The survey was designed to be nationally representative at its inception. In 2011–12, all of the 2004–5 households as well as any households separating from the root household but residing in the same area were selected for re-interviews.

Comparison of IHDS data with other reputable data sources such as the Census, National Sample Surveys (NSS) and National Family Health Survey (NFHS) shows that the IHDS compares well with these sources on common items ( Desai et al. 2010 ). For example, the NSS estimates poverty rate to be 37 per cent in 2004–5 and 22 percent in 2011–12; IHDS estimates are similar at 38 percent in 2004–5 and 21 percent in 2011–12.

IHDS2 reinterviewed 83 percent of the original IHDS1 households that housed 85 percent of the Indian population -- 92 per cent of households in rural areas and 76 per cent in urban areas. Attrition was lower among larger, rural households, especially those who owned agricultural land. Attrition was also slightly higher for the non-poor, 13 percent, than for the poor, 9 percent. These differences raise the question of a possible selection bias in our results since we can analyse poverty transitions only for households interviewed in both surveys. Appendix Table 2 presents results from a probit analysis of attrition from which we calculated the inverse Mills’ ratio included in all the analyses of poverty transitions.

Appendix Table A2

Probit analysis of attrition between survey waves.

The IHDS panel collected data on household consumption expenditures using an abridged schedule, similar to the one used by the NSS for their Employment Survey. We convert reported consumption of 47 different items (slightly revised to 52 items in 2012) to monthly per capita consumption expenditures. Head count poverty ratios have been calculated using per capita household consumption and the official poverty line (Tendulkar Committee poverty lines 3 ).

These poverty line have been used by the Planning Commission, Government of India for estimating poverty ratios. (2009, see also Himanshu 2010 ). While the Planning Commission acknowledged the multi-dimensionality of poverty, it maintained the historical reliance on survey consumption data but revised the Rupee cutoff values away from a calorie criterion towards a broader basket of food, health, and education expenditures.

Our analysis compares the poverty status of a household in 2012 (round two) to its status in 2005 (round one). For poor households in round one, we investigate whether they escaped poverty or remained poor; for non-poor households, we investigate whether they fell into poverty or remained non-poor. Thus our dependent variable is the poor or non-poor statuses of a household in round two given that the household was non-poor or poor in round one. For new household splits in round two, we trace back their poverty status to the origin household in round one.

We investigate round one household characteristics, focusing especially on caste and religion. In the multivariate models, we add highest adult education in the household, main source of income, land owned, irrigated land or not, household composition, social networks, and state dummies (see means in Appendix Table 1 ).

Descriptive Statistics

Source: Authors’ calculations from the Indian Human Development Survey.

Note: Observations have been weighted according to weights in the file to reflect the 2011 Indian population.

• Caste – We divide all households into four groups, Adivasis (Scheduled Tribes), Dalits (Scheduled Castes), OBCs (Other Backward Classes) and Forward Castes (all others). We use this fourfold classification for both Hindu and non-Hindu households because in other analyses not reported here we find that the differences between self-reported caste groups among Muslims, Sikhs, Christians, and others largely parallel those among Hindus.
• Religion– We include four groups: Hindus, Muslims, Sikhs and Christians, and all others which includes Buddhists, Jains, Zoroastrians, Tribals, others, and none (not reporting any religious affiliations)
• Highest Educated Adult – This variable gives the highest level of education attained by any adult aged 21 or over in the household; for the few households with no adult, we used the education of the person designated as the household head. We divide years of educational attainment into six groups.
• Main Income Source – IHDS collected detailed income data from over 50 possible sources. We group these into eight major sources (farm, agricultural wage labour, non-agricultural labour, regular salaried, self employment, family business, property or pension income, remittances, and government benefits) and classify the household according to the source of the largest income share.
• Land Class – We first divide households into those who do and do not own agricultural land, and then for those with land, we calculate the logarithm of hectares owned. In order to avoid missing values, non-landed households are assigned a low value on landsize (0.1 hectares), thus constraining the landed/landless dummy coefficient to compare nonlandowners with very small landowners and reserving the analysis of land size only to households with some land. We also included a dummy variable for whether any of the household’s land was irrigated.
• Bank account – An “eligible woman” in the household, an ever-married woman 15–49, was asked whether the household had a bank account and whether her name was on the account. Approximately 1 in 6 households did not include an eligible woman so the survey has no information on whether the household had a bank account or not. This information is important enough that we tested the role of bank accounts for these eligible woman households, substituting the mean (0.36) for missing data and adding a dummy variable to identify the households with missing data. 4
• Member of credit/savings group – IHDS asked whether a household was a member of any of nine different types of organizations; we focus on membership in a “credit/savings group”.
• Debts – Households were asked to report how much they currently owed others, from which we calculated a simple dichotomy of any debt versus no debt.
• Social Networks – This variable captures whether a household is acquainted with a government official, a teacher or school staff, or a medical official.
• Household structure – Household size is the total number of persons in the household and the dependency ratio is the number of non-working household members per working members of the household.
• We also included 21 state dummies to control for the wide range of regional differences in levels of and changes in poverty. We collapse several smaller states with small survey samples into regional groups, narrowing the number of states from 31 to 22.

We begin by reporting simple cross-tabulations of poverty rates, exits, and entrances by caste, religion, and other background variables. We compare groups using simple percentage differences, but as will be quickly apparent, those statistics can be misleading when groups are starting at such different levels of poverty.

The more analytic part of the paper uses a dynamic logistic regression model that takes as the dependent variable the poverty status (0/1) of households in time t (the 2012 IHDS survey) separately for households who were poor or nonpoor at time period t −1 , factoring in a range of control.

• Y t =Poverty status in current period.
• Y t −1 = Poverty status in initial time period.
• X t −1 = Set of controls in initial time period (social group, education etc.)
• λ t−1 = Inverse Mills’ ratio
• ε t = Error term

The logistic regressions have the advantage of comparing groups by their log odds of escaping or entering poverty, comparisons that are not so closely determined by their initial poverty levels, as are percentages differences. For example, a group with a 20% poverty head count ratio that fell to 10% experienced the same change in log odds as a group that began with a 50% poverty rate that fell to 31%. Although the former group changed by only 10 percentage points, its poverty rate was cut in half; while the latter group had a 19 percentage point change but its poverty rate was reduced by only 38%.

All analyses are weighted by the sample weights in the IHDS2 files to reflect the national population. We also correct the standard errors to account for clustering into the 2435 primary sampling units.

Robustness checks

Our main analyses use the conventional Indian measure of household poverty that is based on consumption expenditures per capita using a poverty line drawn by the Tendulkar Commission. There are many other possible ways of identifying Indian poverty, and it is possible that our results would differ with different poverty definitions. We re-compute the analysis for some although certainly not all of these possibilities. Instead of adjusting for household size by using a per capita measure of consumption, we also use an “equivalenced” measure that divides total household consumption by the square root of the number of persons in the household – an adjustment more common in poverty measures in high-income countries. We also construct a measure of “severe poverty” with a cutoff at 80 percent of the official line and a measure of “near poverty” with a cutoff at 125 percent of the poverty line. Finally, we take advantage of the wide range of economic indicators available in the IHDS by using household income and household assets as measures of economic standing, drawing the poverty lines at a level to identify an equivalent percentage of the population as with the more conventional consumption measure.

Descriptive statistics

Poverty decline.

As with other data sources, we find that the head count ratio fell substantially over time from a high of 38 percent in 2004/05 to 21 percent in 2011/12, a drop of 17 percentage points. The decline was pervasive: all groups showed declining poverty over this period, although not always by equal amounts. By one measure, more poverty reduction happened in rural areas, which saw a 17 percentage point fall from 42 percent to 25 percent, as compared to 15 points in urban areas from 28 percent to 13 percent. However, the urban rate fell by more than half while the rural rate fell by slightly less than half so by that metric urban areas did better. The simplest overall summary is that poverty fell substantially in both rural and urban areas although the urban advantage was maintained.

A comparison across caste groups also shows substantial drops for all groups but the largest percentage point fall for Adivasis (23 points, see Figure 1 ). Dalits and those from other backward classes (OBC) experienced similar percentage drops of 18 to 20 points while Forward castes experienced only a 12 percentage point drop. The most vulnerable groups have had larger percentage point declines than the better-off groups, though these reductions are from very high poverty levels in the first round. So, while Forward castes and OBCs have had poverty rates fall almost in half, for Adivasis poverty declined by only a little over a third. And despite the major reductions, poverty levels are still very high for the Adivasis. Similarly, despite significant reductions for OBCs and Dalits, the caste differentials persist.

Poverty Incidence in 2005 and 2012 across Social Groups (IHDS).

We find that Muslims have done well, registering a 21percentage point reduction, 4 percentage points more than the Hindus. Close behind are the other minority religions and the Hindus with 16 and 17 percentage point reduction. Sikhs and Christians together show low reductions; this is not unexpected as these are already low poverty communities.

Escaping and Falling into Poverty

Nationally, escaping poverty among the previously poor was far more likely than falling into poverty among the previously non-poor. That difference was an important reason for the decline in poverty over the seven years. Of the 38 percent of the population who were poor in 2005, 25 percent had escaped by 2012, almost two-thirds of the previously poor. Slightly offsetting this, only 8 percent of the population newly fell into poverty, only a little over one eighth of the 62 percent of the population who had been non-poor. These panel results demonstrate substantial churning over time among the poor. Most households who were poor in 2005 had left poverty by 2012; some of this may be quite transient poverty, however, there remains much persistent poverty as well. The majority (61 percent) of poor households in wave two had also been poor in wave one. The growing prosperity pulled many households out of poverty but also left an unfortunate minority who benefited little from the economic growth. Altogether, 13 percent of all Indians were poor in both surveys.

In what follows, we focus on the escape rates of those who were previously poor, and the descent rates of those who were previously non-poor. These rates provide a better comparison of caste and other differences in the relative chances of poverty transitions than do the total population percentages that are more strongly determined by the initial, often very different, poverty rates.

Escape and descent rates are similar for rural and urban India, although urban areas enjoy an advantage of higher rates of escape and lower rates of falling into poverty. In urban India 71 percent of the poor in 2004–05 escaped poverty by 2011–12, whereas only 64 percent of the rural poor escaped poverty over the same period. At the same time about 16 percent of the rural nonpoor in 2004–05 had fallen into poverty by 2011–12, as compared to only 8 percent in urban areas.

The share of those escaping poverty varies even more significantly across social groups ( Figure 2 ). Escaping poverty is closely tied to traditional privilege. The largest shares are from amongst the Forward Castes (73 percent of the previously poor had become nonpoor by 2012) followed by the OBCs with 70 percent escaping poverty. The Dalit poor fared less at 63 percent escaping over seven years. But by far the most disadvantaged were the Adivasi poor among whom only 48 percent managed to leave poverty between the two surveys.

Percent of those Escaping & Falling into Poverty in 2011/12 compared to 2004/05, by Social Groups (All India, IHDS)

The risk of becoming newly poor follows the same pattern of immiseration across social groups. Among Adivasis who were not poor in 2005, 24 percent had become poor by 2012. Dalits follow next with 19 percent of the previously nonpoor falling into poverty. But only 14 percent of nonpoor OBCs had become poor between the two surveys, and an even lower 9 percent for Forward castes.

Thus, despite the fact that poverty incidence has fallen substantially and large numbers have managed to escape it, the handicap of historic exclusion and continued marginalisation is still felt by the most disadvantaged groups; fewer amongst them are able to lift themselves out of poverty and more of them risk falling back into it. Some of the differences among social groups and between rural and urban residents probably reflects the fact that non-poor Dalits and non-poor rural residents may be closer to the poverty line than others and thus have a higher risk of falling back below that line. In the multivariate analyses, we can control for those differences.

Lagged Logistic Regression

Large segments of the Indian population have moved out of poverty, but which household characteristics enabled them to escape poverty or put them at risk of falling into poverty? We run two lagged logistic regressions to tease out some of these effects. First, we measure the odds of a person who was poor in wave one becoming non-poor in wave two, given demographic, economic and social characteristics of the household in wave one. Then we measure the odds of a person becoming poor in wave two given that the person was not poor in wave one. We proceed stepwise for each equation, first calculating a reduced form model to investigate variations across caste and religion and between urban and rural areas. These models also control for the household’s economic distance from the poverty line, state fixed effects, and a selection effect based on attrition between the two surveys. Then we add controls for social background and economic resources that may explain the group and rural-urban differences: highest adult education, main income source, bank and credit resources, landholding, irrigation, social capital, dependency ratio, and household size.

Urban/rural differences

Table-1 gives the odds ratios of escaping and falling into poverty in wave two, separately for those who were poor and nonpoor in wave one. For the social group characteristics reported in the reduced form models, the results are similar to the bivariate results reported above with some interesting exceptions.

Regressions of 2004–5 to 2009–10 poverty transitions, on 2004–5 characteristics.

Source: Authors’ analysis of India Human Development Surveys.

First, urban households’ advantages noted above are found only for the risk of newly falling into poverty. Among the nonpoor in 2005, urban residents had less than two-thirds the odds of becoming poor in the second wave as did rural residents of the same expenditure level, living in the same state. The volatility of rural incomes is clearly reflected in this difference, but the non-significant difference for escaping poverty suggests also that urban poverty may be as persistent as rural poverty.

Rural residents’ higher risk of falling into poverty is more than explained by their disadvantages in education, income sources, and other resources. In the full model with all these controls, urban residents have almost twice the risk of falling into poverty as equivalent rural residents.

And their chances of escaping poverty are only about half that for similar rural residents. As we will see below, urban residents’ greater human, social, and financial capital cushions them from poverty transitions; except for these advantages, their poverty transitions would be even higher than for rural residents.

Social groups and religion

Caste differences also follow the bivariate results reported above, but unlike the rural-urban differences, the regression results show that caste differences are quite similar for falling into and escaping poverty. The enormous handicap of Adivasis is shown well in these coefficients. Adivasis had just 40 percent of the odds that Forward Castes had of escaping poverty. At the same time, they were two and a half times as likely as Forward Castes to newly fall into poverty. Surprisingly little of these higher risks are explained by Adivasis’ lower educational, social, and economic resources. In the full model, Adivasis still had 49 percent of the odds of equivalent Forward Castes of escaping poverty and 1.7 times the risk of newly falling into poverty.

Dalits also were disadvantaged both in escaping and avoiding poverty between the two surveys. They had just 64 percent of the chance that Forward Castes had of escaping poverty and were two times as likely to fall into poverty; not as disadvantaged as Adivasis, but still substantially more at risk than Forward Castes or even OBCs. Interestingly, most of the Dalit disadvantage can be explained by their lower resources included in the full model. Their lower odds of escaping poverty rise from 64 before controls to a non-significant 88 percent after; and their higher risk for newly falling into poverty drops from 2.0 times to a non-significant 1.1 times after controls. The smaller risks after controls may be an optimistic result; to the extent these social and economic resources are subject to policy interventions or to Dalits’ own efforts, we can expect their higher poverty rates to eventually disappear.

OBCs were not very different from Forward Castes: they were not significantly different from the Forward Caste odds of escaping poverty. Their odds of falling into poverty are 1.24 times the odds for Forward Caste,, a difference that is entirely explained by their lower resources.

Muslim disadvantages in poverty transitions are somewhat different. As shown in the reduced form models of Table 1 , Muslims have slightly lower odds of escaping poverty and slightly higher risks of falling into poverty than Forward Caste Hindus. Their relative disadvantages are most similar to the relative risks facing OBCs. But their position looks quite different after controls for their 2005 resources are included in the full model. Compared to Forward Caste Hindus in a similar educational, social, and economic position, their odds of escaping poverty are 0.789 times the odds for Forward Castes, while their chances of falling into poverty are 1.407 times that for Forward Castes. That is, controls for their resources shows Muslims to be more, not less, vulnerable to poverty transitions.

Resources: Education

Education is the quintessential human capital credential and provides strong and consistent protection against falling into poverty. A household with a college graduate is 0.56 times as likely to fall into poverty than an equivalent illiterate household (i.e., illiterate households are over two times as likely to fall into poverty as a household with a college graduate). Even for households who were poor in 2005, those with higher education were able to escape more often, but the education effect on avoiding poverty is larger and extends further down the schooling ladder than the education effect on escaping poverty. As Table 1 shows, difference between educated and illiterate households in escaping poverty is statistically significant only when an adult household member has a college degree, in contrast, even completion of primary education significantly reduces the odds of falling into poverty and this effect increases at higher levels of education. Compared to illiterate households, the odds of escaping poverty are 0.814, 0.618 and 0.435 respectively for households with 5–9 grades of education, 10–11 grades and college degree respectively.

More education is also part of the reason why urban residents escape poverty more often than rural residents and why Forward Castes escape more often than Dalits. None of these differences are completely explained by education. Logistic regressions controlling only for education (not shown) suggest that substantial differences would remain even if the groups had equal education. But educational differences are perhaps the most susceptible to policy intervention among the resources we study so their importance in reducing (although not eliminating) age-old social disadvantages should not be understated.

Income sources

Part of the reason education provides protection against poverty is that it may provide entrance to stable jobs. Employees with a regular monthly salary have lower odds of falling into poverty than all other households. These salaried jobs have the dual advantage of paying well and paying steadily. Only 20% percent of salaried households were in poverty to begin with in 2005. And the chances of the other 80% percent entering poverty after seven years were among the smallest for any type of household.

However, for the 20% percent of salaried households already in poverty in 2005, their salaried positions were not nearly as good a benefit for escaping poverty by 2012. Poor salaried households were not significantly more likely to exit poverty than were poor cultivating households. For the poor, a steady salary may also mean steady poverty. The salaried advantage is a low frequency of initial poverty because of higher than average incomes and low risk of falling into poverty because of the steadiness of incomes, but a steady salary is not much comfort if a household is already at a poverty level.

There are surprisingly few differences among other sources of income in households’ odds of transitioning into or out of poverty once initial economic and social levels are held constant. Cultivators appear to have no more or no less chance of falling into or escaping from poverty than do business households or those depending on wage labour. Wage labour households are more likely to start out poor, but holding constant that initial level, they are no less likely than equivalent cultivating or business households to escape poverty – nor no more likely to fall into poverty if starting as non-poor. Nor are households primarily receiving remittances, government benefits, or property income very different, although our samples of those households are especially small so any conclusions about their transitions must be especially tentative.

Among cultivators, there is some evidence that larger landowners may have been better off due to their asset stability; the more land owned the lower the risks of falling into poverty and the greater the chances of escaping poverty. But more importantly, access to irrigation reduced subsequent poverty risks for cultivators, as they are not dependant on seasonal rains for their water needs. As Table 1 shows, landowners with irrigation are 0.651 times as likely to fall into poverty as compared to those landowners who depend on seasonal rains. Irrigation was even helpful for cultivators escaping poverty, increasing their odds to 1.277 times the odds of more rain-dependent cultivators.

As would be expected, bank accounts help prevent falls into consumption poverty and are significant also for rising out of poverty. The expansion of banking across India offers a major opportunity to reduce the volatility of poverty transitions. Membership in a credit society appears less successful in smoothing out consumption volatility in order to avoid poverty. The IHDS results also confirm the importance of debt as a source of falling into poverty: Nonpoor households who report having some debt in 2004–5 have a 26 percent greater chance of having fallen into poverty seven years later; debts did not lower or raise the chances of poor households escaping poverty between the two surveys.

Household Structure

Larger households have less chance of falling into poverty and more chance of escaping poverty once there. More people may mean more labour resources for the future and a greater flexibility to utilize all household resources. Similarly, a higher dependency ratio in 2005 also raises the chances of escaping poverty or not falling into poverty in the next seven years. This may seem counter-intuitive at first since cross sectionaly, the fewer household members who work, the more likely the household is to be in poverty. But some of these dependents in 2005 can later enter the labour force, especially young men who finish their education, thus enabling the household to escape poverty or to avoid falling back into poverty. And young women may finish their schooling and marry out of the household thus raising the per capita consumption levels. Measurement issues may play a role in the household size relationship since the poverty line is drawn on the basis of consumption per capita, so that larger households have a larger denominator. But, as we see in the robustness checks, poverty measures with lower penalties for household size also show larger households had higher rates of transition out of poverty and less chance of falling into poverty.

Selection effects and distance from the poverty line

Not surprisingly, the further above the poverty line a household is, the lower its risk of falling into poverty seven years later. And poor households closest to the poverty line are the ones most likely to escape poverty. Some of this beneficial effect can be attributed to other characteristics of those households, higher in per capita consumption: they tend to be better educated, more likely to have a salaried job, and more likely to own irrigated land. But the remaining importance of absolute levels of per capita consumption reminds us that the poor and the nonpoor are not discrete categories but necessarily somewhat arbitrary lines drawn in a consumption continuum. Controlling for the a household position on this continuum is nevertheless important since other differences, for instance, between Dalit and Forward Caste households, are often more a result of the fact that poor Dalit households are much poorer than the poor Forward Caste households. It is as much their greater poverty than their Dalit status that holds them back from escaping poverty or increases their risks of falling back into poverty.

The probability of a household being re-interviewed is positively related to a higher risk of falling into poverty or not escaping poverty. Re-interviewed households are in some ways similar to households at greater risk. This may be somewhat surprising since poverty in 2004–5 is correlated with attrition between the two surveys. Re-interviewed households have much in common with the measured social and economic characteristics of households at less risk of falling into poverty. Larger rural households with more land were more often re-interviewed in 2011–12; households with less property ties to their villages and neighbourhoods were more likely to have left after seven years. The positive association between likelihood of attrition and escapes from poverty only appears after these other factors are held constant. The types of households who were not found – who had migrated out of their original villages or urban neighbourhoods – resembled households who improved their economic position over the next seven years. This resemblance may also suggest that unmeasured characteristics of households who improved may be similar to the unmeasured characteristics of households who left their original homes to make a better life somewhere else. In any case, the results show some evidence of selection effects that temper our results somewhat because out-migrants are not included in the sample.

Poverty definitions have long been an intense focus of debate both internationally ( Atkinson, forthcoming ) and in India ( Deaton and Kozel 2005 ). For our analysis of transitions into and out of poverty, the important question is whether different definitions would yield different conclusions. Our robustness checks vary assumptions about economies of scale, about where to draw the poverty line, and about which economic dimension (consumption, income, or assets) is used to define poverty. Results for each of these measures are reported in Appendix Table 3 . For the most part, the main conclusions described above are not affected by the choice of poverty measure. For example, salaried employment protects against falls into severe poverty or into near poverty; whether consumption, income, or assets are used to rank households; and whether household size is adjusted to a per capita measure or less drastically to an “equivalenced” measure using the square root of household size. Nor do any of these alternative poverty measures reveal much effect of salaried employment on the odds of escaping poverty once there.

Appendix T3.a

Logistic Regression using Alternate Poverty Measures

Some exceptions to the main patterns are understandable. For example, having a bank account protects against falls into consumption poverty or into asset poverty, but not so clearly against falls into income poverty. Also, poverty status between the two surveys is more stable when poverty is measured in terms of household assets rather than household consumption: using asset poverty, only 4 percent of Indians became newly poor between the two surveys and only 19 percent left poverty. The corresponding percentages for consumption poverty were 7 percent and 29 percent.

Our IHDS results reaffirm the conclusions that poverty has indeed fallen substantially over this seven-year period. In addition, they enable us to quantify the household transitions both out of but also into poverty despite the overall trend. We find that the majority (65%) of households who were poor in 2005 had escaped poverty by 2012. This is a remarkable achievement that documents how even the poor shared economic prosperity during these times.

Their successes were only partially offset by the 14% of the non-poor who fell into poverty during this period. These newly poor, however, raise the issue of transient poverty. Not all the poor have always been poor, and public policy responses to the transient poor may need to be quite different from policies for the long-term poor ( Krishna 2007 ). Nevertheless, long-term poverty remains a problem. Despite the fact that most of the 2005 poor had escaped poverty by 2012, most of the households who were poor in 2012 had also been poor in 2005.

Falling into poverty versus Exiting from poverty

A household’s level of human and physical capital is more important in explaining who avoids falling into poverty than explaining which poor households escape poverty. Not surprisingly, more education reduces not only levels of poverty but also especially new entrances into poverty. Higher education also enhances exits from poverty but at a lower rate than reducing new entrants. While neither entering nor remaining in poverty is common among the best educated, education reduces poverty more because it reduces falls into poverty rather than helping families escape. The best educated never experience poverty at all. Or, to observe from the other end, illiteracy both raises the risk of falling into poverty and reduces the chances of escaping, but the effect on falling into poverty is much greater than the effect on remaining in poverty. As a consequence, the illiterate are especially vulnerable to spells of poverty.

Salaried employment reduces poverty in much the same way. Households with a salary income have a steady and reliable source of support that cushions them against economic misfortune. They rarely fall into poverty although on the rare instance when that happens, they are little more likely to emerge quickly than are farmers or business owners.

Irrigated land protects farmers in much the same way as higher education or a salaried income protects all households. Farmers with irrigation are less likely to fall into poverty than small farmers without irrigation, but for the minority who have become poor, these assets are somewhat helpful in escaping poverty.

Rural areas also have higher poverty rates primarily because rural households are more likely to fall into poverty. An agricultural base induces dependency on the fluctuations of seasonal weather patterns, and these fluctuations drive rural households into poverty more frequently than urban households. These fluctuations may be increasing in frequency, such as fluctuations in the Indian monsoon rains, and could be a manifestation of global climate change. However, rural households escape poverty at rates not much different than urban households; in fact in the reduced form model the rural-urban difference is not statistically significant. So, rural poverty is disproportionately a problem of higher risks of falling into poverty. This higher risk is explained by the opportunities available to rural households: less educated, less of a chance for salaried jobs, fewer bank accounts; these and other differences are important enough that in the full model comparing urban and rural households with equivalent characteristics, it is the urban residents who have a higher risk of falling into poverty.

These background factors in 2005 are somewhat better at predicting which households avoid falling into poverty than identifying households who escape from poverty. For the most part, the measures that predict exiting poverty, also predict not falling into poverty, but the odds are generally lower and sometimes not statistically significant. The caste variables are a partial exception to these stronger effects on entrances than exits. Our analysis shows that while Dalits and Adivasis have experienced major movements out of poverty, they still lag behind OBCs and Forward Castes in both rates of exit from poverty and avoiding new falls into poverty. Dalits and especially Adivasis suffer from the worst of both worlds: they have lower rates of escape and higher rates of entry. Much of the disadvantage for Dalits can be explained by their lower levels of human capital, especially their lower education, the lack of salaried employment, and their smaller households. But these same factors do not explain as much of the Adivasi disadvantage. Adivasis remain at a higher risk of poverty – both entries and lack of exits – than equivalent Forward Caste Hindus. They suffer equally from the risks of falling into transient poverty and of remaining there, permanently poor.

Further research

The availability of panel data greatly expands our ability to understand the dynamics of poverty. In this paper, we have concentrated on the prior characteristics of households who escape or fall into poverty. The results help answer the question of who is most at risk of falling into poverty and who has the best prospects of escaping poverty. Many other questions can be asked of these panel data that are beyond the scope of the current paper. One fruitful area for exploration would be to investigate the intervening events between the two surveys that distinguish households who escaped poverty from those who remained; and households who fell into poverty from those who avoided that fate (e.g, Bane and Ellwood 1986 ). Household divisions, deaths and illnesses, new sources of income are among the many events that may propel households out of or into poverty.

Our analyses have also concentrated on the household characteristics that predict entrances into and exits from poverty, but households’ poverty transitions also depend on economic and social factors beyond the borders of the household itself. Transportation connections to employment, climate patterns, industry structure, and civil unrest are examples of the many contextual forces that need to be studied. Differences in public policies and in the implementation of those policies are especially important for poverty transitions. Other research using the IHDS data has shown that participation in the Mahatma Gandhi National Rural Employment Program may have played a useful role in reducing poverty ( Desai, Vashistha, and Joshi 2015 ).

It is also important to acknowledge that many regressors included in our analyses are endogenous, thus, the observed correlation between these regre ssors and poverty dynamics may well be spurious. For example, many caste associations set up banks, scholarship and hostels for students and food distribution programs. Thus, caste membership may determine education, bank accounts as well as household food consumption ( Desai and Dubey 2011 ). This argues for caution in interpreting these results and re-examining this evidence with panel data that has more than two rounds to better understand the dynamic nature of regressors along with the poverty dynamics.

Transient and Chronic Poverty

A growing literature on the dynamics of poverty has focused more on the questions of chronic poverty and poverty traps than on the questions of entries and exits that we have emphasized ( Shepherd and Mehta 2006 ; Glauben et al., 2012 ; Naschold 2012 ). While analyses of poverty durations are an obvious advance over earlier research that could look only at a single moment of poverty, we believe that identifying which households exit or enter into poverty offers a useful, more dynamic, alternative to earlier work on poverty durations. The characteristics of households who remain poor over the two IHDS waves identify the factors that raise the risk of chronic poverty. Similarly, the characteristics of nonpoor households who subsequently fall into poverty identify who is most at risk of transient poverty.

We also believe that the past poverty literature often pays insufficient attention to transient poverty, as if falling into poverty was less worrisome than remaining in poverty. Is it really worse for one household to be poor for two years than for two households to be poor for a year? Certainly, few have asked the poor themselves which experience is worse (although see Davis 2007 ). One can imagine that under some circumstances, transient poverty might be more distressing for previously nonpoor households than is persistent poverty for the long-term poor. Anirudh Krishna has been especially insistent that we should not neglect falling into poverty: “Falling into poverty is frequent, traumatic, frequently irreversible, and therefore serious enough to merit separate policy attention” ( Krishna 2007 : 1951).

Nor has there been enough research on the consequences of transient versus persistent poverty, for the children being raised in those households, for the physical and mental health of all the household members, or for the marriage bonds that hold nuclear households together or for the filial and fraternal bonds that hold together more extended households (but see Benzeval and Judge 2001 , Baevrea and Kravdal 2013). The sometimes too casual dismissal of transient poverty in the research literature (“being poor at a few moments in time” Barrett and Carter 2013) seems to suggest that poverty consequences must accumulate over time making persistent poverty more of the problem, but that is a largely unexamined assumption. Until we have better data on these consequences, a more balanced approach between new entries into poverty and the inability to escape poverty would leave us in a better position for future understanding.

Poverty research in India has enjoyed a long and distinguished history. We are ready to move to the next stage by better investigating the dynamics of entries and exits into poverty. Poverty is always a misfortune, but because different types of poverty may have different causes and consequences, we need to move beyond more static investigations or even analyses of trends based on repeated cross-sections.

This first look at IHDS panel data suggests that traditional social and economic disadvantage are reproduced in both types of poverty transitions: Dalits and Adivasis are more susceptible both to entry into and lack of escape from poverty than are Forward Castes or even OBCs. But other characteristics prove more important for one type of transition than another. Salaried work and more education are especially important for avoiding falls into poverty but they have less or even no role in predicting escapes from poverty. Our results demonstrate each of these possible relationships and thus reinforce the need to explore poverty dynamics more fully.

Appendix T3. b

• The study examines all India panel data for 2005 & 2012.
• It identifies people who escaped or fell into poverty over this period.
• Dalits and Adivasis face higher risk of falling into poverty then the rest
• Regression shows factors helping escape & falling are different from each other

Acknowledgments

We are grateful to our colleagues at the National Council of Applied Economic Research (NCAER), New Delhi, and especially the IHDS team there for helpful comments, throughout the preparation of this paper. An earlier version of the paper was presented at Jawaharlal Nehru University where we received several useful suggestions. We are also grateful for several useful ideas from World Development reviewers. Our data are from the India Human Development Surveys, 2005 and 2012. These surveys were jointly organized by researchers at the University of Maryland and NCAER. The data collection was funded by grants R01HD041455, R01HD046166, and R01HD061408 from the National Institutes of Health and by a supplementary grant from the Ford Foundation. Data management was funded by the UK government as part of its Knowledge Partnership Program (KPP) and analysis was carried out with the aid of a grant from the International Development Research Centre, Ottawa, Canada.

1 These estimates are based on the ‘thick’ rounds of Consumption Expenditure Survey for 2004/05 and 2011/12 conducted by the National Sample Survey Organisation. Planning Commission of India Press Release

2 NSS - Consumption Expenditure Data is a large countrywide sample survey conducted every 5 years and collects household level information on rupee expenditure on consumed items. This household consumption expenditure is then used as a proxy for the household’s monthly income.

3 The Government of India appointed a committee under the chairmanship of the Suresh Tendulkar. The Committee reviewed the existing methodology of estimating poverty in India and recommended new poverty lines for the rural and urban areas. ( GOI, 2009 ). For details of methodology, click link to online the report ( Tendulkar Committee Report Online )

4 Thus, the coefficient for having a bank account reflects the importance of banks only for the 82 percent of households with eligible women; we cannot test whether the estimate would be different in other households. The value of the substituted mean, 0.36, has no effect on this coefficient but determines the size of the eligible woman dummy coefficient.

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Contributor Information

Amit Thorat, Jawaharlal Nehru University.

Reeve Vanneman, University of Maryland, U.S.A.

Sonalde Desai, University of Maryland, U.S.A.

Amaresh Dubey, Jawaharlal Nehru University.

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Effects of Economic Liberalization on Poverty and Inequality in India – A Case Study of Pre-COVID-19 Period

• First Online: 19 May 2022

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• Rohit Narayan 6 &
• Satyendra Narayan 7  

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The purpose of this research is to study the effects of neoclassical trade liberalization policies enacted in India in 1991 to determine the effect on levels of poverty and income inequality. This research predicts that poverty and economic inequality will be reduced due to implementation of economic liberalization policies. The research uses empirical data from the National Sample Survey Organization (NSSO), in India and develops a regression model to determine the effects of economic liberalization on income inequality and absolute poverty. The results of the regression model suggest that income inequality and poverty decreased during the year liberalization policies were enacted, but is not statistically proven with enough confidence that liberalization is strongly correlated with a reduction in inequality and poverty. There is a weak statistical correlation that suggests inequality increased in the Indian urban sector, and decreased in the rural sector due to liberalization. In conjunction with a literature review where more robust data and econometric models are applied, the empirical analysis by complimented with the fact that in general income inequality decreased due to economic liberalization policies alone, holding all exogenous factors that affect income inequality constant. The literature review also confirms that poverty levels decreased with economic liberalization, holding all other exogenous factors that affect poverty constant. The implication of this research is that liberalization polices have been successful for overall development in India, and suggests that implementation of liberalization policies may be desirable in nations under similar circumstances as India in the era before its liberalization.

• Economic Liberalization
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Narayan, R., Narayan, S. (2022). Effects of Economic Liberalization on Poverty and Inequality in India – A Case Study of Pre-COVID-19 Period. In: Anandan, R., Suseendran, G., Chatterjee, P., Jhanjhi, N.Z., Ghosh, U. (eds) How COVID-19 is Accelerating the Digital Revolution. Springer, Cham. https://doi.org/10.1007/978-3-030-98167-9_11

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Understanding Poverty in India: Causes, Estimation, and Challenges

Table of Contents

(Relevant for Economics Section of General   Studies Paper Prelims/Mains)

Poverty signifies a state or circumstance wherein an individual or a community lacks the necessary financial means and fundamental requisites to achieve a basic standard of living. It indicates that the earnings derived from employment fall to such a minimal extent that fundamental human necessities remain unattainable.

As per the World Bank’s perspective, poverty denotes significant deprivation in overall well-being and encompasses multifaceted dimensions. This encompasses inadequate income levels and the incapability to secure essential commodities and services vital for survival with dignity. Moreover, poverty encompasses limited access to proper healthcare and education, deficient availability of clean water and sanitation facilities, insufficient physical safety, absence of empowerment, and limited potential and opportunities to enhance one’s quality of life.

Within India, as of 2011, around 21.9% of the population resides below the national poverty threshold.

In 2018, nearly 8% of the global workforce and their families were constrained to subsist on an income of less than US$1.90 per individual per day, in line with the international poverty benchmark.

Poverty estimation in india

• Poverty assessment in India is conducted by NITI Aayog’s task force, employing data gathered by the National Sample Survey Office under the Ministry of Statistics and Programme Implementation (MOSPI). The poverty line in India is determined by calculating the poverty threshold, which relies on consumption expenditure rather than income levels.
• In India, the evaluation of poverty is based on consumer expenditure surveys carried out by the National Sample Survey Organisation. A household is classified as poor if its expenditure falls below a specified poverty line. The extent of poverty is gauged through the poverty ratio, denoting the proportion of the impoverished population to the total population, presented as a percentage and commonly referred to as the head-count ratio.
• The Alagh Committee (1979) established the poverty line considering a daily minimum caloric intake of 2400 and 2100 calories for adults in rural and urban areas, respectively. Subsequent committees, such as the Lakdawala Committee (1993), Tendulkar Committee (2009), and Rangarajan Committee (2012), have contributed to refining poverty estimation methodologies.
• According to the Rangarajan committee’s findings (2014), the poverty line is set at a Monthly Per Capita Expenditure of Rs. 1407 in urban regions and Rs. 972 in rural areas.
• Population Explosion: India’s population has consistently surged over the years. In the past 45 years, it has grown at an annual rate of 2.2%, signifying an average addition of approximately 17 million individuals to the country’s populace each year. This surge further escalates the demand for consumer goods substantially.
• Diminished Agricultural Productivity: A pivotal factor contributing to poverty is the low productivity within the agricultural sector. This situation is multifaceted. Primarily, it stems from fragmented and divided land holdings, lack of access to capital, ignorance regarding modern farming technologies, reliance on conventional cultivation techniques, and losses during storage.
• Inefficient Resource Utilization: The prevalence of underemployment and concealed unemployment, particularly in the agricultural domain, has resulted in diminished agricultural output and a corresponding decline in living standards.
• Limited Economic Growth Rate: Economic advancement has been sluggish in India, particularly during the initial 40 years following independence, prior to the economic liberalization reforms in 1991.
• Escalating Prices: Persistent inflation in the country has augmented the hardships endured by the impoverished. While a small portion of the population has benefited, those from lower income strata have borne the brunt, struggling to meet even their most basic needs.
• Unemployment: Unemployment stands as another notable contributor to poverty in India. The surging population has led to a concurrent surge in job seekers, but the growth of job opportunities has not kept pace with the escalating demand.
• Shortage of Capital and Entrepreneurial Ventures: The insufficiency of capital and entrepreneurial activities has resulted in low investment levels and insufficient job creation within the economy.
• Social Factors: Beyond economic factors, various social barriers obstruct the eradication of poverty in India. Some of these hindrances include inheritance laws, the caste system, and certain entrenched traditions.
• Colonial Exploitation: The two-century-long British colonization and dominion over India had a detrimental impact, causing the decline of traditional handicraft and textile industries. The colonial policies converted India into a mere supplier of raw materials for European industries.
• Climatic Influences: The majority of India’s impoverished population resides in states like Bihar, Uttar Pradesh, Madhya Pradesh, Chhattisgarh, Odisha, Jharkhand, among others. Natural calamities such as frequent floods, disasters, earthquakes, and cyclones heavily impact agriculture in these regions.

The Global Multidimensional Poverty Index-2018, issued by the UN, highlighted that around 271 million individuals transitioned out of destitution between 2005-06 and 2015-16 within India. The poverty rate within the nation has nearly halved, plummeting from 55% to 28% over the course of a decade. Nevertheless, a substantial segment of India’s population still resides below the Poverty Line.The swift expansion of the economy and the integration of technology into social sector initiatives have played a pivotal role in significantly reducing extreme poverty within the country.Despite the rapid strides made in terms of growth and advancement, an unacceptably large portion of our populace continues to grapple with extensive and varied forms of deprivation. Consequently, addressing poverty in India necessitates a more comprehensive and all-encompassing strategy.

To master these intricacies and fare well in the Sociology Optional Syllabus , aspiring sociologists might benefit from guidance by the Best Sociology Optional Teacher and participation in the Best Sociology Optional Coaching . These avenues provide comprehensive assistance, ensuring a solid understanding of sociology’s diverse methodologies and techniques.

poverty in India, poverty estimation, poverty causes, poverty line, NITI Aayog, National Sample Survey Office, MOSPI, Alagh Committee, Lakdawala Committee, Tendulkar Committee, Rangarajan Committee, population explosion, agricultural productivity, resource utilization, economic growth rate, inflation, unemployment, capital shortage, social factors, colonial exploitation, climatic influences, Global Multidimensional Poverty Index, poverty reduction, technology integration, social sector initiatives, Best Sociology Optional Coaching, Sociology Optional Syllabus.

Choose T he Best Sociology Optional Teacher for IAS Preparation?

At the beginning of the journey for Civil Services Examination preparation, many students face a pivotal decision – selecting their optional subject. Questions such as “ which optional subject is the best? ” and “ which optional subject is the most scoring? ” frequently come to mind. Choosing the right optional subject, like choosing the best sociology optional teacher , is a subjective yet vital step that requires a thoughtful decision based on facts. A misstep in this crucial decision can indeed prove disastrous.

Ever since the exam pattern was revamped in 2013, the UPSC has eliminated the need for a second optional subject. Now, candidates have to choose only one optional subject for the UPSC Mains , which has two papers of 250 marks each. One of the compelling choices for many has been the sociology optional. However, it’s strongly advised to decide on your optional subject for mains well ahead of time to get sufficient time to complete the syllabus. After all, most students score similarly in General Studies Papers; it’s the score in the optional subject & essay that contributes significantly to the final selection.

“ A sound strategy does not rely solely on the popular Opinion of toppers or famous YouTubers cum teachers. ”

It requires understanding one’s ability, interest, and the relevance of the subject, not just for the exam but also for life in general. Hence, when selecting the best sociology teacher, one must consider the usefulness of sociology optional coaching in General Studies, Essay, and Personality Test.

The choice of the optional subject should be based on objective criteria, such as the nature, scope, and size of the syllabus, uniformity and stability in the question pattern, relevance of the syllabic content in daily life in society, and the availability of study material and guidance. For example, choosing the best sociology optional coaching can ensure access to top-quality study materials and experienced teachers. Always remember, the approach of the UPSC optional subject differs from your academic studies of subjects. Therefore, before settling for sociology optional , you need to analyze the syllabus, previous years’ pattern, subject requirements (be it ideal, visionary, numerical, conceptual theoretical), and your comfort level with the subject.

This decision marks a critical point in your UPSC – CSE journey , potentially determining your success in a career in IAS/Civil Services. Therefore, it’s crucial to choose wisely, whether it’s the optional subject or the best sociology optional teacher . Always base your decision on accurate facts, and never let your emotional biases guide your choices. After all, the search for the best sociology optional coaching is about finding the perfect fit for your unique academic needs and aspirations.

To master these intricacies and fare well in the Sociology Optional Syllabus , aspiring sociologists might benefit from guidance by the Best Sociology Optional Teacher and participation in the Best Sociology Optional Coaching . These avenues provide comprehensive assistance, ensuring a solid understanding of sociology’s diverse methodologies and techniques. Sociology, Social theory, Best Sociology Optional Teacher, Best Sociology Optional Coaching, Sociology Optional Syllabus. Best Sociology Optional Teacher, Sociology Syllabus, Sociology Optional, Sociology Optional Coaching, Best Sociology Optional Coaching, Best Sociology Teacher, Sociology Course, Sociology Teacher, Sociology Foundation, Sociology Foundation Course, Sociology Optional UPSC, Sociology for IAS,

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• Poverty in India Essay for Students in English

Essay on Poverty In India

People living in poverty do not have enough money for basic necessities such as food and shelter. An example of poverty is the state a person is in when he is homeless and does not have enough money. The rate of poverty in India is increasing because of the population in the urban areas. Most importantly, crores of peoples are below the poverty line and most of the people are on the borderline of poverty. Poverty in India is seen mainly in the rural areas because of the uneducated and unemployed and increased population. Many people do not afford to get proper foods for their daily life and even they don’t have their own homes, they sleep on the footpath or road, more populations need more food, money, and for staying houses but due to lack of this poverty grows very quickly, thus in addition rich are growing richer and the poor becoming more poorer which becomes difficult to fill the gap. Poverty has many effects like it reduces poor housing, illiteracy, increase the rate of child labour and unemployment, poor hygiene hence these poor people can not afford a balanced diet, nice clothes, well education etc. reason only because they don’t have much money to afford this. Poverty can be controlled by giving them proper education and also providing the proper facilities to the farmers so that those farmers get more profitable and do not migrate to cities in search of employment. Also, the illiterate people should get proper education to make their life better. Family planning is also essential for coming out of poverty. Poverty in our country is from ancient times. Even earlier times the poor people were not given the place that rich people used to get even if they were not allowed to enter religious places. Main causes of poverty are like unemployment, lack of education, poor utilization of resources, corruption and poor government policy.

How You Can Improve or Solve Poverty in India?

Poverty can be solved by improving food security by providing three meals a day and making them healthy and providing houses for those people at low cost and giving them proper education and facilities so that they can earn well and take care of their family and live a peaceful life. Awareness on population so that once the population is under control, the economy of the country will improve and move towards development and decrease in the poverty line. Poverty is becoming a complex problem for the people and for the government. How to overcome this, in India the poverty is high compared to other countries because the growth rate of per capita income per person is very low.

With lack of job opportunities many people move as a rickshaw puller, construction workers, domestic servants etc, with irregular small incomes hence they live in slum areas. Also, lack of land resources has been one of the major causes of poverty in India, even the small farmers of our country lead to poverty because they cultivate but do not get proper money in terms of profit and leads to poverty.

Population of India

The population has been increasing in India at a rapid speed, India’s population in 1991 was around 84.3 crores where was poverty at a high rate but now the current population of our country is around 130 crores whereas the population is almost doubled in last three decades but still not enough done for controlling the poverty in our country. Due to an increase in population, there is more unemployment, hence poverty is just the reflection of unemployment. More capital is required for making industry, giving proper transport facilities and other projects, hence the deficiency of its country is still underdeveloped and causes more poverty. Lack of skilled labor also leads to poverty because less-skilled labor have insufficient industrial education and training. Lack of infrastructure means that transport and communication have not been properly developed so that the farmers are not getting fertilizers for cultivation on time and industries do not get power supply and raw materials on time and thus end products are not marketed properly and not reachable on time. Because of poverty sometimes we don’t get those things for what we actually are. Hence to come out of poverty our government has to be more serious and also the citizens should take equal responsibilities. Remove the poverty from country governments has started many steps, in last 2-3 years we have seen that they become more serious by bringing GST in the action, demonetization so because of GST all the businessman can pay full tax and which will help to develop the country and the poverty ratio can be reduced. Steps of demonetization were taken so that black money can be utilized for the poor people and poverty can be reduced. We can overcome poverty by following all the guidelines of the government and can be free from poverty.

India's Poverty Factors

One of the biggest problems of poverty in India is the country's rapid population growth. As a result, there is a high rate of illiteracy, poor health-care facilities, and a lack of financial resources. Furthermore, the high population growth rate has an impact on individual income, making individual income much lower. By 2026, India's population is predicted to surpass 1.5 billion, making it the world's largest country. However, Economic growth is not rising at the same rate as the rest of the world. This indicates a labor shortage. About 20 million new jobs will be required to accommodate this big population. If such a vast number of people are poor, the number of poor will keep rising.

How Much Research is Important for Students to Write Good Essays?

The students must realize that brainstorming and a mind map of the essay will take them in the direction of their research. With the advent of the internet, the days are numbered for students who rely on a well-tipped encyclopedia from the school library as their only authoritative source for their story. If there is any real problem for our readers today is reducing their resources to a manageable number. At this stage, it is important to:

Make sure the research material is directly related to the essay work

Record detailed sources of information that they will use in their story

Communicate in person by asking questions and challenging their own bias

Identify the main points that will be highlighted in the story

Gather ideas, arguments, and opinions together

Identify the major issue they will discuss in their case.

Once these stages have been completed by the student, the student will be ready to make his points in a logical order and prepare an essay.

Therefore, the topic discussed on this page is poverty and poverty is not a human problem but a national one. Also, it should be addressed immediately with the implementation of effective measures. In addition, the eradication of poverty has been a prerequisite for sustainable and inclusive growth for individuals, communities, the country and the economy.

Paragraph Tips on Essay Writing

Each paragraph should focus on one main idea

The Paragraphs should follow a logical sequence, students should collect similar ideas together to avoid collisions

Paragraphs should be stated consistently, learners should be able to choose which line to reverse or skip.

Transition words and similar phrases, as a result, should instead be used to provide flow and provide a bridge between Paragraphs.

General Structure of an Essay

Introduction: Give the reader the essence of the essay. It sets out the broader argument that the story will make and informs the reader of the author's general opinion and method of questioning.

Body Paragraphs: These are the ‘flesh’ of the essay and outline the point made in the introduction by a point with supporting evidence.

Conclusion: Usually the conclusion will repeat the middle argument while providing a summary of the main reasons supporting the story even before linking everything back to the first question.

FAQs on Poverty in India Essay for Students in English

1. What are the Causes of Poverty in India?

The cause of poverty is very obvious in a country like India. The people in India are very careless about the population growth and due to which there is a lot of hassle and unnecessary elevation in population growth rate. This is automatically leading to poverty as there are fewer resources and more people to be served in each state in India. Various causes affect poverty:

Unemployment.

The intensity of population.

The high rate of inflation.

Lack of skilled labor

2. What are the Types of Poverty?

Although there are only two main types of poverty existing in India we will be learning all of them as mentioned in the following lines. The two main classifications of poverty are relative poverty and absolute poverty and both of them emphasize income and consumption. Sometimes, poverty cannot be blamed or associated with economic problems but also it must be associated with society and politics.

There are six types of poverty which are listed below:

Situational poverty.

Generation poverty.

Absolute poverty.

Relative poverty.

Urban poverty.

Rural poverty.

3. How to Reduce the Poverty Line in India?

India is a country that has been under the radar of poverty for centuries. The people of India are making efforts to take themselves out of the poverty line but there are a lot of hindrances. The lack of resources and limited alternatives have thrown the rural and urban residents below the poverty line making life unhealthy and miserable for them. 

Here are some measures listed below

Provide food, shelter and clothes facilities to poor people.

Encourage them for education either male or female. 

Give employment.

4. Why choose Vedantu for referring to the Poverty in India essay for students in English?

Students should refer to Vedantu for downloading as these solutions will be filling you with the basic knowledge of writing essays. There are loads of vocabulary words and phrases which will enable the students to write high-class essays. The Vedantu website provides 100% authentic content which will lead to additional accuracy of the student’s essay. Basic concepts of writing an essay are available free of cost on the Vedantu website. Avoid problems and enjoy hassle-free preparation with the help of Vedantu.

5. Why refer to Vedantu for studying the Poverty in India Essay for Students in English?

Vedantu not only provides comprehensive and detailed knowledge to the students but also imparts the ability to study on their own without any hassle to the students. The concept of Poverty in India Essay for Students in English is so beautifully explained in the Vedantu website that anyone who is reading the content and the rules will understand in one instance whatever that person is searching for. The students must know how to write good essays from a very young age and hence the experts at Vedantu are fulfilling that request of the students.

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Various Dimensions Associated with Poverty in India – UPSC Indian Society Notes

Poverty in India is a multifaceted issue that permeates through various dimensions of the nation’s socio-economic landscape. From economic disparity to social exclusion, inadequate access to education, healthcare, and basic amenities, the manifestations of poverty are diverse and pervasive. At its core, poverty in India is not merely an absence of material wealth but encompasses a complex web of factors that deprive individuals and communities of their fundamental rights and opportunities for a dignified life. Understanding the various dimensions associated with poverty is crucial for formulating effective policies and interventions aimed at alleviating its impact and fostering inclusive growth and development. This essay explores the intricate layers of poverty in India, delving into its economic, social, and human dimensions, while also shedding light on the systemic challenges that perpetuate its existence.

Table of Contents

3 Dimensions and 10 Indicators in MPI

The MPI assesses poverty at the individual level.

The two main dimensions of poverty in India are:

• Regional dimensions of poverty
• Social dimensions of poverty.
• Regional dimensions of poverty: 
• Poverty  in India has a regional dimension. Poverty profiles differ in rural and urban areas. 
• They also differ widely across states and regions of India. This is primarily due to wide regional disparities.
• There is a wide interstate imbalance in the economic growth of rich and poor states of India. During the post reforms period (1990- 2004), some states have accelerated and some states have decelerated in terms of economic development. There is a wide difference in the investment climate of different states of the Indian union.
• The rural–urban divide in India is widening after economic reforms. There is a deceleration in agricultural growth, which is the matter of concern in employment generation and poverty reduction.
• It is seen that both rural and urban poverty ratios in India are declining over the decades. But some states are lagging behind. 
• Orissa has the highest poverty ratio followed by Bihar and Madhya Pradesh. The percentage of chronically poor is quite high in Bihar (25 per cent in rural and 19 per cent in urban areas), Orissa (24 per cent in rural and 22 per cent in urban areas) and MP (21 per cent in rural and 22 per cent in urban areas). Chronic poverty is very low in Punjab, Haryana, Kerala, Himachal Pradesh, and Jammu and Kashmir.
• It is observed that in 1973 rural poverty was the highest in West Bengal and urban poverty was the highest in MP. During 1993, rural poverty was the highest in Orissa. The poverty level of STs in rural areas of Orissa is the highest at 73 percent, and that of Bihar it is 59 per cent. 
• The division of resources, as well as wealth, is very uneven in India, and this disparity creates different poverty ratios for different states. 
• For instance, states such as Delhi and Punjab have very low poverty ratios. On the other hand, 40-50 per cent of the populations in Bihar and Orissa live below the poverty line.
• Social dimensions of poverty
• Poverty in India is not merely an economic phenomenon but also a social one. Poverty is seen today as an outcome of multiple deprivations. It is disproportionately high among SCs and STs. Poverty gets disproportionately concentrated among casual labourers. The share of STs in poverty had gone up during the 1990s, and that of SCs remained more or less the same. Tribes are poor and deprived in India. Among social groups, SCs and STs and backward castes accounted for 81 per cent of the rural poor in 1999-2000.
• Growing dependency of rural and urban households on the casual labour market exposes the poor to market risks and tends to increase transient poverty, whereby households move in and out of poverty due to fluctuations in the labour market. The incidence of poverty among SCs is very high in Bihar, MP and UP in both rural and urban areas. In terms of income poverty and other indicators of human development such as education and health, STs are at the bottom.
• The gender dimension of poverty is very important in India. There is gender discrimination against women in the labour market. A majority of women are illiterate. The female members of the poor household suffer the most from all kinds of deprivation. The standard of living index data reveals that 57 per cent of children belonging to poor households of rural areas and 50 per cent of children belonging to poor households of urban areas are stunted.
• According to NCAER, 50 per cent of the rural population suffer from “capability poverty”. Only 43 per cent of rural households have domestic lighting and 25 per cent have access to tap water. It is widely recognised that while income poverty reduction is relatively easy, elimination of multiple deprivation is more difficult to achieve.
• So a poverty reduction strategy should go beyond income poverty and inadequacy of basic needs and rights as well as inadequate access to both productive assets and social infrastructure. Therefore, empowerment of the poor is considered a critical factor in accelerating poverty reduction. Empowerment is sought to be achieved by giving a role to the poor in governance and development decisions.
• At present NGOs, donor agencies, and development activists are exerting pressure on policy makers to involve all stakeholders in poverty alleviation projects and activate the panchayats and promote institutions like self help groups and user groups and mobilize the poor for collective action.
• According to SAPAP (2003) poverty is the product of livelihood systems and the socio-political and economic forces that shape them. SAPAP argues that multidimensional interventions revolving around land and other property rights, bargaining power for improved wage, holistic health care, micro finance and insurance, and physical and social security are needed for accelerating poverty reduction. The key issue is to weaken the stronghold of the rich in the governance of local institutions and facilitate the participation of the poor.

Q: What are the main causes of poverty in India?

Poverty in India stems from various factors, including:

• Unemployment: Lack of employment opportunities or underemployment is a significant contributor to poverty.
• Low Agricultural Productivity: Agriculture being a primary livelihood for many, low productivity due to factors like fragmented land holdings, inadequate irrigation, and outdated farming techniques perpetuates poverty.
• Social Inequality: The caste system, gender disparities, and unequal access to resources exacerbate poverty.
• Lack of Education: Illiteracy and limited access to quality education trap individuals in low-income occupations, perpetuating the cycle of poverty.
• Urban-Rural Disparities: Rural areas often face inadequate infrastructure, limited access to healthcare, and fewer employment opportunities compared to urban areas, leading to higher poverty rates.

Q: How does poverty impact health in India?

Poverty in India significantly affects health outcomes due to:

• Malnutrition: Poor nutrition resulting from inadequate food intake leads to stunted growth, weakened immune systems, and higher susceptibility to diseases.
• Limited Access to Healthcare: High healthcare costs and inadequate healthcare infrastructure prevent many impoverished individuals from accessing essential medical services.
• Poor Sanitation: Lack of access to clean water and sanitation facilities contributes to the spread of waterborne diseases, further compromising health.
• Higher Vulnerability to Epidemics: Poverty increases susceptibility to infectious diseases, as impoverished communities often lack resources for preventive measures and healthcare.

Q: How does poverty affect education in India?

Poverty negatively impacts education in India through:

• Lack of Access: Poverty-stricken families often cannot afford school fees, books, uniforms, or transportation, hindering access to education.
• Child Labor: Economic necessity forces many children into labor instead of attending school, perpetuating the cycle of poverty.
• Poor Infrastructure: Schools in impoverished areas often lack basic amenities like proper classrooms, sanitation facilities, and teaching materials, affecting the quality of education.
• Gender Disparities: Poverty disproportionately affects girls’ education due to cultural norms, resulting in lower enrollment and higher dropout rates among girls.

Q: How does poverty contribute to environmental degradation in India?

Poverty exacerbates environmental degradation in India through:

• Overexploitation of Resources: Poor communities often depend on natural resources for their livelihoods, leading to overexploitation of forests, water bodies, and land.
• Lack of Awareness: Poverty restricts access to education and information, limiting awareness about sustainable resource management practices.
• Vulnerability to Climate Change: Impoverished communities are more vulnerable to the adverse effects of climate change, such as natural disasters, which can further impoverish them by destroying livelihoods and infrastructure.
• Inadequate Waste Management: Poverty-stricken areas often lack proper waste management systems, leading to pollution of land, water, and air.

Q: What initiatives are in place to alleviate poverty in India?

The Indian government and various organizations have implemented several initiatives to address poverty, including:

• Social Welfare Programs: Schemes like the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), National Rural Livelihood Mission (NRLM), and National Food Security Act aim to provide employment, financial assistance, and food security to the poor.
• Education Initiatives: Programs like Sarva Shiksha Abhiyan (SSA) and Midday Meal Scheme focus on improving access to education and enhancing the quality of schooling.
• Healthcare Interventions: Initiatives like the National Health Mission (NHM) and Ayushman Bharat aim to provide affordable healthcare and health insurance coverage to impoverished communities.
• Rural Development Projects: Projects targeting infrastructure development, agricultural modernization, and rural electrification aim to uplift rural communities and reduce poverty.

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Essay on Poverty in India

In this essay we will discuss about Poverty in India. After reading this essay you will learn about: 1. The Concept of Poverty 2. Absolute and Relative Poverty 3. Incidence 4. Recent Poverty Debate in India 5. Poverty Differential among Different States in India 6. Poverty Alleviation Programmes 7. Economic Reforms and Poverty Eradication Programme 8. World Bank’s New Perception.

• Essay on the World Bank’s New Perception of Poverty

Essay # 1. The Concept of Poverty :

Poverty is a peculiar problem from which various countries of the world, particularly the Third World, have been suffering. There cannot be a common definition of poverty which can be broadly accepted everywhere. Thus there are large differences between the definitions of poverty accepted in various countries of the world.

Leaving aside all these differences it can be broadly said that poverty is a situation where a section of the society, having no fault of their own, is denied of even basic necessities of life. In a country, where a chunk of the population is deprived of even minimum amenities of life since long period, the country is suffering from a vicious circle of poverty.

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Poverty is considered as the greatest challenge faced by the societies in the third world countries. Poverty is also concerned with the comparison with respect to a fixed line—known as poverty line. However, the poverty line is fixed extraneously and, therefore, remains fixed for a certain period.

Poverty Line:

Normally poverty is defined with poverty line. Now the question which is relevant at this point is What is the poverty line and how is it fixed? The answer to the question is that the poverty line is a cut-off point on the line of distribution, which usually divides the population of the country as poor and non-poor.

Accordingly, people having income below the poverty line are called poor and people with income above poverty line are called non-poor. Accordingly, this measure, i.e., the percentage of people living below the poverty line is known as head count ratio.

Moreover, while fixing a poverty line we must take adequate care so that the poverty line is neither too high nor too low rather it should be reasonable one. While fixing the poverty line, consumption of food is considered as the most important criteria but along with it some non­food items such as clothing, and shelter are also included.

However, in India we determine our poverty line on the basis of private consumption expenditure for buying both food and non-food items. Thus it is observed that in India, poverty line is the level of private consumption expenditure which normally ensures a food basket that would ensure the required amount of calories.

Accordingly, the average caloric requirements for rural and urban person are fixed at 2,400 and 2,100 calories respectively. Thus, the required amount of calories would normally coincide with one of the class- interval or will fall between two intervals.

Using inverse interpretation method, one can find amount of consumption expenditure at which the minimum calorie requirement is met. This amount of consumption expenditure to meet the minimum calorie requirement for person is called the poverty line.

In India, broadly accepted definition of poverty emphasises more on minimum level of living rather than on reasonable level of living. Accordingly, it is broadly agreed that poverty can be termed as a situation where a section of the population fails to reach a certain minimum consumption standard. Differences arise with the fixing of this minimum consumption standard.

After a thorough examination, the study group set up by the Planning Commission in July 1962 recommended a standard of private consumption expenditure of Rs 20 (at 1960-61 prices) per capita per month as the bare minimum amount common to both rural and urban areas.

At the initial stage, the Planning Commission accepted the study Group’s poverty criterion. Various researchers like B.S. Minhas and A. Vaidyanathan also made their study on the basis of this definition. But other researchers like Dandekar and Rath, PK. Bardhan and Ahluwalia made their study on the basis of their own definition of poverty.

Later on, the “Task Force on Projections of Minimum Needs and Effective Consumption Demand” offered an alternative definition of poverty which has been adopted by the Planning Commission in recent years.

The Task Force defined the poverty line as the mid-point of the monthly per capita expenditure class which have a daily calorie intake of 2,400 per person in the rural areas and 2,100 in urban areas of the country. Accordingly, the minimum desirable standard was worked out at Rs 76 for the rural areas and Rs 88 for urban areas at 1979-80 prices.

Prof Galbraith once argued “Poverty is the greatest polluter”. There is definitely some logic in this argument. The entire world economy now considers poverty as their great enemy. In India, the problem of poverty is still quite acute. For the last forty-five years, Indian politicians have been holding the expectation and promise of poverty removal believing in the theory of the “trickle down”.

Most of them were of the opinion that the benefits of a high and sustained growth of the economy will eventually take care of bulk of the poor population of the country. But by the end of 1960s, it became quite clear that the benefits of growth could hardly trickle down and institutional reforms adopted in the country were strangled by vested class interests.

Considering this situation, a plethora of poverty alleviation measures were gradually adopted by the beginning of 1970s.

Again in 1987-88, the Planning Commission revised the standard of private consumption expenditure of 15.43 for rural areas and Rs 165.58 for urban areas per capita per month as a bare minimum amount for determining the poverty line. Again in 1999-2000, the same consumption expenditure per capita per month determined on the basis of NSSO data revised to Rs 211.30 for rural areas and Rs 454.11 for urban areas.

The Expert Group under the Chairmanship of Prof. S.D. Tendulkar revised the national poverty line at 2004-05 prices and accordingly the monthly per capita consumption expenditure of Rs 446.68 in rural areas and Rs 578.80 in urban areas in 2004-05.

Again in October, 2011 in response to the quarry of the Supreme Court, the Planning Commission made an attempt to revise the poverty line with the monthly per capita expenditure of Rs 965 for urban areas (Rs 32 per day) and Rs 781 in rural areas 26 per day).

But facing a severe criticism on the above prescription of below poverty line cap from several quarters, the UPA government at the Centre has now decided to revise the expenditure criteria by factoring in the 2009-10 NSSOs report on household expenditure.

The Planning Commission on October 3, 2011 was compelled to announce that a new methodology will be worked out to redefine the poverty line in consistent with the Food Security Bill passed recently by a new Expert Committee.

Planning Commission made another estimate of the poverty line in March 2012 and that was announced in the Parliament on 6th March, 2013. As per the latest available information, the poverty line at all India level for 2009-10 is estimated at monthly per capita consumption expenditure (MPCE) of Rs 673 (Rs 22.40 per day) for rural areas and Rs 860 (Rs 28.65 per day) for urban areas.

After 2004-05, this survey has been conducted in 2009-10.

The Planning Commission has updated this new poverty lines and poverty ratios for the year 2009-10 as per the recommendations of the Tendulkar Committee using NSS 66th Round (2009-10) data from the Household Consumer Expenditure Survey. Thus it has been estimated that the poverty lines at all India level as an MPCE of Rs 673 for rural areas and Rs 860 for urban areas in 2009-10.

Planning Commission made another estimate of poverty line in July 2013 by following the Tendulkar methodology, As per this latest estimate, the poverty line at all India level for 2011-12 is estimated at monthly per capita consumption expenditure (MPCE) of Rs 816 (Rs 27.20 per day) for rural areas and Rs 1,000 (Rs 33.33 per day) for urban areas.

The Planning Commission has updated this new poverty lines and poverty ratios for the year 2011-12. Thus, it has been estimated that poverty lines at all India level as an MPCE of Rs 816 for rural areas and Rs 1000 for urban areas.

Essay # 2. Absolute and Relative Poverty:

Most of the time, the concept of poverty and its discussion is usually confined to absolute poverty. Accordingly, absolute poverty is measured by a pre-determined level of living which families or households should be able to afford. Thus in absolute sense, the concept of poverty is not related to the income and the distribution of consumption expenditure, which is usually done in the measure of relative poverty.

Thus in the measure of absolute poverty, the absolute minimum consumption basket includes consumption of food grains, vegetables, milk products and other important items which are necessary for attaining healthy living along with access to other important non-food items. While doing so, these standards are converted into monetary units to define it as ‘Poverty Line’ .

People whose consumption expenditures are found below this threshold limit are usually considered as poor. For example, the one-dollar consumption expenditure per capita in PPP dollars is the absolute poverty line accepted internationally. This concept of absolute poverty is very much relevant to poor and less developed countries where large scale absolute poverty prevails.

Relative poverty, on the other hand, considers over all distribution of income and the relative position of a household within that distribution pattern. Here in this concept of relative poverty, the relative position of one section of people is compared with another group. This concept of relative poverty can also be extended to other countries to get a comparative estimate of poverty in a relative manner.

In 1871, Dadabhai Naoroji wrote a book entitled “Poverty and Un-British Rule in India” which shows that India was comparatively a very poor country. In 2003, the per capita income of USA was US $ 35,060 and that of United Kingdom was US $ 25,250 and thus UK can be considered as poor as compared to US.

Thus relative poverty is very much associated with the issues of inequality. Here the extent of income or consumption of the last quintile population (poorest) could be compared with the richest quintile showing a wide gap between the two.

In terms of relative poverty the last quintile population would be termed as poor whereas in terms of absolute poverty criterion the same last quintile group may not be termed as poor as they are maintaining the income and consumption bucket above the minimum level that represents poverty line.

If half of the population of the country is maintaining its average income below the per capita income of the country then they can be termed as poor on the relative criterion although they maintain the minimum basket of goods and services to remain above the poverty line. Thus relative poverty looks at the angle of inequality. Thus, the concept of relative poverty is completely different from Absolute poverty.

Essay # 3. Incidence of Poverty in India:

In order to determine the strategy of development of the country, it is quite essential to make an appropriate estimate of incidence of poverty in India. But appropriate and reliable data for the estimation of the extent of poverty is not available in India.

However, on the basis of NSS data on consumption expenditure, various estimates of the extent of poverty have been made by Minhas, Dandekar and Rath, P.K. Bardhan and Ahluwalia. But due to the differences in their concept of poverty, their results vary widely.

Let us now discuss the findings of these estimates:

Estimates of B.S. Minhas:

The study of the extent of poverty made by Minhas covered the period 1956- 57 to 1967-68. Taking the annual per capita minimum expenditure of? 240 as the minimum standard (on the basis on NSS data), he found that the proportion of people below the poverty line declined from 64 per cent in 1956-57 to 50.6 per cent in 1967-68.

Estimates of Dandekar and Rath:

Dandekar and Rath estimated their own standard of poverty line taking 2,250 calories as the desired minimum level of nutrition. They observed “that level of consumer expenditure is desirable which secures a diet adequate at least in terms of calories. In 1960-61, this was Rs 170 per capita per annum for rural households and Rs 271 per capita per annum for urban household”.

Their estimates revealed that in 1968-69 nearly 40 per cent of the rural population (i.e., about 166 million) and over 50 per cent of the urban population (i.e., nearly 49 million) were living below the poverty line.

Total number of persons living below the poverty line also increased from 117 million in 1960-61 to 216 million in 1968- 69, although the proportion of population below the poverty line remained the same at 41 per cent.

Estimates of P.K. Bardhan:

Bardhan advocated a lower standard for estimating the poverty line and thus considered Rs 15 per capita per month at 1960-61 prices for the rural poverty line and Rs 18 for the urban line. On the basis of the NSSO data on consumption expenditure, Bardhan’s study revealed that in 1968-69 about 55 per cent of rural population and 41 per cent of the urban population of the country were lying below the poverty line.

Moreover, Bardhan concluded that the percentage of population below the poverty line rose from 38 per cent in 1960-61 to 55 per cent in 1968-69.

Estimates of M.S. Ahluwalia:

Ahluwalia studied the incidence of poverty in India for the period 1956- 57 to 1973-74. Taking the same concept of poverty line of Rs 15 per month at 1960-61 prices for rural areas and Rs 20 per head per month for urban areas he estimated that 54.1 per cent of the rural population in 1956- 57 was lying below the poverty line.

This extent of poverty declined to 38.9 per cent in 1960-61 and then again rose to 56.5 per cent in 1966-67. He further estimated that in 1973-74, about 46.1 per cent of the rural population was below the poverty line. This revealed that the incidence of poverty in India fluctuated over the years.

Planning Commission’s Estimates of Poverty in India:

In recent years, the Planning Commission has also estimated the incidence of poverty in India taking Rs 77 per capita per month (at 1979-80 prices) as the bare minimum consumption for drawing the poverty line for the rural population.

Later on the Planning Commission revised per capita monthly expenditure for drawing poverty line at Rs 115.43 for rural areas and Rs 165.58 for urban areas in 1987-88. Table 12.1 shows these estimates of incidence of poverty.

These estimates revealed that the proportion of rural population lying below the poverty line declined from 54.1 per cent in 1972-73 to 51.2 per cent in 1977-78 and then it again declined to 40.1 per cent in 1983-84 and 28.37 per cent in 1987-88.

Again the proportion of urban population lying below the poverty line declined from 41.2 per cent in 1972-73 to 38.2 per cent in 1977-78 and then again declined to 28.1 per cent in 1983-84 and then to 16.82 per cent in 1987-88.

Accordingly, these estimates revealed that the percentage of total population below the poverty line declined from 51.5 per cent in 1972-73 to 37.4 per cent in 1983- 84 and then to 25.49 per cent in 1987-88.

Planning Commission Revised estimates of Poverty (1993-94) :

The Planning Commission estimates the incidence of poverty in rural and urban areas of the country using the quinquennial survey data on household consumption expenditure released by the National Sample Survey Organisation (NSSO), coupled with the poverty lines as set out in the Report of the Task Force on Projection of Minimum needs and Effective Consumption Demand, constituted by the Planning Commission in 1979. In view of the recent revisions in the aggregate private consumption expenditure made by CSO and the population data derived from census results, the poverty estimates for 1987-88 have been revised.

Expert Group Estimates, July 1993 :

In view of the methodological issues raised in respect of the estimates on poverty and also poverty alleviation being an objective of economic and social development, the Planning Commission constituted an Expert Group on September 1989 for considering methodology and computational aspects of estimation of proportion and number of poor persons in the country.

While retaining the concept of poverty line as recommended by the Task Force, the Expert Group suggested certain basic changes in the price deflator to update the poverty line for its application in later years. This group suggested use of state specific price indices which can reflect the changes in cost of consumption basket of the people around the poverty line.

It also relied exclusively on the National Sample Survey (NSS) data on consumption expenditure to assess the incidence of poverty without adjusting the NSS Consumption that is obtained from macro-aggregates of the national accounts.

The Expert Group has estimated the percentage of population living below the poverty line under the new estimating pattern, as given in Table 12.2:

The report of the Expert Group which was submitted in July 1993, was subsequently released by the Planning Commission and its recommendations are under consideration. The new estimate has also confirmed a steady decline in proportion of population below the poverty line.

Together with the overall economic growth, the anti-poverty and employment generation programmes have helped in reducing the incidence of poverty over the long run.

Accordingly, the poverty ratio in rural areas declined from 56.4 per cent in 1973- 74 to 45.7 per cent in 1983 and then to 37.3 per cent in 1993-94. Again the poverty ratio in urban areas also declined from 49.0 per cent in 1973-74 to 40.8 per cent in 1983 and then to 32.4 per cent in 1993-94.

Moreover, the poverty ratio of the country as a whole has also declined from 54.9 per cent in 1973-74 to 44.5 per cent in 1983, 38.9 per cent in 1987-88 and then to 36.0 per cent in 1993-94 and finally to 26.1 per cent in 1999-2000 and 24.4 per cent in 2000-01.

In numerical terms, the number of persons living below the poverty line in India increased from 321 million in 1973-74 to 329 million in 1977-78 and then gradually declined to 307 million in 1987-88 and then again increased to 320 million in 1993-94 and then to 260 million in 1999-2000.

Planning Commission estimates on the basis of NSSO Data, 1999-2000 :

Recent estimate of poverty was made by the Planning Commission on the basis of NSSO 55th round data for the year 1999-2000. Some of the key results of the 55th Round of the Household Consumer Expenditure Survey of the National Sample Survey Organisation (NSSO) covering the period July 1999 to June 2000, have now become available showing a very significant decline in poverty.

Accordingly, the rural poverty has declined to 27.1 per cent based on 30-day recall and 24.0 per cent on a 7-day recall methodology. Again the poverty ratio in urban areas has also declined to 23.6 per cent based on 30-day recall and 21.6 per cent on 7-day recall methodology.

Moreover, the poverty ratio of the country as a whole has declined to 26.1 per cent based on 30-day and 23.3 per cent on 7-day recall methodology. These two sets of estimates may not be strictly comparable to the earlier estimates of poverty. Nonetheless, they provide clear evidence indicating a substantial decline in the overall poverty ratio in the country during the 1990s.

As per the recent estimate based on NSSO data, it is observed that in 1999-2000 the country has 260 million population living below the poverty line (BPL); out of which 193 million live in rural areas and 67 million live in urban areas.

Thus the Planning Commission estimate of poverty on the basis of the NSSO 1999-2000 data is the latest official estimates of poverty and non official estimates on poverty are available beyond this data. Economic Surveys for 2003-04 and 2004-05, on the basis of the result of 55th round of NSSO, had indicated that there has been an impressive decline in the incidence of poverty in the 1990s.

However, the extent of the actual decline in the proportion below the poverty line (BPL) between 1993-99 and 1999-2000 has been a subject of an intense debate by academicians because of the change in methodology for collection of basic data in 1999-2000 and possible non-comparability with earlier rounds of the consumer expenditure surveys.

Planning Commission’s Estimates on the basis of NSSO Data, 2004-05 :

Next official estimates of poverty incidence is based on the NSSO 61st round of large-scale sample survey in 2004-05. On the basis of the quinquennial large sample surveys on household consumer expenditure conducted by the National Sample Survey Organisation (NSSO), incidence of poverty is estimated by the Planning Commission for the year 2004-05.

Table 12.2(a) reveals this poverty estimate.

Table 12.2(a) reveals that the Uniform Recall Period (URP) consumption distribution data of NSS 61st Round yields a poverty ratio of 28.3 per cent in rural areas, 25.7 per cent in urban areas and 27.5 per cent for the country as a whole in 2004-05.

The corresponding poverty ratios calculated from the Mixed Recall Period (MRP) consumption distribution data are 21.8 per cent for rural areas, 21.7 per cent for urban areas and 21.8 for the country as a whole.

While the former consumption data (URP) uses 30-day recall/reference period for all items of consumption, the latter (MRP) uses 365-day recall/reference period for five infrequently purchased non-food items, namely, clothing, footwear, durable goods, education and institutional medical expenses and 30-day recall/reference period for remaining items.

The percentage of poor in 2004-05 estimated from URP consumption distribution of NSS 61st Round of consumer expenditure data (27.5 per cent) are comparable with the poverty estimates of 1993-94 (50th Round) which was 36 per cent for the country as a Whole, The percentage of poor in 2004-95 estimated from MRP consumption expenditure of NSS 61st Round of consumer expenditure data (21.8 per cent) are roughly comparable with the poverty estimates of 1999- 2000 (55th Round) which was 26.1 per cent for the country as a whole.

Average per capita consumption expenditure for rural and urban population as per 61st Round (2004- 05) is Rs 558.78 and Rs 1,052.36 respectively. NSSO Data also reveals that rural population on an average spends about 55 per cent of its consumption on food and remaining 45 per cent on non-food items.

Estimates of Poverty Ratio by Tendulkar Committee, 2004-05 :

The above estimate of poverty ratio was prepared by an Expert Group under the Chairmanship of Professor Suresh D. Tendulkar Constituted by the Planning Commission in December 2005, which submitted its report in December 2009. The recomputed poverty estimates for the years 1993-94 and 2004-05 as recommended by the Tendulkar Committee have been accepted by the Planning Commission.

As per the Tendulkar Committee Report, the national poverty line at 2004-05 prices was a monthly per capita consumption expenditure of Rs 446.68 for rural and Rs 578.80 for urban areas in 2004-05. The above estimates of poverty line which refer to the national average, vary from state to state because of price differentials.

It its report, the Tendulkar Committee mentioned that the proposed poverty lines have been validated by checking the adequacy of actual private expenditure per capita near the poverty lines on food, education and health by comparing them with normative expenditures consistent with nutritional, educational and health outcomes.

In order to have a two point comparison of changes in head count ratio, the Expert Group has again re-estimated poverty ratio for 1993-94. The head count poverty ratio for 1993-94 and 2004-05 as released earlier by the Planning Commission on the basis of Lakdawala Methodology and also by using by the Tendulkar Methodology are shown in Table 12.2.(b).

It is observed that as per Lakdawala methodology, the poverty ratio in general in India declined from 36.0 per cent in 1993-94 to 27.5 per cent in 2004-05 showing poverty reduction to the extent of 8.5 per cent.

But as per Tendulkar methodology, the same poverty ratio declined from 45.3 per cent in 1993-94 to 37.2 per cent in 2004-05 showing poverty reduction of 8.1 per cent. However, in respect of both these two methodologies, the extent of poverty reduction is not much different.

Table 12.2(c) shows comparative estimate of the poverty incidence and growth rates in India and some other selected Asian countries.

Table 12.2(c) reveals that although the reduction of the overall poverty ratio in India from 54.9 per cent to 36 per cent during a period of three decades (1973-93) is quite significant, but the performance of poverty alleviation or reduction has been weak as compared to that of some East Asian countries.

While the poverty ratio in India has declined from 54.9 per cent in 1975 to -36.0 per cent in 1995, the same ratio has declined from 59.5 per cent to 22.2 per cent in China, 64.3 per cent to 11.4 per cent in Indonesia, 23.0 per cent to 5.0 per cent in Korea, 17.4 per cent to 4.3 per cent in Malaysia and 8.1 per cent to 0.9 per cent in Thailand during the same period.

It may be observed that the success of some East Asian countries (like China and Indonesia) lies in faster average (GDP) economic growth being 11.1 per cent in China, 6.6 per cent in Indonesia and 8.7 per cent in Korea during 1980-95 period as compared to that of only 5.6 per cent in India.

Moreover, the annual reduction in poverty ratio during the period 1975-95 was 0.9 percentage point in India as compared to that of 1.9 percentage point in China, 2.6 percentage point in Indonesia and 0.7 percentage point in Malaysia.

Planning Commission’s Estimates on the basis of NSSO Data, 2009-10 :

The Planning Commission has updated the poverty lines and poverty ratios for the year 2009-10 as per the recommendations of the Tendulkar Committee using NSS 66th Round (2009-10) data from Household Consumer Expenditure Survey. It has estimated the poverty lines at all India level as an monthly per capita consumption expenditure (MPCE) of Rs 673 for rural areas and Rs 860 for urban areas in 2009-10.

Based on these cut-offs, the percentage of people living below the poverty line in the country has declined from 37.2 per cent in 2004-05 to 29.8 per cent in 2009-10. Even in absolute terms, the number of poor people has fallen by 52.4 million during this period.

Of this 48.1 million are rural poor and 4.3 million are urban poor. Accordingly, the total number of poor in the country has been estimated at 34.47 crore in 2009-10 as against 40.72 crore in 2004-05.

The all India head count ratio (HCR) has declined by 7.3 percentage points from 37.2 per cent in 2004- 05 to 29.8 per cent in 2009-10, with rural poverty declining by 8 percentage points from 41.8 per cent to 33.8 per cent and urban poverty declining by 4.8 percentage point from 25.7 per cent to 20.9 per cent.

The sharp decline in poverty of over 10 percentage points was witnessed in Himachal Pradesh, Madhya Pradesh, Maharashtra, Orissa, Sikkim, Tamil Nadu, Karnataka and Uttarakhand. It is also revealed from the report that the poverty has increased in North-Eastern States of Assam, Meghalaya, Manipur, Mizoram, and Nagaland.

Some of the bigger states such as Bihar, Chhattisgarh and Uttar Pradesh have shown only marginal decline in poverty ratio, particularly in rural areas. These estimates of poverty made by the Planning Commission are based on methodology recommended by the Tendulkar Committee, which includes spending on health and education, besides calorie intake.

It is also observed that poverty has declined on an average by 1,5 percentage points per year between 2004-05 to 2009-10. The annual averages rate of decline during the period 2004-05 to 2009-10 is twice the rate of decline during the period 1993-94 to 2004-05.

Planning Commission’s revised Estimates of Poverty Ratio on the basis of NSSO data, 2011-12:

The Planning Commission’s revised estimates of poverty ratio based on NSSO data, 2011-12 can be seen from the following Table 12.2(d).

The Planning Commission has revised the estimates of poverty lines and poverty ratios for the year 2011-12 following the Tendulkar methodology using the NSS 68th Round (2011-12) data from Household consumer expenditure Survey.

Accordingly, the poverty line at all India level for 2011-12 is estimated at monthly per capita consumption expenditure (MPCE) of 7 816 (Rs 27 per day) for rural areas and Rs 1000 (Rs 33 per day) for urban areas. Based on these cut-offs the proportion of people living below the poverty line in the country has declined from 37.2 per cent in 2004-05 to 21.9 per cent in 2011-12.

In absolute terms there were 26.93 crore people below the poverty line in 2011-12 as compared to 40.72 crore in 2004-05.

However, this current estimate of poverty has triggered controversy among different people. Some groups argue that the poverty ratio of 2011-12 is too low and far from reality. However, the impact of economic growth, agricultural and industrial development and effect of rural uplift and rural employment schemes cannot be totally denied.

Thus it is observed that over a span of seven years the incidence of poverty declined from 37.2 per cent to 21.9 per cent in 2011-12 for the country as a whole, with a sharper decline in the number of rural poor. Table 12.2 (e) shows alternative estimates of poverty in India made by different experts and important bodies and also the criteria for determining such poverty line in the country.

Essay # 4. Recent Poverty Debate in India:

In India, recently, a serious poverty debate is going on which is related to the concept and the measurement of poverty. The current debate centres on the estimation of price deflators, reference period for survey and also for determining the basis of poverty line.

Growth of per capita income over 3 per cent per annual during 1990’s and the increasing divergence in the per capita expenditure reflected in NSSO schedules and the national accounts systems have been cited to point out that the NSSO consumer expenditure surveys has under estimated consumption expenditure.

Accordingly, the incidence of poverty is considered to be overestimated. But, on the other hand, serious debate continued on the incidence of poverty after the release of official estimates of poverty by the Planning Commission for 1999-2000. In this report it is found that between 1993- 94 and 1999-2000, overall poverty in India declined by 10 per cent and in rural areas by more than 10 per cent.

On this matter many scholars have questioned about the comparability of the 1993-94 and 1999-2000 estimates due to the changes in the method of data collection. They observed that the incidence of poverty has been under estimated through over-reporting of expenditure by the surveyed households due to changes in the survey design.

Two subsequent studies made by Sundaram and Tendulkar (2003) and Sen and Himangshu (2003) argued that such decline in the incidence of poverty between 1993-94 and 1999-2000 would be in the range 7 per cent to 4.5 per cent respectively as compared to that to 10 per cent estimated officially earlier.

Essay # 5. Poverty Differential among Different States in India :

A high degree of poverty differentials among the various states of India has been continuing from the very beginning. Although various measures were undertaken since the inception of planning for the eradication of poverty throughout the country and some degree of success has also been attained in reducing the poverty ratio in general among all the states but the high degree of poverty differentials still persist among different states of the country.

State-wise poverty ratios have witnessed a secular decline from 1973-74 to 2004-05. The poverty is estimated from the state-specific poverty lines and the distribution of persons by expenditure groups obtained from the NSS data on consumption expenditure.

It is observed that though poverty has declined at the macro level, rural-urban and inter-state disparities at the poverty ratio are clearly visible. The state specific poverty ratios at the national and state levels and the poverty differentials among different states from 1973-74 to 2004-05 can be seen from Table 12.3.

Table 12.3 reveals the poverty ratio of different states. It is observed that the poverty ratio both at the rural and urban level in different states has declined considerably but still a high degree of poverty differentials still exist between backward and relatively developed states of the country leading to mounting regional disparities.

The rural poverty ratio of relatively backward states in 1973-74 which were 67.28 per cent in Orissa, 62.99 per cent in Bihar, 62.66 per cent in Madhya Pradesh and 52.67 per cent in Assam, gradually declined to 60.80 per cent in Orissa, 55.70 per cent in Bihar, 53.60 per cent in Madhya Pradesh and 36.40 per cent in Assam in 2004-05.

But the present poverty ratios of backward states are still very high as compared to that of relatively developed states like Punjab (22.1 per cent), Gujarat (39.10 per cent) and Kerala (20.2 per cent).

Thus, the rural poverty ratio is still relatively high in Orissa, Bihar and North Eastern states. In Orissa, Madhya Pradesh, Bihar and Uttar Pradesh, the urban poverty ratios were in the range of 35.1 to 43.7 per cent in 2004-2005.

But the combined poverty ratio of the backward states during the period 1973-74 to 2004-05 gradually declined from 66.18 per cent to 57.2 per cent in Orissa, 61.91 per cent to 54.4 per cent in Bihar, 61.78 per cent to 48.6 per cent in Madhya Pradesh and 51.21 per cent to 34.4 per cent in Assam. But the performance of few other states in this regard has been found quite satisfactory.

The combined poverty ratio of states like Kerala, West Bengal, Tamil Nadu and Uttar Pradesh which were 59.79, 63.43, 54.94 and 57.07 in 1973-74 respectively, gradually declined substantially to 19.70, 34.3, 28.9 and 40.9 respectively.

Thus, there has been a significant reduction in poverty ratio during the period in Kerala, Jammu and Kashmir, Goa, Lakshadweep, Delhi, Andhra Pradesh, Gujarat, Tamil Nadu, Karnataka, West Bengal and Andaman and Nicobar Islands.

Thus, while some states such as Punjab and Haryana have succeeded in reducing poverty by following the path of modernisation of agriculture and high agricultural growth, others have focused on particular areas of development, e.g., Kerala has focused on human resource development, West Bengal on vigorous implementation of land reform measures and empowerment of Panchayats and Andhra Pradesh on direct public intervention in the form of public distribution of food grains.

The Approach Paper of the Tenth Plan also recorded the projections of poverty level at the end of Tenth Plan prepared by the plan panel. As per this projection, it is found that if macro-economic and sectoral projections for the Tenth Plan (2002-07) are achieved, the poverty ratio in India should fall to 19.2 per cent by the end of plan period.

While the urban poverty ratio is expected to drop to 14.6 per cent, rural poverty ratio is also projected to fall to 21.0 per cent. The poverty projections further show that 90 per cent of the poor will be concentrated in eight states, such as Bihar, Madhya Pradesh, Orissa, Uttar Pradesh, West Bengal, Assam, Maharashtra and Rajasthan.

All India GDP growth targets of more than 8.0 per cent accompanied by high agricultural growth in Haryana, Himachal Pradesh, Goa, Gujarat, Punjab and Delhi should make the poverty levels negligible in these states. Keeping in mind the migration factor from relatively poorer states to the prosperous ones, it has projected a poverty level of 2.0 per cent in these states by 2007.

Poverty Differentials of Different States as per Planning Commission Estimate on the Basis of NSSO Data, 1999-2000 and 2004-05 :

As per the estimate made by the Planning Commission on the basis of NSSO data, 1999-2000, the poverty differentials among the different states of the country still persist at a wide level.

Orissa has the dubious distinction of having the maximum percentage of BPL population (47.15 per cent) while the Jammu and Kashmir has the least number of such population, i.e., 3.48 per cent. Besides Orissa, the only Other State with over 40 per cent BPL population is Bihar, in which 42.6 per cent of the total population is living below the poverty line (BPL).

The states with more than 30 per cent BPL population are Uttar Pradesh (31.15 per cent), Arunachal Pradesh (33.47 per cent), Assam (36.09 per cent), Madhya Pradesh (37.43 per cent), Nagaland (32.67 per cent), Sikkim (36.65 per cent) and Tripura (34.44 per cent).

Other states with below 10 per cent BPL population are Goa (4.4 per cent), Jammu and Kashmir (3.48 per cent), Himachal Pradesh (7.63 per cent), Haryana (8.74 per cent), Punjab (6.16 per cent), Chandigarh (5.75 per cent), Daman and Diu (4.44 per cent) and Delhi (8.23 per cent).

However in absolute terms, Uttar Pradesh has the highest number of those living below the poverty line at 52.98 million while Daman and Diu has just 6,000 BPL population.

Among those states with more than 10 million BPL population include—Andhra Pradesh (11.9 million or 15.77 per cent), Karnataka (10.44 per cent); Maharashtra (22.79 million or 25.02 per cent), Orissa (16.9 million or 47.15 per cent), Tamil Nadu (13.04 million or 21.12 per cent) and West Bengal (21.34 million or 27.02 per cent).

Thus wide inter-state disparities are visible in the poverty ratios between rural and urban areas as also in the rates of decline of poverty. Among major states like Orissa, Bihar, West Bengal and Tamil Nadu, more than 50 per cent of their population lived below the poverty line in 1983.

By 1999-2000, while Tamil Nadu and West Bengal had reduced their poverty ratio by nearly half, Orissa and Bihar continued to be the two poorest states with poverty ratios of 47 and 43 per cent respectively. In 1999-2000, 20 states and Union Territories had poverty ratios which were less than the national average.

Among other states, Jammu and Kashmir, Haryana, Gujarat, Punjab, Andhra Pradesh, Maharashtra and Karnataka also succeeded significantly in reducing the incidence of poverty.

Poverty Differentials of Different States as per Planning Commission Estimate on the Basis of NSSO Data, 2004-05:

As per the recent estimate made by the Planning Commission on the basis of NSSO data 2004-05, the poverty differentials among different states of the country still persists at a wide leve.

Among the states, orissa has again the dubious distinction of having maximum percentage of BPL population (52.2 per cent), followed by Bihar (54.4 per cent), which Kerela has the lowest poverty ratio of 19.7 per cent in 2004-05.

The states with more than 30 per cent BPL population as 2004-05 estimates are Madhya Pradesh (48.6 per cent), Uttar Pradesh (40.9 per cent), Maharashtra (38.1 per cent), Assam and Rajasthan (34.4 per cent), West Bengal (34.3 per cent), Karnataka (33.4 per cent) and Gujarat (31.8 per cent).

The states with below 30 per cent BPL population includes-Tamil Nadu (28.9 per cent) , Himachal Pradesh (24.1 per cent), Haryana (22.9 per cent), Andhra Pradesh (29.9 per cent), Punjab (20.9 per cent), and Kerela 19.7 per cent.

Thus there remains wide poverty differentials among the different states of India as per 2004-05 estimates.

This situation underscores the need for rapid growth of output and employment coupled with strengthening of the special programmes of poverty alleviation and employment generation. Thus this problem of poverty has to be dealt in the framework of the strategy of development laying emphasis on those sectors whose growth makes a significant impact on the income level of the underemployed.

Thus the findings of the study made by Minhas, Dandekar and Rath, Bardhan and others revealed that most of the people living below the poverty line belonging to landless agricultural labour households with small holdings, land-less non-agricultural rural labour households and small land operators with les than 1 hectare of land holdings.

Accordingly, Danekar and Rath observed tha, “The urban poor are only an overflow of the rural p[oor into the urban area. Fundamentally, they belong to the same class as the rural poor. However, as they live long enough in urban poverty, they acquire characteristics of their own. Little is known of their and labour in the growing cities.”

Thus the problem of poverty in India is quite chronic. Inspite of 4 decardes of planning, the problem of poverty is still persisting in the country.

Thus Amartya Sen rightly observed, “The poor is not an economic class, nor convenient category to use for analysing social and economic movements. Poverty is the common outcome of variety of desperate economic circumstances and a policy to tackle poverty must, of necessity, go beyond the concept of poverty. The need of discrimination is essential.”……. “ It is not sufficient to know how many poor people there are, but how exactly poor they are.”

Essay # 6. Poverty Alleviation Programmes:

Although the problem of poverty has been persisting in India since the inception of planning but the serious programmes for the alleviation of poverty were introduced only in recent years. Poverty alleviation was accepted as one of the major objectives of planning since the Fifth Plan.

It is only during the 1970s the programmes like Small Farmer’s Development Agency (SFDA), Marginal Farmers and Agricultural Labourers Development Agency (MFAL), Drought Prone Areas Programme (DPAP), Crash Scheme for Rural Employment (CSRE) and Food for Work Programme (FWP) were introduced for benefitting the rural poor. Later on, the Integrated Rural Development Programme (IRDP) was introduced in 1978-79.

In order to provide wage employment to the rural poor, the National Rural Employment Programme (NREP) and the Rural Landless Employment Guarantee Programme (RLEGP) were introduced during the Sixth Plan. Later on, on April 1, 1989, NREP and RLEGP were merged into a single wage employment programme under Jawahar Rozgar Yojana (JRY).

IRDP is also being implemented by the Government since 1980 as a major instrument of its strategy to alleviate rural poverty. The objective of the programme is to assist poor families in developing skills and inputs to overcome their poverty. So far 41.3 million families have been assisted with a total investment of Rs 19,318 crore. The level of investment per family at the end of March 1993 was Rs 7,141.

Concurrent evaluation of IRDP carried out by the Ministry of Rural Areas and Employment reveals that as many as 16 per cent of families assisted under IRDP were able to cross the poverty line of Rs 6,400 during 1989. Again as per preliminary results of concurrent evaluation of IRDP carried out during September 1992 to February 1993, about 50 per cent of assisted families could cross the poverty line of Rs 6,400

During the Eighth Plan 18 million families were assisted under IRDP with plan provision of Rs 3,350 crore. At the end of March 1993, about 21 lakh families living below the poverty / line were given income generating assets with a mixture of credit and subsidy.

Moreover, providing skills to rural youth belonging to families below poverty line and also to enable them to take up self or wage employment, the Training of Rural Youth for self Employment (TRYSEM) was introduced in August 1979.

A total of 26.6 lakh youths and 11.3 lakh women so far have been trained under this scheme, out of which 15.6 lakh youths have been fully employed. In 1992-93 and 1993-94 about 2.8 lakh and 3.04 lakh youths respectively were trained under TRYSEM and under JRY, about 7,821 lakh and 10,237 lakh man-days of employment respectively were generated.

During the first four years of the Eighth Plan (1992-93 to 1995-96), total number of youths trained was 11.47 lakh as against its target of 13.18 lakh and total number of man-days of employment generated under JRY was 365.54 crore as against its target of 362.86 crore. Again during the first four years of the Eighth Plan, total number of IRDP families assisted was 89.13 lakh as against its target of 65.6 lakh.

Family Credit Plan (FCP) is also a useful device to ensure higher investment for a beneficiary family under IRDP to enable the family to cross the poverty line. Under IRDP, all families in rural areas below the poverty line are eligible for assistance.

In 1993-94, two new programmes, namely the Employment Assurance Schemes (EAS) and the Prime Minister’s Rozgar Yojana (PMRY) were introduced. The EAS is now implemented in 3,175 backward blocks in the country. It aims at providing 100 days of unskilled manual work up to two members of a family in the age group of 18 to 60 years normally residing in villages within the blocks covered under EAS.

It is a need based programme hence no target of employment generation has been fixed. Under EAS/SGRY, total man- days of employment generated in 1993-94 was 494.94 lakh, 4,165.3 lakh in 1998-99, 8,223 lakh in 2004- 2005. Under PMRY, total employment generated in 1993-94 was 0.45 lakh and in 1994-95 was 2.83 lakh, in 2003-2004 was 1.8 lakh as against the target of 3.00 lakh.

The Economic Survey, 2002-03 in this connection observed, “The success of anti-poverty strategy is reflected in the decline in the combined poverty ratio from 54.9 per cent in 1973-74 to 36.0 per cent in 1993- 94. The poverty ratio declined by nearly 10 percentage points in the 5 year period between 1993-94 to reach 26.1 per cent in 1999-2000. While tile proportion of poor in the rural areas declined from 56.4 per cent in 1973-74 to 27.1 per cent in 1999-00, the decline in urban areas has been from 49 per cent to 23.6 per cent during this period. In absolute terms, the number of poor declined to 260 million in 1999-00 with about 75 per cent of these being in the rural areas.”

National Social Assistance Programme (NSAP) :

The National Social Assistance Programme (NSAP) was announced on 15th August 1995 for providing succor to the aged and families below the poverty line. The NSAP for the poor encompasses old age pension, family benefit in case of the death of the bread-winner and maternity benefits.

The NSAP is a centrally sponsored programme with 100 per cent central funding and it is intended to ensure that social protection to the beneficiaries throughout the country is uniformly available without interruption.

The NSAP consists of the following three components:

(a) National Old Age Pension Scheme (NOAPS):

Providing a pension of Rs 75 per month to destitute and to person above 65 years of age living below the poverty line. This was expected to benefit 54 lakh people. In 2006-07, Rs 2,800 crore was allocated for the scheme.

(b) National Family Benefit Scheme (NFBS):

This scheme makes provision for lump-sum survivor benefit on the death of the primary bread winner in poor households of Rs 10,000 in the case of accidental death and Rs 5,000 in the case of death from unnatural causes. This scheme was expected to benefit 4.5 lakh families a year.

(c) National Maternity Benefit Scheme (NMBS):

This scheme provides maternity benefit of Rs 300 for expectant mothers per pregnancy up to the first two live births. This scheme was expected to benefit 46 lakh women each year. This programme involves an expenditure of Rs 867 crore in full year. An outlay of Rs 515 crore was provided during 1995-96 and a sum of Rs 725 crore was provided for the above three components of NSAP in 1999-2000 budget.

Targets of Tenth Plan :

Apart from an indicative target of an 8 per cent average GDP growth rate, specific monitor able targets of key indicators have been finalised for the Tenth Plan (2002-07) and beyond. One of these pertains to the reduction in poverty ratio by five percentage points by 2007 by 15 percentage points by 2012.

The poverty reduction target set by the Planning Commission for the Tenth Five Year Plan aimed at achieving a poverty ratio of 19.3 per cent for the country as a whole by 2007, 21.1 per cent for the rural and 15.1 per cent for the urban areas.

Critical Evaluation of Poverty Alleviation Programmes :

But all- these poverty alleviation programmes did not yield the desired result due to some of its shortcomings. These were:

(a) Allocation of funds and determination of targets were made without considering the size of the population and incidence of poverty leading to wrong identification of families;

(b) The selection of schemes was also not done in a rational manner;

(c) Poverty alleviation programmes failed to recognise importance of increased flow of social inputs through nutrition, family welfare, social security;

(d) This programme neglected the disabled, sick and socially handicapped persons;

(e) The present approach was almost blind about the existence of secondary poverty;

(f) The present poverty line crossing criterion for evaluation the income changes occurring below poverty line;

(g) The poverty alleviation programmes ignored the consequences of the earning activities of the poor people in terms of occupational health hazards and adverse ecological factors.

The Government is seriously reviewing its rural anti-poverty programmes in the light of lapses noticed and in the context of formulating the current five year plan. The Planning Commission has constituted a steering Group and six other groups to look into “poverty alleviation and area development programmes in rural India.”

So far, scrutiny of the working of the two major programmes—Integrated Rural Development programme (IRDP) and Jawahar Rozgar Yojana (JRY) has thrown up some major areas of concern. While on the positive side, under the IRDP scheme, beneficiaries were selectively chosen for assistance so as not to leave out the really needy.

On the flip side, it has been observed that a second dose of assistance given to beneficiaries was very low. Only 2.38 per cent of the total old beneficiaries were given a second dose, while new beneficiaries received less than 2.16 per cent assistance, implying enough attention has not been paid to providing subsequent doses of assistance to eligible families.

Moreover, the poverty alleviation schemes being administered by the banks must be evaluated and reviewed to ensure that benefits reach the intended target group. There is an urgent need to restructure the existing poverty alleviation schemes for focused and effective implementation as a large number of schemes were being implemented which resulted in “loss of focus”.

There is the need to compress the total number of schemes into two categories, i.e., those which generate employment and those which create assets for the benefit of the community.

Although the poverty alleviation programmes have four major objectives, i.e., generation of employment, creation of assets for community benefit, improvement of productivity and raising the general living standards of the people below the poverty line, but the thrust of all these schemes should be to create assets which directly benefit a large number of people.

Measures to be Adopted :

Success of poverty alleviation programmes not only depends on launching of wage employment and self-employment programmes but it also depends on the improvement of land relations in favour of the cultivators and redistribution of income in favour of the rural poor.

Thus the Approach paper of the Fifth Plan rightly observed that “Employment is the surest way to enable the vast numbers, living below the poverty level, to rise above it. Conventional fiscal measures for redistribution of income cannot by themselves make a significant impact on the problem.”

Thus in order to remove poverty steps must also be taken in the following directions:

(i) To impose ceiling on land and redistribution of ceiling—surplus land among the landless, small and marginal farmers.

(ii) To make provision for proper security of tenure for the tenant cultivators and share-croppers.

(iii) To provide employment to huge number of landless unemployed workers by developing agro-based small scale industries in the wage goods sector.

(iv) To take necessary steps for the reclamation of land and to arrange irrigation facilities for dry lands.

(v) To provide minimum amenities of life in rural areas and also in urban slum areas through Minimum Needs Programme.

(vi) To develop growth centres in order to run various projects like animal husbandry, dairy, fishing, poultry farming, farm forestry etc.

(vii) To ensure that rural development programmes like IRDP, JRY are redressed properly so that they can generate sufficient wage employment and self-employment opportunities to the rural poor. But the present contract system followed for the implementation of these programmes should be stopped and proper institutional framework should be provided so that rural workers can engage themselves with much vigour and responsibility.

Professor Sukhamoy Chakraborty rightly observed that “The solution to the problem of rural poverty will require that small farmers must also be given access to land-augmenting innovation along with a programme of well-conceived public works………………….. many of the specific tasks will need to be done on a decentralised basis.”

In order to implement these measures effectively, it will require a strong political will on the part of the government and active participation of the people with growing consciousness about their rights and responsibilities.

It can be observed further that India must sustain eight (8) per cent growth rate and aim for attaining nine (9) per cent growth rate as otherwise it would not be able to eradicate poverty.

The World Bank report entitled, “India : Achievements and Challenges in Reducing Poverty”, recently observed that the poverty level in India could go down from the current level of about 35 per cent to just 6.3 per cent by the year 2005 if the economy maintains its growth and income distribution levels.

The report further observed, “this would be a tremendous achievement for a country which is home to the largest concentration of poor in the world.”

The Bank noted that Indian economy has grown on an average by six per cent to seven per cent over the past few years. A senior World Bank economist Mr. Zoubida Allaoua, the principal author of the report said, “India has made substantial gains against widespread deprivation over the past 50 years.”

The Bank opined that the Indian Government should push for more growth so as to eradicate poverty within the least possible time.

Prime Minister’s Economic Advisory Council Chairman Mr. C. Rangarajan, while delivering a foundation day lecture at centre for Economic and Social Studies on 22nd February, 2014 observed that pro-poor policies by the government must be aimed at growth in the long run and also ensure flow of investments in the sectors working for poor.

Mr. Rangarajan also advocated public-private partnership model for delivery of social services such as health and education. He further observed that the design of policies has, therefore, to perform delicate balancing act. The pro-poor policies are necessary as they are to widen the opportunities and capabilities of the poor, must be so fashioned as to promote growth in the long run.

Pro-Poor policies should include not only income transfers which by their nature have to be limited, but also flow of investment to sectors and areas where poor work and live. Rural development including agriculture growth thus assumes major importance.

On the delivery of social services, he further argued that the delivery channel need not necessarily be through government administrative mechanism.

“Public-private partnerships in the delivery of these services need to be explored. Which taking advantage of superior administrative efficiency of private institutions, the larger public goals should not be sacrificed. Public-private partnership mode of delivery can thus supplement the direct delivery of services through government institutions.”

Such a model has proved to be a success in India in the case of AIDS programme where non-governmental organisations have played an extremely important role. Thus, one should try to realise seriously that social development and economic growth are not necessarily the same and thus different approaches need to be adopted for such programmes.

Essay # 7. Economic Reforms and Poverty Eradication Programme:

Alleviation of poverty has been considered as an important element in the economic policy of the country since its inception.

To meet the objective of poverty alleviation of a part of our adjustment process under economic reforms, the Government has allocated a higher amount of outlays on elementary education, rural drinking water supply assistance to small and marginal farmers, programmes for the welfare of scheduled castes and scheduled tribes and other weaker sections of the society, programme for women and children and also on infrastructure and employment generation projects.

Effective implementation of grass-root level development programmes requires designing of alternative strategies to empower people to help themselves. The, then Finance Minister, Dr. Manmohan Singh was of the view that mere increasing of expenditure on social sectors and rural development, as has been done in the Eighth Plan, was not sufficient to eradicate poverty.

Designing of alternative strategies was necessary since economic reforms and the government efforts to remove poverty are primarily based on self-help.

In recent times, some experts as well as voluntary agencies have expressed concern that Government’s pre-occupation with economic growth may hamper social welfare, including the health sector. But there is need for better appreciation of this alternative approach on this issue.

Dr. Singh during his address to various forums, internationally and within the country, had himself stated that there were several areas of concern about effective implementation of grassroots development programmes. These involved active participation of the people in the design and implementation of rural development schemes.

Dr. Singh observed recently, “People at all times have to beat the centre of our concern and when we talk about people, our priority has to be the poorest among them. When we talk of encouraging private investment, we are under no illusion that the private entrepreneurs would go to the remote, far-flung or the poorest areas of our country to build schools, hospitals, roads or build drinking water facilities. What we are doing is to throw open certain sectors to private entrepreneurship so that the sources of the State that are released may be diverted to meeting the more basic human needs of the people.”

‘The emphasis is to use market forces where they can be productive enough to yield better results. At the same time, strengthening of the role of the State is sought in those areas where market forces cannot be relied upon to achieve social and economic objectives.

In the medium term, a high growth rate of six to seven per cent is needed to create enough job opportunities for all the new entrants to the labour force. Resources required for meeting the needs of the poorest and improving outlays on poverty alleviation can be mobilised only when the required growth momentum has been built up.

But the Government cannot depend on growth itself to trickle down speedily to the poor. Hence, there is need for more direct attack on the problem of mass poverty.

First and foremost, it is sought to make the whole growth process more labour-intensive. Expansion of exports which are labour-intensive, relies on the country’s endowment of skills and natural resources, will open up new employment opportunities.

Leading French economist, Mr. Guy Sorman, while delivering a lecture on “Development and civilization: is economic liberalization the right solution for India?” observed recently (February, 1995) that liberalization must be accompanied by policies to remove poverty for it to be successful in India.

He said, “Liberalization is fine but is not enough” …………… “Liberalization process would take years to percolate down to the grass roots and people would have not have patience to wait that long.”

He further said that unless the Government spent its surplus on redistribution of resources, including public distribution, drinking water, basic education and health care, the whole process could go away. Of late, there has been wide ranging controversy about the impact of economic reforms on the poor.

One set of experts are alleging that the reforms have accentuated destitution and widened disparities and others are maintaining that such negative situations, if any, are purely coincidental and having little correlation with the new policy measures.

This sort of controversy was sparked off when a recent study of economic reforms and their impact on the poor people revealed that rural poverty in India rose sharply in recent years. The study conducted by Prof. S.P. Gupta revealed that the population living below the poverty line steadily rose from 39.0 per cent in 1988- 89 to 40.69 per cent during July-December 1992.

Findings of Prof. Gupta’s study came as a great deal of embarrassment to the Government, Economic Survey (1995-96) continued to record the official figure of poverty ratio from 25.49 per cent in 1987-88 to 18.96 per cent in 1993-94. But the Planning Commission did not prepare the estimates of poverty on the basis of 47th and 48th rounds of N.S.S.

Findings of Prof. Gupta were also corroborated by two eminent economists, Prof. S.D. Tendulkar and Prof. L.R. Jain. Tendulkar and lain, in their study reported that rural poverty increased from per cm in July 1990-June 1991 to 42.06 per cent in July-December 1991 and then to 48.07 per cent during January- December 1992.

Moreover, the UNDP estimates of poverty also revealed that the percentage of population lying below the poverty line was 40 per cent in 1992. The above evidence on trends in rural poverty have added a new dimension to the debate on economic reform process in India.

While the critics argued that economic reforms have accentuated the marginalization of the poorer people in the rural areas, the proponents of economic reforms and new economic policy changes argued alternatively to defend the reforms.

For example, the critics pointed out that average monthly per capita consumption of cereals declined from 14.4 kgs in 1987-88 to 13.5 kg in 1992. Data available from Sample Registration System (SRS) were also cited to show that the crude death rate of population has started to go up in the early 1990s both in urban as well as in rural areas.

But the defenders of the new economic policy have utilised the NSS data on consumption of square meals. The percentage of rural households having two square meals a day increased from 88.3 per cent in 1990-91 to 92.3 per cent in 1992.

Accordingly, they argued that people were being fed better and this did not get reflected in the consumption of cereals as more and more people were switching over to the consumption of non-cereal food items to meet their caloric requirements.

Whatever may be argument in favour or against the impact of economic reforms on poverty, there is one point which is quite striking. During the 1980s, there was a consistent decline in the proportion of people living below the poverty line.

The official estimates showed that there was a considerable fall in the poverty ratio from 48.3 per cent in 1977-78 to 37.4 per cent in 1983-84 and 25.5 per cent in 1987-88. Again the expert Group’s corresponding figures depicted the poverty ratio at 51.8 per cent, 44.8 per cent and 39.3 per cent respectively during the same years.

Main point that arises here is that whether this regressive trend has any correlation with the ongoing economic reforms. In this connection, Tendulkar and Jain argued that the new economic policy changes have not directly contributed any increase in rural poverty, though they have admitted that there has been fiscal compression induced squeeze in anti-poverty spending which was directly related to reforms.

“In fact if one considers outlays under the IRDP, this decline from Rs 809.49 crore in 1990-91 to Rs 773.09 crore in 1991-92 and Rs 662.22 crore in 1992-93, as a result there was a sharp decline in the number of beneficiary families from 28.98 lakh to 25.37 lakh and 20.69 lakh over the same period.”

Considering this criticism, the outlay on IRDP was nearly doubled in 1993-94 to Rs 1,093 crore and thereby 25.39 lakh families were assisted by this programme. But in 1994-95 this programme could assist only 21.82 lakh families and during the first eight months of 1995-96, the number of assisted families under the IRDP was only 9.01 lakh families.

Another important point raised by Tendulkar and Jain is that there has been the possible erosion of purchasing power of the poor due to rising trend in the prices of food observed during 1990s.

Although the economic reform measures cannot be said to be solely responsible for such event but there are sufficient reasons to believe that strong linkages exist between the availability of food grains, PDS off take, food grains prices and poverty ratio. In spite of consistent rise in food grains production, most of this increased production has been channelized to fill up the buffer stock of the Government.

The stocks of food grains have not been offloaded from the PDS outlets as the issue prices have more or less similar to the open market prices. This like issue prices is mostly related to the government’s policy of raising the procurement prices frequently for compensating the farmers against cuts in fertilizer subsidy.

Although in the pre-reform period, the Government tried to bridge the widening gap between procurement price and issue price through allotment of food subsidies, but the present policy of adopting fiscal austerity also forces the government to reduce the gap through the like of issue prices.

Thus the fiscal compression- induced cuts in outlay for the social sector have indicated that economic reforms have started to exert adverse impact on poverty.

The Government has revamped programme for raising the incomes of the people living below the poverty line, particularly in rural areas and the public distribution system has been extended to the most backward block for supply of essential articles of mass consumption to provide a measure of protection to the poor against inflation.

The liberalisation programme has helped agriculture. Besides, as excessively high protection to industry comes down, the relative profitability of agriculture improved. Impediments to trade in farm products were removed. New incentives have given boost to farm exports, The rising trend in agro, horticulture, aquaculture and other exports has generated new employment opportunities in the rural sector.

Moreover, an adequate flow of institutional rural credit to agriculture is vital for the development of the rural sector and this flow at present is very low in relation to need. Thus considering the situation, several new schemes for social uplift and poverty alleviation were launched by the Government during the recent years of economic reforms.

These included:

(a) Employment Assurance Scheme for providing 100 days of unskilled manual labour to the rural poor, in the 2,475 backward blocks including those that are flood prone in the country;

(b) Prime Minister’s Rozgar Yojana aimed at providing employment to unemployed youth through the creation of micro-enterprises;

(c) National Social Assistance Programme which encompasses old age pension, family benefits in case of death of the bread earner and maternity benefits;

(d) Rural Group Life Insurance Scheme, with a subsidized premium;

(e) National Programme of Nutritional support to Primary education (also known as Mid-Day Meal scheme) aimed at providing a nutritious meal to children in primary school;

(f) Mahila Smridhi Yojana aimed to promote the saving habit among rural women; and

(g) Indira Mahila Yojana aimed at more effective empowerment of women.

Moreover, the nation-wide Public Distribution system for food grains and other essential commodities has since been strengthened, with the revamped PDS now operating in 1,775 backward blocks and expected to be extended to all 2446 blocks under the Employment Assurance Scheme.

The World Bank in its publication titled “IDA in action 1993-1996” observed in this connection that though there are still too many poor people in India, but the country has achieved “significant progress” in poverty eradication, “India’s performance in reducing poverty has been modest compared to some countries in east Asia, for example Indonesia and Thailand.”

Thus, to achieve success in the poverty eradication programmes along with the economic reforms introduced in the country, alternative strategies for empowering the people to help themselves are to be designed.

A mere increase in the amount of expenditure on social sectors and rural development will not be sufficient to eradicate poverty rather a change in strategy in the direction along with sincere and active participation of the people in the design and implementation of rural development schemes etc. are needed the most.

Essay # 8. World Bank’s New Perception of Poverty:

The World Development Report (WDR), 2000-2001 released by the World Bank on 14th September, 2000 in Washington provided a new perception to poverty with an agenda sensitive to the needs of attacking poverty by promoting opportunities, facilitating empowerment and furthering security.

The report also mentioned about two new initiatives—a highly enhanced poor countries debt relief initiative and a comprehensive development framework.

The report sought to expand the understanding of poverty and its causes, while building on the Bank’s past strategy, drew heavily from the South-Asian experiences and Dr. Amartya Sen’s ideas of empowering the poor. The report admits that poverty remained a persisting dilemma and belied the improvement in human conditions with global wealth, global connections and technological capabilities.

The report observed that of the World’s 6 billion people, 2.8 billion lived on less than $ 2 a day and 1, 2 billion live on less than $ 1 a day with 44 per cent of the deprived ones living in South Asia alone.

Exacerbating the crisis of poverty is an overwhelming concentration of conflicts in poor countries, widening gaps between the rich and the poor countries leading to increasing worldwide income disparity and failure of reform programmes to deliver according to the expectations.

The scope of the report has substantially broadened perception of poverty, having drawn from the first- ever “Voices of the Poor” study based on experiences narrated by more than 60,000 poor women and men in 60 countries.

The experiences so gained dictated the World Development Report’s shift of emphasis in its approach to tackle poverty from the over-reaching emphasis of the 1950s on large investments in physical capital and infrastructure to the 1970s on health and education, the 1980s on economic management and the 1990s’ stress on governance and institutions.

The report proposed opening of opportunities by improving access to financial markets for the poor, raising resources and making public spending pro-poor by reducing military spending. Empowerment moved away from its perception of a solely economic process to an outcome of interaction of economic, social and political forces, and had to be achieved by making state institutions more responsive to the needs of people.

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• Suggestions for Removal of Poverty from India
• Income Distribution in India: Pattern and Inequalities
• Main Causes of Poverty in India
• Problem of Poverty in India and Remedies to Eradicate It

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Essay on Poverty in india 100, 200, 300, 500 words

Essay on poverty in india.

Essay on Poverty in India : Poverty is one of the major challenges that India has been grappling with for many decades. Despite the significant economic growth that India has seen in recent years, a large proportion of its population continues to live in abject poverty. Poverty is not just an economic issue but a social and cultural issue which affects the lives of people in many ways. In this essay, we will examine the causes and consequences of poverty in India and some of the measures taken to remove it.

1. lack of access to basic resources

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Poverty in India is a complex issue for many reasons. One of the primary causes of poverty is lack of access to basic resources such as food, clean water, health care, and education. India is a country with a high population density, and a large proportion of its population lives in rural areas where access to these basic resources is limited. Additionally, India has a high rate of illiteracy and unemployment, which further adds to the problem of poverty.

Another important reason for poverty in India is the unequal distribution of wealth. A small fraction of the population has access to wealth and resources, while a vast majority live in poverty. This inequality is mainly due to historical and social factors that have led to the concentration of wealth and power in the hands of a few.

The consequences of poverty in India are serious and far-reaching. Poverty leads to malnutrition, disease and premature death, especially among children. It also results in lack of access to education, which perpetuates the cycle of poverty. Poverty also leads to social exclusion and discrimination, which further marginalises vulnerable communities.

To overcome the issue of poverty in India, the government has implemented several measures. One of the most important measures is the Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA), which guarantees 100 days of employment to rural households. The government has also implemented various poverty alleviation programs such as the National Rural Livelihoods Mission (NRLM), Pradhan Mantri Gram Sadak Yojana (PMGSY) and Pradhan Mantri Jan Dhan Yojana (PMJDY).

However, despite these measures, poverty remains a significant challenge in India. More investment is needed in basic resources such as education, health care and infrastructure. The government needs to address the issue of income inequality by implementing policies that promote equitable distribution of resources. Additionally, greater awareness and social action is needed to address the cultural and social factors that perpetuate poverty.

Conclusion : poverty in India is a complex and multidimensional issue that requires concerted efforts from all stakeholders. While the government has taken several measures to address poverty, more investment is needed in basic resources and policies that promote equitable distribution of wealth. Additionally, greater awareness and social action is needed to address the cultural and social factors that perpetuate poverty. Only through a concerted effort can India tackle the issue of poverty and achieve a more equitable and just society.

Definitely! Poverty in India is a vast and multidimensional problem affecting various aspects of people’s lives. Here are some additional facts and information on poverty in India:

1.Poverty rate: According to the World Bank, more than 134 million people in India live below the poverty line, which is defined as living on less than $1.90 per day. The poverty rate in India has decreased over the years, but it remains a significant challenge, especially in rural areas.

2. Rural-urban divide: Poverty in India is concentrated in rural areas, where access to basic resources is limited. According to a report by the National Sample Survey Office, rural poverty in India is twice that of urban poverty.

3. Education and Poverty: Education is an important factor in reducing poverty, as it helps individuals acquire the necessary skills and knowledge to secure better jobs and improve their standard of living. However, India has a high rate of illiteracy, which perpetuates the cycle of poverty.

4. Health and poverty: Poverty in India is associated with poor health outcomes, especially among children. Malnutrition is a widespread problem, with 34% of children under the age of five being underweight. Lack of access to clean water and sanitation also leads to the spread of diseases such as diarrhoea, cholera and typhoid.

5. Women and poverty: Women are more likely to live in poverty than men in India, mainly due to cultural and social factors that limit their access to education, health care and employment opportunities.

6. Social Safety Net: The Government of India has implemented various social safety net programs to address poverty, such as the Public Distribution System (PDS), which provides subsidized food grains to low-income households.

However, these programs have been criticized for their inefficiency and corruption.

7. Sustainable Development Goals: India is committed to achieving the United Nations’ Sustainable Development Goals (SDGs), which aim to eradicate poverty, reduce inequality and promote sustainable development. To achieve these goals, the government has implemented various initiatives such as the Swachh Bharat Abhiyan, which aims to provide access to clean water and sanitation.

In short, poverty in India is a vast and complex issue that requires a multi-pronged approach to address it. While progress has been made, more needs to be done to achieve a more equitable and just society

Alleviating poverty in India requires a concerted effort by various stakeholders including the government, civil society organisations, the private sector and individuals. Here are some measures that can help reduce poverty in India:

1.Investment in basic resources: Investment in basic resources such as education, health care, water and sanitation is necessary to reduce poverty. Ensuring that all citizens have access to these resources will help break the cycle of poverty.

2. Promotion of employment opportunities: Creating employment opportunities especially in rural areas will help in reducing poverty. The government can implement policies that promote the growth of small and medium-sized enterprises, which are the primary sources of employment in India.

3. Promoting Entrepreneurship: Encouraging entrepreneurship can help reduce poverty by creating more employment opportunities and promoting economic growth. The government can provide support to entrepreneurs through funding, training and other resources.

4. Promoting gender equality: Promoting gender equality will help reduce poverty, as women are more likely to live in poverty than men. The government can implement policies that promote women’s education, employment and participation in decision making.

5. Strengthening social safety net: The government may strengthen social safety net programs such as the National Rural Employment Guarantee Act (NREGA) and the Public Distribution System (PDS) to ensure that benefits reach the intended beneficiaries.

6. Strengthening Governance: Corruption and inefficiency in governance are major barriers to poverty reduction. Government can strengthen governance by implementing policies that promote transparency, accountability and the rule of law.

7. Promote sustainable development: Promoting sustainable development can help reduce poverty in the long run. The government can implement policies that promote sustainable agriculture, renewable energy and environmental protection.

In conclusion, reducing poverty in India requires a multi-pronged approach involving various stakeholders. Ensuring access to basic resources, promoting employment and entrepreneurship, promoting gender equality, strengthening social safety nets, strengthening governance and promoting sustainable development are some of the measures that can do help reduce poverty in India.

Poverty in India is a widespread issue that affects a significant portion of the population. Despite economic growth in recent years, a large proportion of the population still lives in poverty, with inadequate access to basic necessities such as food, shelter and health care. Poverty in India is a complex problem caused by various factors such as caste discrimination, lack of education, unemployment and inadequate infrastructure.

Caste discrimination is one of the major causes of poverty in India. The caste system has existed in India for centuries and is deeply rooted in the social fabric of the country. People from lower castes are often discriminated against and denied access to basic resources and opportunities. This often leads to a cycle of poverty that is difficult to break.

Lack of education is another factor that contributes to poverty in India. Without access to education, people are unable to acquire the skills necessary to secure well-paying jobs. This keeps them stuck in low paying jobs with little hope of upward mobility. Apart from this, lack of education also leads to lack of awareness about basic health and hygiene practices, which leads to more diseases.

Unemployment is also an important contributor to poverty in India. Despite the government’s efforts to create jobs, the unemployment rate remains high, especially among the youth. This leads to a reduction in income, making it difficult for people to afford basic needs such as food, shelter and health care.

Inadequate infrastructure is another factor that increases poverty in India. Poor road network, inadequate health facilities and lack of access to safe drinking water and sanitation facilities are some of the basic infrastructure problems that affect people living in poverty. These problems make it difficult for people to access basic necessities and increase their vulnerability to diseases and other health problems.

Poverty in India is a complex problem that requires a multidimensional solution. Addressing issues such as caste discrimination, lack of education, unemployment and inadequate infrastructure can go a long way in reducing poverty in India. Additionally, the government needs to focus on creating more jobs and providing a better social safety net for those living in poverty. Only by adopting a comprehensive approach to reducing poverty can India hope to lift its citizens out of poverty and move towards a better future and their vulnerability to diseases and other health problems.

In conclusion, poverty in India is a complex problem that requires a multi-pronged solution. Addressing issues such as caste discrimination, lack of education, unemployment and inadequate infrastructure can go a long way in reducing poverty in India. The government needs to focus on creating more jobs and providing a better social safety net for those living in poverty. Only by adopting a comprehensive approach to poverty reduction can India hope to lift its citizens out of poverty and move towards a better future.

Essay on Poverty in India 300 words

Introduction:

Poverty is a multifaceted issue that has plagued India for centuries. Despite remarkable economic growth and development in recent decades, a significant portion of India’s population continues to grapple with poverty. This essay aims to shed light on the persistent problem of poverty in India, its causes, consequences, and potential solutions.

• Income Inequality: Income inequality is a major driver of poverty in India. The rich-poor divide is stark, with a small elite accumulating enormous wealth while a large section of the population struggles to make ends meet.
• Unemployment: High levels of unemployment, particularly in rural areas, contribute to poverty. Lack of access to quality education and skills training perpetuates this problem.
• Agricultural Dependence: A significant portion of the Indian population relies on agriculture for their livelihoods. Fluctuating crop yields, inadequate infrastructure, and lack of modern farming techniques make agriculture a precarious source of income.
• Social Factors: Caste-based discrimination and social exclusion continue to marginalize certain groups, making it difficult for them to escape the cycle of poverty.
• Healthcare: Poverty leads to inadequate access to healthcare, resulting in higher mortality rates and increased susceptibility to diseases.
• Education: Impoverished families often cannot afford education for their children, perpetuating a cycle of illiteracy and limited opportunities.
• Malnutrition: Poverty contributes to malnutrition, affecting physical and cognitive development, particularly in children.
• Crime and Social Unrest: High levels of poverty can foster crime and social unrest, as individuals may resort to illegal means for survival.
• Education and Skill Development: Investing in quality education and skill development programs can empower individuals to break free from the cycle of poverty.
• Rural Development: Improving infrastructure, agricultural techniques, and providing alternative livelihood options in rural areas can alleviate poverty.
• Social Welfare Programs: Expanding and improving social welfare programs, such as food subsidies, healthcare access, and direct cash transfers, can provide immediate relief to those in need.
• Reducing Income Inequality: Implementing progressive taxation and wealth redistribution policies can help bridge the income gap.
• Addressing Social Discrimination: Stricter enforcement of anti-discrimination laws and promoting social inclusion can reduce the impact of caste-based discrimination.

Conclusion:

Poverty remains a formidable challenge in India, affecting millions of people across the country. To eradicate poverty, it is essential to address its root causes, including income inequality, lack of education, and unemployment. A multi-pronged approach that combines economic development with social welfare programs and efforts to reduce discrimination is crucial to uplift the impoverished sections of society. Only through sustained efforts can India hope to overcome the scourge of poverty and provide a better future for all its citizens.

India, a country known for its rich cultural heritage and economic potential, also grapples with a severe and persistent issue – poverty. With a population of over 1.3 billion, India is home to one-third of the world’s poor. Poverty in India is a complex problem that has deep-rooted causes and far-reaching consequences.

One of the primary causes of poverty in India is the vast income inequality. While India has witnessed significant economic growth over the past few decades, this growth has not been inclusive. A small section of the population has reaped the benefits of economic progress, leaving a large majority of people behind. This inequality is exacerbated by factors such as lack of access to education, healthcare and job opportunities, especially in rural areas.

Furthermore, India’s high population density and limited resources make poverty a persistent challenge. The lack of basic infrastructure, inadequate sanitation facilities and unreliable access to clean drinking water further perpetuate poverty cycles.

Poverty in India has multifaceted consequences, affecting not only the economic well-being of individuals but also their health, education and overall quality of life. It also hinders the country’s overall development and social progress.

Addressing poverty in India requires a comprehensive approach that includes equitable economic policies, improved access to education and healthcare, rural development initiatives and social safety nets. Empowering marginalized communities, investing in skill development and promoting job creation can help break the cycle of poverty.

In conclusion, poverty remains a pressing issue in India, impacting millions of lives. It is essential for the government, civil society and international organizations to work collaboratively to address the root causes of poverty and uplift the disadvantaged populations, ensuring a brighter and more equitable future for all Indians.

Poverty in India remains a pressing issue with multifaceted challenges. Despite economic growth, a significant portion of the population still lives below the poverty line. Factors contributing to this include unequal distribution of wealth, limited access to quality education and healthcare, and a lack of employment opportunities, especially in rural areas. Additionally, social disparities, such as caste and gender discrimination, exacerbate the problem. Addressing poverty requires comprehensive strategies encompassing economic reforms, social programs, and inclusive development initiatives. By tackling these root causes, India can strive towards a more equitable society, improving the lives of millions and fostering sustainable growth.

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Essay on Poverty in India

Students are often asked to write an essay on Poverty in India in their schools and colleges. And if you’re also looking for the same, we have created 100-word, 250-word, and 500-word essays on the topic.

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100 Words Essay on Poverty in India

Introduction.

Poverty is a significant issue in India, affecting millions of lives. Despite India’s economic growth, poverty remains prevalent, especially in rural areas.

Many factors contribute to poverty in India. Lack of quality education, unemployment, overpopulation, and inadequate public health are some of these factors.

Poverty affects individuals and communities. It leads to malnutrition, illiteracy, and low life expectancy. Children are the most affected as they lack access to basic needs.

Addressing poverty requires concerted efforts. Improving education, creating job opportunities, and enhancing public health services could help alleviate poverty.

Also check:

• Paragraph on Poverty in India
• Speech on Poverty in India

250 Words Essay on Poverty in India

India, despite its substantial economic growth, is home to a significant portion of the global poor. Poverty in India is a multifaceted issue, shaped by socio-economic, political, and cultural factors.

Underlying Causes

The root causes of poverty in India are manifold. The country’s historical caste system has perpetuated socio-economic disparity, while gender bias has further limited opportunities for women. Additionally, rapid population growth has strained resources, leading to inadequate access to basic amenities such as education, healthcare, and employment.

The impacts of poverty are profound. It perpetuates a cycle of illiteracy and low-skilled labor, trapping generations in a poverty loop. Furthermore, it exacerbates health issues and malnutrition, particularly among children, undermining India’s future human capital.

Government Initiatives

The Indian government has implemented multiple poverty alleviation programs, including the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) and the Pradhan Mantri Jan Dhan Yojana. However, their effectiveness is limited by issues such as corruption, lack of awareness, and inadequate implementation.

Addressing poverty in India requires a holistic approach that addresses its root causes. This includes promoting inclusive growth, gender equality, and sustainable development. Equally important is the need for transparent and efficient implementation of poverty alleviation programs. Only then can India truly leverage its demographic dividend and achieve its development goals.

500 Words Essay on Poverty in India

Poverty, a socio-economic issue, is a multi-dimensional problem that affects a large portion of the Indian population. Despite the country’s significant economic growth, poverty remains a persistent challenge, with millions of people living below the poverty line.

The Magnitude of Poverty in India

India, home to more than a billion people, is the world’s largest democracy. However, it also houses a significant portion of the world’s poor. According to the World Bank, in 2019, 21.9% of the Indian population lived below the national poverty line. The issue is more pronounced in rural areas where agriculture, the primary source of income, is often affected by unpredictable weather patterns and poor infrastructure.

The Causes of Poverty

Poverty in India can be attributed to a myriad of interconnected factors. First, the country’s rapid population growth has put immense pressure on its resources, exacerbating poverty. Second, the lack of access to quality education and healthcare, particularly in rural areas, has perpetuated a cycle of poverty. Third, social inequality and discrimination based on caste, religion, and gender have further entrenched poverty. Lastly, corruption and inefficient public distribution systems have hindered poverty alleviation efforts.

Impact of Poverty

The impacts of poverty are far-reaching and multi-faceted. It affects physical health due to malnutrition and inadequate healthcare. It restricts access to quality education, thus limiting opportunities for upward mobility. Poverty also exacerbates social tensions and can lead to a rise in crime rates. Moreover, it hinders the country’s overall economic progress, as a significant portion of the population remains unable to contribute effectively to the economy.

Poverty Alleviation Measures

India has implemented numerous poverty alleviation programs over the years. Initiatives like the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) provide guaranteed employment to rural households. The Pradhan Mantri Jan Dhan Yojana aims to increase financial inclusion. However, the effective implementation of these programs remains a challenge due to corruption and bureaucratic inefficiencies.

Poverty in India is a complex issue that requires a comprehensive and multi-pronged approach to address. While significant strides have been made, much work remains to be done. Efforts must be made to improve access to quality education and healthcare, promote social equality, and ensure the effective implementation of poverty alleviation programs. Only then can India hope to break the cycle of poverty and ensure a prosperous future for all its citizens.

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The Hardships and Dreams of Asian Americans Living in Poverty

Illustrations by Jing Li

Asian Americans are often portrayed as economically and educationally successful.

In reality, about one-in-ten Asian Americans live in poverty. Asian Americans also have the most income inequality of any major racial or ethnic group in the United States.

Without closely examining the diversity of Asian American experiences, it’s easy to miss the distinct stories of Asian Americans living with economic hardship.

To understand more about this population, Pew Research Center conducted 18 focus groups in 12 languages to explore the stories and experiences of Asian Americans living in poverty.

Table of Contents

Of the 24 million Asians living in the United States, about 2.3 million live in poverty . Many are working to overcome the economic hardships they encounter and achieve their American dream. But they face challenges along the way, from Asian immigrants grappling with language barriers to U.S.-born Asians navigating pathways to success.

In February 2023, Pew Research Center conducted 18 focus groups with adult participants from 11 Asian origin groups in different regions across the U.S. These are among the most likely Asian origin groups to experience economic hardship in the U.S. Focus groups included those whose approximate family income is at or below 140%-250% of the 2022 federal poverty line, depending on their location. Accompanying these focus group findings are results from a Pew Research Center survey about the hardships and dreams of Asians living in poverty, conducted from July 2022 to January 2023.

Some common themes that focus group participants shared include day-to-day financial difficulties, assumptions by others that they do not need help because they are Asian, and the importance of financial security in achieving the American dream.

Related:   1 in 10: Redefining the Asian American Dream (Short Film)

Focus groups also reveal that Asian Americans’ experiences with economic hardship differ by whether they were born in the U.S. or outside the country. Some immigrants not only experience difficulties making ends meet, but also face challenges that come with living in a new, unfamiliar country. These include learning English, navigating daily life in a new place and finding a stable job.

Even though U.S.-born Asians grew up in this country and speak English, they talk about the challenges of understanding what it takes to succeed in America. This includes getting the “right” education, getting access to the “right” knowledge and knowing the “right” people to succeed.

The findings in this data essay reveal what participants shared about their experiences with economic hardship, overcoming challenges, and their views of the American dream and social mobility in America.

The terms Asians and Asian Americans are used interchangeably throughout this data essay to refer to those who self-identify as Asian, either alone or in combination with other races or Hispanic identity.

The terms living in poverty, living near or below the federal poverty line and living with economic hardship are used interchangeably throughout this essay to refer to adults whose family income is close to or below the 2022 federal poverty line.

• For results on Asian adults from the focus groups, this refers to adults whose approximate family income is at or below 140%-250% of the federal poverty line. Thresholds varied by focus group recruitment locations to account for differences in the cost of living.
• For results on Asian adults from the survey , this refers to adults whose approximate family income falls at or below 100% of the federal poverty line.
• For data on the total U.S. Asian population from the U.S. Census Bureau , this refers to all Asian Americans whose family income is at or below 100% of the federal poverty line.

The terms federal poverty line and poverty line are used interchangeably to refer to the federal poverty guidelines published yearly by the U.S. Department of Health and Human Services.

The term U.S. born refers to people born in 50 U.S. states, the District of Columbia, Puerto Rico or other U.S. territories.

The term immigrant refers to people who were born outside the 50 U.S. states or the District of Columbia, Puerto Rico or other U.S. territories.

Asian Americans and financial struggles

Financial difficulties are part of many Asian Americans’ day-to-day lives, according to the 2022-23 survey. Asian adults were asked if they had experienced any of the following financial challenges in the past 12 months: gotten food from a food bank or a charitable organization, lost their health insurance, had problems paying for their rent or mortgage, had trouble paying for medical care for themselves or their family, had trouble paying their bills, or been unable to save money for emergencies.

“It got really bad to the point where a simple bowl of rice, we weren’t even able to afford that. So there were times where a bowl of rice would be a meal for all three meals, or we just simply did not eat.” NOLAN , FILM PARTICIPANT

The most common financial difficulty experienced is being unable to save for emergencies. More than half of Asian adults living in poverty (57%) said this had happened to them. By comparison, fewer Asian adults living above the poverty line (40%) said this.

Note: “Asian adults living in poverty” refers to survey respondents whose approximate family income is at or below 100% of the federal poverty line. Share of respondents who didn’t offer an answer or answered “no” not shown.

Source: Survey of Asian American adults conducted July 5, 2022-Jan. 27, 2023. “The Hardships and Dreams of Asian Americans Living in Poverty”

Some focus group participants shared how challenging it was for them to save because of their earnings and their family needs. Participants also talked about the urgency they feel to save for their children and retirement:

“I feel a bit helpless [about my financial situation]. … I don’t want to be in debt. I have to save money to raise my kids, but I don’t have money to save.”

–Immigrant man of Korean origin in early 30s (translated from Korean)

“[I save money] to go to Pakistan. Because I have four children … I needed five or six tickets, in case my husband traveled with us, and it required a lot of money. We used to save for one whole year, and when we were back from Pakistan, we were usually empty-handed. Then the cycle started again.”

–Immigrant woman of Pakistani origin in late 40s (translated from Urdu)

“You’re not going to work forever. No one is going to work forever. You want to have savings … for your rent [or] in case of medical bills [if] something happens. [You] might as well [save for] some trips down the while when you [can] travel still. But you’re not going to be working at 80 years old, are you?”

–U.S.-born man of Chinese origin in early 40s

“We were all four of us in one apartment, four siblings, plus the parents, so that’s six people in a house, which was very, very cramped.” SABA , FILM PARTICIPANT

Other common difficulties for Asian Americans living near or below the poverty line include having trouble paying their bills (42%), needing to get food from a food bank or a charitable organization (38%) and having problems paying their rent or mortgage (33%), the survey found. Smaller shares of Asian adults living above the poverty line say they experienced difficulties paying their bills (17%), got food from a food bank or a charity (6%) or had trouble paying their rent or mortgage (11%).

These findings were echoed in our focus groups, where participants recalled the stress and tension their families felt when things like this happened to them:

“My dad lost his car a couple of times. There was this one time where I remember it was nighttime. All of a sudden, a cop comes over to our home [with another person]. … And my dad was forced to give up his car to this stranger … because, I don’t know, he wasn’t paying off the car or something. And it was very humiliating, and my brothers wanted to get physical with that person because he was acting very arrogantly. My dad was able to eventually pay back the car and somehow get it back. But there were many times when we might not have had a roof over our heads.”

–U.S.-born man of Pakistani origin in late 20s

Asian immigrants face challenges navigating life and employment in the U.S.

Immigrant and U.S.-born Asians experience economic hardship in different ways. Asian immigrants in the focus groups discussed how a lack of English proficiency, navigating transportation and getting a good job all shape their experiences with economic hardship.

“I felt sad about life, didn’t know the language, didn’t know the roads. I had no friends, so I felt very sad.” PHONG , FILM PARTICIPANT (TRANSLATED FROM VIETNAMESE)

For example, not knowing English when they first arrived in the country created extra challenges when using local transportation systems and meeting basic daily life needs such as shopping for groceries:

“When we were very young, the most difficult thing we faced [after coming to the U.S.] was not being able to speak the language. Unless you lived in those times, you wouldn’t know. We didn’t know how to buy food. … We didn’t know the language and there was no interpreter available. … I didn’t know how to take the bus, I didn’t know where to go, or to which place they were taking me to school. When we were asked to go to the classroom, we didn’t know where to go. … There was no other way, because there was no communication.”

–Immigrant woman of Hmong origin in late 50s (translated from Hmong)

Language barriers also brought extra hurdles for Asian immigrants in the job market. Some focus group participants said it was hard to explain their skills to potential employers in English effectively, even if they had the relevant education or skills for the job and had learned English before they immigrated:

“After coming [to the U.S.], there were many problems to face, first … the language problem. We have read English … but we are not used to speaking. … We also had education … but since we can’t explain ourselves in English – what we can do, what we know … we are getting rejected [from jobs] as we cannot speak. … Another problem was that I had a child. My child was small. I could not go to work leaving him. At that time, my husband was working. He also had the same thing – he had education, but he could not get a good job because of the language. [As another participant] said, we had to work below the minimum wage.”

–Immigrant woman of Bangladeshi origin in late 30s (translated from Bengali)

Not wanting to be a burden influenced life choices of many U.S.-born participants

For many U.S.-born focus group participants, concerns about being a burden to their families shaped their childhoods and many of their life decisions:

“It’s difficult to talk to [my parents] because you grew up here and it’s just totally different from them growing up in Vietnam. … It’s the same like what [another participant] was saying, when you take off the burden to your parents, right? So I dropped out of college, just because I didn’t want them paying anymore. I just didn’t think that I was going to do or be anything in college, right? So I would rather work. So I started taking responsibility of my own and you start working really hard and you getting out of the house and helping them pay for bills.”

–U.S.-born man of Vietnamese origin in mid-40s

“My family’s struggling. Is education more important, [or] is working more important? I really felt that growing up because a lot of my friends, education – going to college and going to a techno school – wasn’t really on their radar, it wasn’t really something on their plan. I think talking to a lot of the folks and a lot of my friends during their time, they felt like they had to grow up to provide for their family or for you to find some type of income to kind of help their family. And so that really drove the direction of at least one of my friends, or a lot of my friends.”

–U.S.-born man of Hmong origin in mid-30s

Some U.S.-born focus group participants said that when reflecting on their childhoods, they could see the financial burden they had on their families in a way they did not realize as a child:

“At a certain point you become very aware of how much of a financial burden you are. You don’t ask for anything you want. Like, you don’t ask for prom. You don’t ask to join clubs. You don’t ask to go on field trips, things like that. You just know that it’s going to cause so much drain on your parents.”

–U.S.-born woman of Vietnamese origin in mid-20s

“[My parents] had like a lot of responsibilities, like … giving money back to their father, and then their sisters and brothers, helping them out back [in Pakistan]. … [My father] had to support us and then send money back constantly there. I didn’t know that until now, basically. … We would hardly see him. Maybe like on Sunday, we would see him a couple of hours. But it was on the weekdays, we would hardly see our father. He was always working.”

–U.S.-born woman of Pakistani origin in early 30s

Overcoming economic challenges

The survey found that when Asian adults living in poverty have needed help with bills, housing, food or seeking a job, about six-in-ten (61%) say they’ve turned to family or friends.

Some focus group participants mentioned that families and friends in their ethnic community were a great source of financial help. For others, the limited size of their ethnic community in the U.S. posed obstacles in obtaining assistance.

“My dad arrived in the U.S. when he was 26 years old, and I’m now 29 years old. … I have seven siblings and my parents who support me. And my parents didn’t have that, they didn’t have their parents to support them.” TANG , FILM PARTICIPANT

“It was very difficult during [my] study [at university]. … I had a scholarship, most of the part was scholarship; however, I had to pay something between $10,000 and $15,000 per semester. And I had to eat, I had to pay rent, I had to do everything. At the same time, there are many other things too, aren’t there? And there was always a stress about money. This semester is over now, how do I pay for the next? I had no clarity about what to do and not to do. In that situation, I approached those friends studying there or who came there a little earlier and were working to borrow money. … I [was] offered help by some friends and in finding a job and being helped for my needs.”

–Immigrant man of Nepalese origin in early 40s (translated from Nepali)

“We didn’t have a large Burmese community to ask for such help. It was not yet present. As we had no such community, when we had just arrived, we told close friends, got directions and went to ask for help.”

–Immigrant woman of Burmese origin in late 40s (translated from Burmese)

However, not all Asians living with economic hardship have asked for or received help. In the focus groups, participants shared why they or their families sometimes did not do so or felt hesitant. Fear of gossip and shame were mentioned multiple times:

“[I experienced financial difficulties after I first arrived in the U.S.] because I came here as a student. … It’s because I had to pay monthly rent and I paid for living expenses. I felt a little pressured when the monthly payment date approached. I had no choice but to ask my parents in Korea for money even as an adult, so I felt a sense of shame.”

–Immigrant woman of Korean origin in early 40s (translated from Korean)

“My cousin will [help me financially] without judgment. But, like, my aunt and elders – if it gets back to them [that I asked for help], it’s going to for sure come with judgment. And if I could figure it out myself, I will take the way without judgment.”

“To add on to what [another participant] said, if you go to the community [for help] or whatever, you know, by tomorrow everybody’s going to know it’s your problem.”

–U.S.-born woman of Pakistani origin in early 40s

Immigrants who came to the U.S. because of conflict are more familiar with government aid programs

Asian immigrants come to this country for a variety of reasons. In the focus groups, immigrant participants who came to the U.S. due to conflict or war in their origin countries referenced government assistance programs more often than those who came for other reasons.

This reflects a broader pattern among Asian immigrants overall: Those who came because of conflict or persecution have turned to federal, state or local governments for help with living expenses or employment more often than immigrants who came for economic or educational opportunities, according to the survey.

Focus group participants reflected on differences in the amount of government help available. Sometimes, they expressed a sense of unequal treatment:

“Vietnamese have this program where people got sponsored because of the war. So for other Asians, they feel that we are more privileged. Because from what I know, the Koreans and the Japanese, they must have money in order to come to America. As for us, we can come here through the refugee program, we can come here through the political program. They feel that we got more preferential treatment than other Asians in that regard.”

–Immigrant man of Vietnamese origin in early 40s (translated from Vietnamese)

“During the pandemic, I had to go through housing assistance and everything [to pay my rent]. Something like that with EBT [Electronic Benefits Transfer], how they send you stimulus checks. Korea doesn’t have any of that stuff.”

–U.S.-born woman of Korean origin in late 40s

“I think my community is relatively traditional. Because 20 years ago, we went straight to Chinatown fresh off the plane [after immigrating]. I still remember being in [the local] hospital, lots of social workers were there to help out, including with a medical insurance card, and applying for service, most importantly medical insurance. We all went to [the same] street. We relied on other Chinese people.”

–Immigrant man of Chinese origin in late 30s (translated from Mandarin)

Family ties contribute to increased awareness of government programs. For example, when asked how they learned about using government programs for help, some U.S.-born participants said:

“[I learned about the government programs from] my parents. I had to translate for them.”

–U.S.-born woman of Cambodian origin in mid-30s

“I was working at [a smoothie shop], and I was 17 and a half. … My college loan was like $50,000 [and I was] making $12.50 [an hour], how the hell am I supposed to be paying that month to month? Because my month-to-month was damn near $300, $500. My $12.50 an hour does not even cover for it, any of it, whatsoever. And, you know, me [having] been kicked out of home … I was living with my aunt. … I don’t want to burden her. So I had to go and ask her. She told me, ‘Hey, you should go and apply for food stamps.’”

–U.S.-born woman of Laotian origin in mid-30s

U.S.-born and immigrant focus group participants hold different views on education’s role in achieving a better future

“My friend, he started out at internship … I was too naive. I was laughing at the time, like, ‘Man you spend your time? You took buses there every day? No pay?’ … I just didn’t know the big picture behind [it]. I wish I could plan for [it] just like how they did.” PHUOC , FILM PARTICIPANT

Reflecting on what could lead to success and achieving the American dream, focus group participants who were born in or grew up in the U.S. emphasized the value of getting connected to the “right” opportunities:

“[You don’t have] to go to school to be successful. I mean, they say there are people who are book smart and just people who are street smart, you know. [As long as you] grow up and you know the right people … networking on the right people to get into things. Or, you know, the right people to do the right things to get to where you want to be in life.”

–U.S.-born man of Hmong origin in late 20s

Other participants said it would have helped if their families had a deeper understanding of how the education system prepares them for good careers:

“I feel if my parents were educated and they could have guided me in the right direction [for college] – although, they tried their best. I’m not blaming them. But, you know, if I had someone of a more academic background who knew the system … I will try my best to help my daughter out in college or help her choose what her major is going to be. [My parents couldn’t provide] that kind of help that really helped me in choosing my major. … And so I think just the background that we come from was not the best – or not having the full grasp of this system. … Versus someone who’s had parents here for multiple years, and their parents are now telling them, like, ‘Hey, this is not the right decision for you. Try doing this. This will be better in the long run.’”

–U.S.-born man of Pakistani origin in early 30s

Some also said firsthand knowledge of how to invest and how the U.S. financial system works would have helped:

“[In] the newer generation, we have access to learn all the things we need to, right? [I watch videos] that talk about, like, ‘These are the things you need to do in order to be financially successful. You need to invest your money, get into stocks,’ and stuff like that. And I know that not even 1% of my Hmong community knows anything about that stuff. … So I think we can be more financially successful, including myself, if we were to look more deeply into those things.”

–U.S.-born woman of Hmong origin in late 20s

“If you’re educated and know how, like, let’s say investments work, if you know how that’s done and then you apply it actually going through [someone] like investors or even stockbrokers, then you’ll see the fruits of your labor, or at least experience that, as opposed to not even having the knowledge or even the experience to begin with.”

–U.S.-born man of Cambodian origin in mid-30s

Some participants shared that even when they have some knowledge of financial institutions, they feel the system is working against them:

“I think systematic racism [is a barrier to achieving the American dream]. … I mean, if you own a car, you got to get the bank to approve you. … And they charge people with, like, no credit the highest fee, the most percentage, which are a lot of the folks [like] us trying to achieve the American dream. And then we go to neighborhoods that have the highest crime rate, we also have the most premiums. … And so I think that, one, we’re paying a lot more with much less … the system [was] set up well before minorities, and I think we’re pretty much going to fall behind.”

Many focus group participants also see the value of education, especially a college one, in leading toward a better future and achieving the American dream:

“[When I think of the American dream, it means] if you work hard enough, you can succeed. … You can get an education or a higher education. Then you have so many choices here and exposure to so many ideas and concepts that you wouldn’t otherwise.”

“The bachelor’s degree was important to me in the sense that I needed it so that I could apply for the jobs I wanted. … I guess it made things a bit easier.” THET , FILM PARTICIPANT (TRANSLATED FROM BURMESE)

But this sentiment resonated more with immigrant participants than those born in the U.S.:

“It is the education and the relevant knowledge I think that our Hmong people must have. We’ve been living in this country for the last 45 years. I think that to live in this country, it is very important for some people. I do not think everyone has a ‘lawyer’ or a ‘doctor’ in their house. If it happens, maybe we will reach our goal and the poverty will gradually disappear from our lives.”

–Immigrant woman of Hmong origin in mid-30s (translated from Hmong)

“I think if I obtain any degree, I would perhaps be able to do something.”

Assumptions about Asians hurt their chances of overcoming challenges

Participants shared that other people’s assumptions about Asians complicate their experience of living with economic hardship. Asians are often characterized as a “model minority” and portrayed as educationally and financially successful when compared with other groups.

Some participants shared how the assumption that all Asians are doing well hurt their ability to seek help:

“I have a daughter … she’s the only Asian in class. … Everybody tends to think, ‘She’s Asian; she’s so smart; her mommy has money. So you got to invite her to your birthday party because her mom is rich. [Her] mom will buy you a present.’ … I’m not rich, but because we’re Asian … she’s invited to all these parties.”

–U.S.-born woman of Hmong origin in early 30s

“What I can assume is that outside of our community, especially at the government level, [including] state level and central federal level here, we are missing out or not eligible for benefits. In their opinion, we are rich, no matter if we are working or not. [They may think] our stories may not be genuine. They may think we are making up a story [if we apply for benefits].”

Striving for the American dream

Freedom was a recurring theme in how focus group participants define their American dream. Two aspects were mentioned. The first was freedom from debt and stress over making ends meet, such as paying for everyday basic needs including rent and food. The second was the ability to make life choices freely without financial constraints, enabling them to live the life they aspire to.

Reaching the American dream

Half of Asians living near or below the federal poverty line say they believe they have achieved the American dream or are on their way to achieving it, the survey found. This includes 15% who say they have achieved it and 36% who say they are on their way. By comparison, among those living above the poverty line, 27% say they’ve achieved the American dream, and another 46% say they are on their way.

“Before I came to America, I had never heard of the American dream. … But because I was able to at least bring my son along, not only my life but also his education has improved significantly.” THEIN , FILM PARTICIPANT (TRANSLATED FROM BURMESE)

Among focus group participants, many were optimistic about reaching the American dream for themselves:

“[To me, the American dream is] the opportunity to come to America. I’ve learned a lot after reaching here. And I’ve been able to help my parents and relatives. Despite facing some troubles here, I’ve [provided them a] little financial assistance. I would’ve been unable to help them if I had been in Bhutan.”

–Immigrant woman of Bhutanese origin in late 40s (translated from Dzongkha)

Some participants were also hopeful that the next generation can achieve their American dream, even when they themselves are not there yet:

“When I think about the American dream, I look back at myself, because I belong to the first generation that came to this country. We all started very late. I know that this country will help you, but really it will not be easy for us. … What I think will help me to be happy is to ‘reach the American dream.’ If I can’t achieve it, then I will support my children so that they can reach the dream and I will be happy with them. I will give my children money to help them study.”

“If I can’t get [the American dream] for myself, it is okay. No matter how I am, I’ve already reached half of my life. But I’ve done as much as I can do for [my children], so my responsibility is done. If it’s their turn, I believe they will be able to do all that I couldn’t. I believe it.”

“I would like to own a home one day. And at this rate, and like many of my peers, that’s not a reachable goal right now. I don’t see it being a reachable goal for me for a very, very, very long time.” TANG , FILM PARTICIPANT

Still, the survey found that 47% of Asian adults living in poverty say the American dream is out of reach for them, higher than the share among those living above the poverty line (26%). Not all Asians living in poverty feel the same way about achieving the American dream, with U.S.-born Asians in the focus groups being less optimistic about reaching the American dream than immigrant Asians.

“In a certain era with the U.S. and the immigrants coming, the American dream [was] you come, you study, you do this, you can climb up the ladder, etc., etc. That was the big American dream. And I think there was a period where that was possible. Not any longer.”

Others also shared worries about their prospects of reaching the American dream because of different immigration histories and economic concerns such as inflation:

“I think I was conditioned to think too small to have the American dream. … Vietnamese Americans came over here at a very specific time. … There were Chinese Americans that came here like centuries ago, and they had the time to build generational wealth. We know that Vietnamese people came here in the ’70s. That’s not enough time to grow generational wealth.”

–U.S.-born woman of Vietnamese origin in late 20s

“I have kids. … They’re spoiled. … Now with inflation, houses are more expensive now [than 10, 20 years ago], right? Let’s say 20 years from now, when they buy a house, [the American dream] is going to be unachievable, you know what I mean? Like, unless they are a TikTok star or an entertainer or some kind. … [It’s] going to be tough.”

–U.S.-born man of Chinese origin in late 30s

Freedom from debt

For many participants, being debt-free is important to their vision of the American dream and promotes a life with more financial stability and independence:

“[If I could choose one dream in America, it would be to have] no debt. … When buying something, they always say, ‘Be careful, or you’ll be in debt.’ … And that is what got stuck in my throat.”

–Immigrant woman of Laotian origin in mid-30s (translated from Lao)

“[I haven’t achieved the American dream because I’m not] debt-free, you know, just trying to have extra money, instead of living paycheck to paycheck.”

“[My dream in America is] to be independent, for example, we always lived with the money of mom and dad. One is to be independent when you come here. Let me earn so much money that if I go to the store and buy something, I don’t even have to look at the price tag. That [is] my dream.”

–Immigrant woman of Nepalese origin in early 40s (translated from Nepali)

Participants shared that being debt-free also means having less stress and worry about making ends meet so that they can have extra resources and bandwidth to help their families:

“[The most important thing to achieving the American dream is] being debt-free and having real estate and income steadiness. … If you have rent income, you’re not trading in your time for money, so you have real estate. … You’re not stressing, you have time for your kids more, and your family. You’re probably a little bit happier.”

–Immigrant man of Cambodian origin in mid-20s

“The main thing is that I want to fully support my father and mother, and that I don’t have to worry about [how] I will support myself, or how I will pay my house rent. This is my number one.”

–Immigrant woman of Bangladeshi origin in late 20s (translated from Bengali)

For others, having a stable job is an important step to reaching the American dream:

“I want to have a job, and if I have a job, I’ll have money. I’m only working three and a half days a week right now, and I want to work more. I want more jobs the most, right now. I don’t need anything in America. Just a job.”

Freedom to dream

Focus group participants mentioned having the financial ability to not only meet their basic needs, but also pursue their dreams. Asians born in the U.S. mentioned the freedom to chase one’s aspirations without financial constraints more often than immigrants. Regardless of nativity, the ability to live the life they want is fundamental to many focus group participants’ definitions of the American dream:

“[When] everyone around you is immigrants and you’re all just trying to survive, the only thing you’re trained to think about is survival. But you’re not thinking about investment. Like, when you grow older and you start thinking, ‘Okay, I need to spend money to make money,’ that’s when you start thinking bigger. Yeah, I’m not just thinking about like having one home, I want 10 homes.”

“[Financial] stability is you have nothing but you could survive. [Financial] freedom is you have enough that you can do anything you want. That’s my financial freedom.”

“As it was so hard at that time … what motivated you to keep going and work so hard?” “My strength, my mindset was I wanted to earn money so that my children could have a bright future.” PHUOC AND PHONG , FILM PARTICIPANTS (TRANSLATED FROM VIETNAMESE)

The American dream, to some focus group participants, is about more than financial achievements. Finding happiness and helping others, ultimately leading them to live the life they desire, are key parts of their American dream.

“I want to thank [another participant] for saying ‘self-actualization,’ because personally I think it’s really powerful to be able to know what you want. Because then you’ll know what kind of job you want, what kind of house you want, whether you want to be in politics or not. Like, loving yourself and understanding yourself to your core, then that will be the [deciding factor].”

–Immigrant man of Cambodian origin in early 40s

“I think for me [the American dream] is that there is a house for me, with no interest, I do not owe any loan, my parents could live there comfortably, their struggle is over, and also I have enough … to be able to do something for Pakistan later [in life], God willing.”

–Immigrant woman of Pakistani origin in mid-20s (translated from Urdu)

“[Some people define success as having] lots of money, kids, cars, right? But that’s not really … what I would consider success. Success is something that – does it make you happy? … Are you happy every day going to work? Does it make you happy? When you come home, are you happy?”

About this project

Pew Research Center designed these focus groups and survey questions to better understand the experiences of Asian Americans living with economic hardship. By including participants who are among the Asian origin groups most likely to experience poverty, the focus groups aimed to capture, in their own words, their experiences and challenges in America today. The discussions in these groups may or may not resonate with all Asians living in poverty in the United States.

The project is part of a broader research portfolio studying the diverse experiences of Asians living in the U.S.

Survey and demographic analysis of Asians living in poverty

For a comprehensive examination of Asian adults’ experiences with economic hardship from Pew Research Center’s 2022-23 survey of Asian Americans, as well as a demographic analysis of the U.S. Census Bureau’s 2022 American Community Survey, read “Key facts about Asian Americans living in poverty.”

Videos throughout this data essay illustrate what focus group participants discussed. Individuals recorded in these video clips did not participate in the focus groups but were selected based on similar demographic characteristics and thematically relevant stories.

Watch the short film related to the themes in the data essay.

Methodological note

This multi-method research project examines the many facets of living with economic hardship among Asian Americans today.

The qualitative analysis is based on 18 focus groups conducted in February 2023 in 12 languages with 144 participants across four locations. Recruited participants had an approximate family income that is at or below 140%-250% of the federal poverty line, depending on the location. More information about the focus group methodology and analysis can be found in the focus group methodology .

The survey analysis included in this data essay is based on 561 Asian adults living near or below the poverty line from Pew Research Center’s 2022-23 survey of Asian Americans, the largest nationally representative survey of Asian American adults of its kind to date, conducted in six languages. For more details, refer to the survey methodology . For questions used in this analysis, refer to the topline questionnaire .

Acknowledgments

Pew Research Center is a subsidiary of The Pew Charitable Trusts, its primary funder. The Center’s Asian American portfolio was funded by The Pew Charitable Trusts, with generous support from The Asian American Foundation; Chan Zuckerberg Initiative DAF, an advised fund of the Silicon Valley Community Foundation; the Robert Wood Johnson Foundation; the Henry Luce Foundation; the Doris Duke Foundation; The Wallace H. Coulter Foundation; The Dirk and Charlene Kabcenell Foundation; The Long Family Foundation; Lu-Hebert Fund; Gee Family Foundation; Joseph Cotchett; the Julian Abdey and Sabrina Moyle Charitable Fund; and Nanci Nishimura.

We would also like to thank the Leaders Forum for its thought leadership and valuable assistance in helping make this survey possible.

The strategic communications campaign used to promote the research was made possible with generous support from the Doris Duke Foundation.

This is a collaborative effort based on the input and analysis of a number of individuals and experts at Pew Research Center and outside experts.

• In this data essay, definitions of “living near or below the poverty line” and related terms differ between survey respondents and focus group participants. Refer to the terminology box for details. ↩

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About Pew Research Center Pew Research Center is a nonpartisan fact tank that informs the public about the issues, attitudes and trends shaping the world. It conducts public opinion polling, demographic research, media content analysis and other empirical social science research. Pew Research Center does not take policy positions. It is a subsidiary of The Pew Charitable Trusts .

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• School Education /

Essay on Indian Economy for Students in 100, 200 and 500 Words

• Updated on  
• Jan 12, 2024

Essay on Indian Economy: The Indian economy is a mixed economy, which is primarily driven by the agriculture and services sectors. The agriculture sector contributes to nearly 20% of India’s GDP. Whereas, the services sector accounts for nearly 50% of the country’s GDP. Furthermore, the manufacturing sector contributes to around 28% of India’s GDP. Globally, India is ranked 142nd and 125th in terms of per capita income and nominal GDP, as per the International Monetary Fund (IMF). 

Since independence, India has transformed from an agricultural country to a mixed economy due to liberalization in 1991. To read more about the Indian economy, keep reading the blog on sample essays about the same. 

Table of Contents

• 1 100 words Essay on Indian Economy
• 2 200 words Essay on Indian Economy
• 3 500 words Essay on Indian Economy

Also Read: Class 12 Macroeconomics

100 words Essay on Indian Economy

The Indian economy is dynamic and rapidly growing. Currently, the economy is characterised by various sectors. The key contributors to the country’s economic growth are the agriculture, services, and manufacturing sectors. However, this was not always the case. India was an agricultural economy when the British left India in 1947 after plundering the sub-continent from 1600 to 1947. 

After independence, India became a part of the global economy in 1991, when the central government adopted the Liberalisation, Privatisation, and Globalisation (LPG) policy. Since then, the Indian economy has expanded in the service and manufacturing sectors significantly. At present, the economy is driven by government initiatives like Make in India and Digital India. However, we have a long way to go. 

Also Read: Find Economics PYQ UPSC Mains Question Bank: 2021-2018

200 words Essay on Indian Economy

Agriculture is the backbone of the Indian economy and of rural livelihoods. It not only employs a majority of the Indian population but also provides raw materials to different industries. In recent years, advancements and innovations in the industrial sector through schemes like the National Manufacturing Policy (NMP), the Technology Upgradation Fund Scheme (TUFS), and Make in India have contributed to the growth of the Indian economy. 

Despite progress and innovations in farming practices and the industrial sector both these industries are facing losses. This is due to limitations in government policies and a lack of awareness among the people of India. Even today, the agricultural sector is affected by outdated farming methods, dependency on weather, and a lack of skilled workers. All these issues need to be addressed by government policies that help promote an environment-friendly agriculture system that is profitable in nature. This will help the Indian economy grow.

Also, investment in business, easy bureaucratic processes, skilled development programmes, and research and development initiatives, will help in creating favourable conditions for the growth of the Indian economy.

Thus, to uplift the Indian economy, it is necessary to maintain a mutually beneficial partnership between the government and the agriculture and manufacturing sectors. The agriculture sector can grow by overcoming the challenges in farming practices. Whereas, the industrial sector will expand due to strategic investments and progressive policies.

Also Read: Indian Students Adding to the UK Economy

500 words Essay on Indian Economy

Policies for the growth of the Indian economy aim at overcoming poverty, reducing wealth gaps, and optimising productivity. The main purpose of bridging the wealth gap between different sections of society is to improve the overall well-being of its population for sustainable economic development.   

1. Overcome of Poverty

As per the Niti Aayog report of July 17, 2023, there is a decrease in the population of people vulnerable to poverty. The percentage of decline is from 24.8 percent to 14.9 percent for four consecutive years, from 2015-2016 to 2019-2021. However, the government is implementing various policies such as the National Education Policy, 2020 (NEP), the National Health Policy, the National Employment Policy (NEP) and many more important programs and policies to decrease the numbers of percentage so that there can be boosted in education, healthcare, and employment opportunities can be raised. 

More educated people with good health will better contribute to the Indian economy. Moreover, creating jobs and small businesses will also lead to increased income levels help reduce poverty and encourage economic growth.

2. Reduction of Wealth Gaps

The second important factor in the rise of the Indian economy is reducing the gap between the poor and the rich. To address the wealth gap, various programmes and schemes, such as the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) and the Pradhan Mantri Jan Dhan Yojna (PMJDY), are implemented. Furthermore, to support business innovators from minority communities, small-scale financing is provided through MUDRA Bank.

For social security, initiatives such as Pradhan Mantri Jeevan Jyoti Yojana and Pradhan Mantri Jeevan Jyoti Yojana are given to encourage social security. These initiatives contribute not only to narrowing the wealth gap through the even distribution of resources but also to establishing a pathway for economic growth in the Indian economy.

3. Fewer Labour Inputs and More Productivity

To encourage both domestic and international companies to invest in the Indian economy, particularly in manufacturing, and innovation, and more importantly, to achieve higher productivity with less input initiatives such as Make in India are encouraged, which not only helps for advancement in technology but also aid in mastering the skills.

The aim of the government of India’s Make in India scheme is to increase productivity and efficiency and reduce dependence on manpower across the different sectors of the Indian economy.

4. Abundance of Goods and Services

The rise in the production of goods and services for a certain period as compared to a previous period helps in the contribution of increased consumption by promoting market competitiveness and driving the innovation of an Indian economy.

Providing consumers with a good number of goods and services not only helps in catering choices but also creates opportunities for boosting business. An Indian economy with a steadfast supply of goods and services leads to stability of prices and improvement in the standard of living of the people.

In conclusion, addressing poverty, reducing the wealth gaps, increasing productivity with fewer labour inputs, and ensuring an abundant supply of goods and services helps in developing the Indian economy. The Indian government is actively implementing policies and technological advancements to encourage these factors and continually revising them to create a broad and steady Indian economy.

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Ans. GDP = Consumption + Investment + Government Spending + Net Exports or  GDP = C + I + G +NX. Here, (C) is the consumption that represents private-consumption expenditures by households and nonprofit organizations, (I) is the investment that refers to business expenditures by businesses and home purchases by households, government spending, (G) denotes expenditures on goods and services by the government, and net exports (NX) represents a nation’s exports minus its imports.

Ans. Low per capita income, large population, the service sector and diverse sectors such as manufacturing and agriculture are characteristics of the Indian economy.

Ans. Pandit Jawaharlal Nehru is the father of the Indian economy. 

Ans. Agriculture is the backbone of Indian economy as it helps in providing raw materials as well as raw materials to the various industries. 

Ans. The full form of GDP is Gross Domestic Production.

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Deepika Joshi

Deepika Joshi is an experienced content writer with expertise in creating educational and informative content. She has a year of experience writing content for speeches, essays, NCERT, study abroad and EdTech SaaS. Her strengths lie in conducting thorough research and ananlysis to provide accurate and up-to-date information to readers. She enjoys staying updated on new skills and knowledge, particulary in education domain. In her free time, she loves to read articles, and blogs with related to her field to further expand her expertise. In personal life, she loves creative writing and aspire to connect with innovative people who have fresh ideas to offer.

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Washington [US], April 9 (ANI): Increased private consumption and declining inflation are supporting an economic rebound in Sub-Saharan Africa, but the recovery remains fragile due to uncertain global economic conditions, growing debt service obligations, frequent natural disasters, and escalating conflict and violence, according to World Bank’s latest Africa’s Pulse report.

The multinational bank suggested transformative policies were needed to address deep-rooted inequality to sustain long-term growth and effectively reduce poverty.

According to the world bank report, growth in the region is expected to rebound in 2024, rising from a low of 2.6 percent in 2023 to 3.4 percent in 2024, and 3.8 percent in 2025.

However, this recovery remains tenuous, it asserted.

While inflation is cooling across most economies, falling from a median of 7.1 to 5.1 percent in 2024, it remains high compared to pre-COVID-19 pandemic levels.

Additionally, while growth of public debt is slowing, more than half of African governments grapple with external liquidity problems, and face unsustainable debt burdens.

Overall, the report underscored that despite the projected boost in growth, the pace of economic expansion in the region remained below the growth rate of the previous decade (2000-2014) and is insufficient to have a significant effect on poverty reduction.

Moreover, due to multiple factors including structural inequality, economic growth reduces poverty in Sub-Saharan Africa less than in other regions.

“Per capita GDP growth of 1 percent is associated with a reduction in the extreme poverty rate of only about 1 percent in the region, compared to 2.5 percent on average in the rest of the world,” said Andrew Dabalen, World Bank Chief Economist for Africa.

“In a context of constrained government budgets, faster poverty reduction will not be achieved through fiscal policy alone. It needs to be supported by policies that expand the productive capacity of the private sector to create more and better jobs for all segments of society.”

The World Bank’s Africa’s Pulse report called for several policy actions to foster stronger and more equitable growth. These include restoring macro-economic stability, promoting inter-generational mobility, supporting market access, and ensuring that fiscal policies do not overburden the poor. (ANI)

This report is auto-generated from ANI news service. ThePrint holds no responsibility for its content.

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PAKISTAN: Implementing an Ambitious, Credible and Clearly Communicated Economic Reform Plan Critical for Robust Recovery, Poverty Reduction, says World Bank

ISLAMABAD, April 2, 2024 —Pakistan’s economy is expected to grow by only 1.8 percent in the current fiscal year ending June 2024. According to World Bank’s latest Pakistan Development Update: Fiscal Impact of Federal State-Owned Enterprises released today, this subdued recovery reflects tight monetary and fiscal policy, continued import management measures aimed at preserving scarce foreign reserves, and muted economic activity amid weak confidence. The Update also highlights the high fiscal costs of federal state-owned enterprises (SOEs) and the critical reforms needed to improve their performance, efficiency, and governance, including via privatizations.

After a contraction in FY23, economic activity has strengthened over the first half of FY24 on the back of strong agricultural output. This, together with improved confidence, also supported some recovery in other sectors. But growth remains insufficient to reduce poverty, with 40 percent of Pakistanis now living below the poverty line. Macroeconomic risks remain very high amid a large debt burden and limited foreign exchange reserves.

“The structural reforms needed to durably improve the economic outlook are known. Developing a clearly articulated reform implementation plan that is ambitious, credible and that shows quick progress is now essential to restore confidence," said Najy Benhassine, World Bank Country Director for Pakistan.  “In particular, better fiscal management will help to lower inflation, narrow the current account deficit, improve financial sector stability and increase credit to the private sector, all of which are critical for robust economic recovery.”

A sustained medium-term recovery will require a prudent macroeconomic policy mix coupled with reforms to improve the quality of expenditures, broaden the tax base, address regulatory constraints to private sector activity, reduce state presence in the economy—including via privatizations, address challenges in the energy sector, and increase public investments to improve human development outcomes.

The Update includes a list of key reforms in ten areas that should be considered for priority implementation to initiate a strong, durable, and poverty-reducing economic growth recovery.

“The current macroeconomic outlook projects growth that is below Pakistan’s potential, with little poverty reduction and continued erosion of living standards,” said Sayed Murtaza Muzaffari, lead author of the report . “Risks to this outlook remain high, including uncertainty around policy commitments and reform implementation, financial sector risks, potential increases in world energy and food prices in the context of intensification of regional geopolitical conflicts, slower global growth, and tighter than expected global financing conditions .”

The Update highlights the high fiscal costs of SOEs operating in key sectors of the economy. These SOEs have been consistently making losses since 2016, and the government has been providing significant financial support through subsidies, grants, loans, and guarantees, leading to large and growing fiscal exposure.

“Direct government support to SOEs in the form of subsidies, loans, and equity investments accounted for 18 percent of the federal budget deficit and 2 percent of GDP in FY22,” said Qurat Ul Ain Hadi, co-author of the report .

To contain fiscal exposure from SOEs, the report recommends rapid progress with government plans for privatization, restructuring, and divestment—per the 2021 Triage plan. In addition, the Update recommends establishing new guarantee issuance rules, mitigating credit risks, ensuring adherence to International Financial Reporting Standards, and developing risk monitoring procedures. All SOEs, including those under the State Wealth Fund (SWF), should be covered under the purview of the SOE Act to ensure financial transparency and good corporate governance practices.

The Pakistan Development Update is a companion piece to the  South Asia Development Update , a twice-a-year World Bank report that examines economic developments and prospects in the South Asia region and analyzes policy challenges countries face. The April 2024 edition titled  Jobs for Resilience  shows growth in South Asia is again higher than any other developing country region in the world at 6 percent in 2024, but that persistent structural challenges threaten to undermine sustained growth. This is hindering the region’s ability to create jobs and respond to climate shocks. The report explores pathways countries can take to sustain long-term growth and reduce climate risks by boosting employment and increasing private investment.

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