Poverty in India

Why in News?

The World Bank has recently published a report titled Poverty Prosperity and Planet Pathways out of the Polycrisis. The report is the first to give the post pandemic report on the worlds progress toward poverty reduction prosperity and environment related goals.

Highlights of Report

• Global Poverty Reduction Has Stalled
  • Over the past five years the degree of global poverty reduction has stalled due to the so called polycrisis that is the slowdown of the economies fragility climate risks and uncertainty.
• Polycrisis Impact
  • The interlinked crisis situation has made national development policies and international cooperation complicated.
  • A polycrisis, coined by French philosopher Edgar Morin as the term for the situation in which multiple crises overlap and intensify each other, making the situation complicated and difficult to manage. This term was coined in his 1993 book, Terre-Patrie.
  • Causes of a polycrisis include economic recessions, political instability, natural disasters, and globalization.
• Global Poverty Estimates
  • The projection of the extreme poverty population will be 7.3% for 2030 which is double the target set by the World Bank of 3%.
• Global Prosperity Gap
  • Inclusive growth in income remains stagnant worsening the prosperity gap Income needs to be multiplied drastically to meet a global prosperity benchmark of 25 per person per day.
• Progress in India
  • Indians living in extreme poverty has fallen dramatically from 431 million back in 1990 to 129 million in 2024 based on a definition of extreme poverty as living on less than Rs.215 per day.

Causes of Poverty in India

• Historical Causes
  • Colonial exploitation destroyed the local industries and caused deindustrialization and the drain of wealth which deepened poverty.
  • These factors are low agricultural productivity due to broken up landholdings less capital and the traditional practices in use rapid population increase leading to stress on resources further deepening the problem of poverty. Economic inequalities because of inequality of income and concentration of wealth by the top minority, social exclusion mainly because of gender and caste leading to excluded groups not receiving their due resources and opportunities.
• Geographical Inequality
  • Repeated floods in Assam and Bihar displace millions and drive them into further poverty.

Poverty Trends in India Current Situation According to NITI Aayog

• Poverty Headcount Ratio
  • The figure has decreased to 1128 for the period 2022-23 from 2917 for 2013-14.
• Number of People Taking Away Multidimensional Poverty
  • Within the last nine years 2482 crore Indians escaped multidimensional poverty.
• Quickest Reduction in Poorer States
  • The quickest reduction in poverty has been recorded in states like Uttar Pradesh, Bihar, Madhya Pradesh, Odisha and Rajasthan.
• On Track to SDG Target 12
  • India is on track to meet the SDG goal of reducing multidimensional poverty by half much before 2030.

History of Poverty Estimation in India

• Pre Independence
  • Dadabhai Naoroji and the Bombay Plan set the stage for estimating poverty in India.
• Post Independence
  • Committees like the Planning Commission and Alagh Committee have been crucial in poverty measurement and poverty line definitions.
• Post2000s
  • Tendulkar Committee 2009: Recommended that the country move away from calorie based poverty lines adopting the Mixed Reference Period (MRP) for expenditure estimates.
  • Rangarajan Committee 2014: It reverted to separate rural and urban lines of poverty but the government did not turn its recommendations into action.

Key Terminologies Relating to Poverty

• Absolute Poverty
  • Extreme lack of basic human needs like food and clean water. This is defined by a minimum cost in order to meet basic needs.
• Relative Poverty
  • This is defined by the economic status of others in society where people are considered poor if they fall below societal living standards.
• Poverty Rate
  • The percentage of the population living below the poverty line.
• Intensity of Poverty
  • This measures how severe poverty is for those living below the poverty line.
• Multidimensional Poverty Index (MPI)
  • An overall index that takes into account various aspects of poverty other than monetary aspects which includes education health and standard of living.

Policies to Reduce Poverty in India

• Economic Security
  • Schemes such as Ayushman Bharat Yojana and PM Bharatiya Janaushadhi Pariyojana.
• Social Security
  • Which also encompasses the following like Pradhan Mantri Garib Kalyan Anna Yojana and PM Matru Vandana Yojana.
• Financial Inclusion
  • PM Jan Dhan Yojana and Atal Pension Yojana.
• Employment and Skill Development
  • PM Kaushal Vikas Yojana, Mahatma Gandhi National Rural Employment Guarantee Scheme etc.
• Entrepreneurship
  • PM MUDRA Yojana, PM SVANidhi Deendayal Antyodaya Yojana, Supporting small enterprise and entrepreneurship development.

NITI Aayog’s Recommendations to Reduce Poverty

• Employment Intensive Growth
  • Creating better jobs and generating additional revenues for social welfare programs. A second green revolution in agriculture is recommended particularly in eastern India.
• Effective Anti Poverty Programs
  • Improve targeting of programs using technologies like the JAM trinity, Jan Dhan, Aadhaar Mobile to reduce inclusion and exclusion errors.
• Capability Approach of Amartya Sen
  • Investment in peoples capabilities through education and skills development and hence citizen empowerment and poverty reduction. For example the slum dwellers will be empowered for entrepreneurship and consequently urban poverty reduction.

UPSC Civil Services Examination, Previous Year Question (PYQ)

Prelims

Q.In a given year in India, official poverty lines are  higher in some States than in others because (2019)

(a)  poverty rates vary from State to State

(b) price levels vary from State to State

(c) Gross State Product varies from State to State

(d) quality of public distribution varies from State to State

Ans (b)

Q. The Multi-dimensional Poverty Index developed by Oxford Poverty and Human Development Initiative with UNDP support covers which of the following?(2012)

1. Deprivation of education, health, assets and  services at household level
2. Purchasing power parity at national level
3. Extent of budget deficit and GDP growth rate at national level

Select the correct answer using the codes given below:

(a) 1 only

(b) 2 and 3 only

(c) 1 and 3 only

(d) 1, 2 and 3

Ans (a)

Mains

Q. Though there have been several different estimates of poverty in India, all indicate reduction in poverty levels over time. Do you agree? Critically examine with reference to urban and rural poverty indicators (2015)