Class 9 Economics Chapter 3 Notes - Poverty as a Challenge

Introduction

In our daily life, we see poverty all around us. They could be landless labourers in villages, people living in overcrowded jhuggis in cities, daily wage workers or child workers in dhabas. According to facts, in India, every fourth person is poor.

One of the biggest challenges for independent India has been lifting millions of its citizens out of severe poverty. This is a critical issue that both the government and experts are striving to address. Mahatma Gandhi believed that India would only be truly independent when the poorest people were free from suffering.

What is Poverty?

Poverty involves hunger and the lack of shelter. It is a situation where parents cannot send their children to school or where sick individuals cannot afford medical care.

Poverty also signifies the absence of clean water and sanitation facilities and a lack of regular employment at a decent minimum level. Those who are poor often face mistreatment in various places, including farms, factories, government offices, hospitals, and railway stations.

Two Typical Cases of Poverty

• Poverty is the condition where individuals or communities do not have enough resources to meet a basic standard of living.
• It often includes issues like hunger, no proper shelter, limited access to clean water and sanitation, and a lack of job opportunities.
• In independent India, poverty is a major concern, as the country can only be truly independent when its poorest citizens do not suffer.
• Poverty is a complex issue that impacts many areas of life.

Urban Case

• Ram Saran is a thirty-three-year-old daily wage labourer at a flour mill near Ranchi, Jharkhand.
• He earns about Rs 1,500 a month when he can find work, which is infrequent.
• This amount is not enough to support his family of six, including his wife and four children aged from 12 years to six months.
  Story of Ram Saran
• After paying rent, there is no money left for his elderly parents living in the village.
• The family resides in a one-room rented house on the city's outskirts.
• The children are under nourished and lack proper clothing, shoes, and healthcare access.

Rural Case

• Lakha Singh, a landless laborer near Meerut, Uttar Pradesh, earns Rs 50 a day doing odd jobs and often receives food instead of cash.
• His family of eight struggles to afford two meals a day and lives in a kuchha hut.
• Lakha never attended school due to early work responsibilities, starting at age 10.
• His father died of untreated tuberculosis, and now his mother suffers from the same illness.
• Poverty leaves them without access to healthcare, basic needs, or education.
• Hunger, inadequate shelter, lack of clean water, and unstablejobsdefine their lives.
• Poverty also brings helplessness and poor treatment in workplaces and public spaces.
• India's ongoing challenge is to lift millions out of severe povert

Poverty as Seen by Social Scientists

Poverty is usually assessed by looking at income and spending. However, modern discussions also include other important factors like education, health, job opportunities, and access to clean water and sanitation. More recently, the analysis of poverty focuses on aspects such as social exclusion and vulnerability.

Analysis of Poverty 

Social Exclusion 

• Poverty is not just about having low income; it also involves living in poor conditions and being excluded from the advantages that wealthier individuals have.
• Social exclusion can lead to poverty and can have more serious consequences than merely having a low income.
• Certain individuals or groups may be systematically denied access to services, benefits, and opportunities enjoyed by others.
• For instance, the caste system in India exemplifies social exclusion by preventing specific castes from having equal opportunities and social equality.

Vulnerability

Vulnerability refers to the higher likelihood of being negatively impacted compared to others when facing adverse events like floods, earthquakes, or job shortages. Several factors influence vulnerability:

• Community and Individual Factors: Members of disadvantaged communities (such as backward castes) or individuals with specific challenges (like widows or those with disabilities) are often more vulnerable.
• Options and Resources: Access to assets, education, healthcare, and job opportunities greatly affects vulnerability.
• Risk Exposure: Greater vulnerability is linked to increased risks from natural disasters (like earthquakes and tsunamis) and other crises.

Additionally, many researchers suggest expanding the definition of poverty to include human poverty, which covers not only income but also aspects like education, housing, healthcare, job security, self-esteem, and freedom from discrimination based on caste or gender. 

Poverty Line

• Definition of Poverty Line: The poverty line is based on the income or consumption levels, indicating the minimum necessary to meet basic needs. It varies across time and countries.

• Variation by Country: The poverty line depends on the country’s development level and social norms. For example, owning a car may signify poverty in the U.S., but not in India, where it's considered a luxury.

• Poverty Line in India: In India, the poverty line is determined based on basic needs such as food, clothing, footwear, fuel, light, education, and healthcare. Physical quantities of these needs are multiplied by their prices to determine the required income.

• Calorie Requirements: The poverty line also considers calorie requirements, with rural areas requiring 2400 calories per person per day and urban areas 2100 calories per day, due to higher physical work in rural areas.

  Pop of India above & below Poverty Line

• Monetary Calculations: For 2011–12, the poverty line was Rs 816 per month in rural areas and Rs 1000 in urban areas, adjusted for price variations.

• Family Income: A family of five earning below Rs 4,080 per month in rural areas and Rs 5,000 in urban areas in 2011-12 would fall below the poverty line.

• Periodic Surveys: The National Sample Survey Organisation (NSSO) conducts periodic surveys (every five years) to estimate the poverty line in India.

• International Comparisons: For global comparisons, organizations like the World Bank use a standard poverty line of $1.90 per person per day (2011, PPP).

Poverty Estimates

• There has been a significant drop in poverty ratios in India, from about 45 percent in 1993-94 to 37 percent in 2004-05. The number of people living in poverty decreased from 407 million in 2004-05 to 270 million in 2011-12, with an average annual decline of 2.2 percentage points during this time.
• The way poverty is reduced varies between rural and urban areas of India, which shows the need for specific strategies to tackle poverty.
• If this trend continues, the percentage of people below the poverty line could fall to less than 20 percent in the coming years.

Vulnerable Groups

• The number of people living below the poverty line varies across different social and economic groups in India. The most affected groups are those from the Scheduled Caste and Scheduled Tribe households.
• In terms of economic status, the groups most at risk are rural agricultural labour households and urban casual labour households.
• While the overall average of people below the poverty line in India is 22%, 43 out of 100 individuals from Scheduled Tribes struggle to meet their basic needs. Likewise, 34% of casual workers in cities live in poverty. Additionally, around 34% of casual labourers in rural areas and 29% of those from Scheduled Castes are also poor.
• The severe challenges faced by landless casual wage labour households from socially disadvantaged groups, such as Scheduled Castes or Scheduled Tribes, illustrate the gravity of the issue. Recent studies indicate that, apart from Scheduled Tribe households, all other groups—Scheduled Castes, rural agricultural labourers, and urban casual labour households—have experienced a decline in poverty since the 1990s.
• Women, the elderly, and female infants often lack equal access to resources within their families. Although all family members in poor households face hardship, some experience greater suffering. As a result, women, children (especially girls), and the elderly are among the most impoverished.

Story of Sivaraman

• Sivaraman resides in a small village close to Karur town in Tamil Nadu. He belongs to the Aryunthathiyar caste (cobbler) and currently works as an agricultural labourer earning Rs 160 per day, but this only lasts for five to six months a year. At other times, he takes on various odd jobs in town.
• His family consists of eight members. Sivaraman's wife, Sasikala, works alongside him but struggles to find employment. When she does work, she earns only Rs 100 per day for the same tasks as Sivaraman.
• Due to their financial situation, their children do not attend school. The girls are not sent to school and often miss out on basic nutrition, while their youngest child, a son, occasionally receives milk. The parents aspire for his education, reflecting the inequality within the family.
• The family faces considerable difficulty in managing even two meals a day, highlighting the extreme economic hardships they endure.

Story of Sivaraman

Inter-State Disparities

• Recent estimates show that in 2011-12, the all-India Head Count Ratio (HCR) was 21.9%, with states like Bihar (33.7%) and Odisha (32.6%) having the highest poverty rates, well above the national average. 
• Urban poverty is also high in Odisha, Madhya Pradesh, Bihar, and Uttar Pradesh. On the other hand, Kerala, Maharashtra, Andhra Pradesh, Tamil Nadu, Gujarat, and West Bengal have seen significant reductions in poverty. 
• Punjab and Haryana maintain low poverty due to strong agricultural growth, while Kerala focused on human resource development and West Bengal enacted crucial land reforms. Andhra Pradesh and Tamil Nadu improved poverty ratios through effective public distribution systems.

Poverty Among Social Groups

The percentage of people living below the poverty line varies among different social groups and economic categories in India. The most vulnerable groups include households from Scheduled Castes and Scheduled Tribes, along with rural agricultural labour households and urban casual labour households.

Poverty Ratio in the Selected Indian States- 2011 Census

Global Poverty Scenario

• The percentage of people living in severe economic poverty, which the World Bank defines as living on less than $2.15 per day, has decreased from 16.27 percent in 2010 to 9.05 percent in 2019. Despite this significant reduction in global poverty, there are notable differences between regions.
• Poverty has dropped sharply in China and Southeast Asia due to rapid economic growth and large investments in human development. In China, the poverty rate fell from 2.1 percent in 2014 to 1.2 percent in 2015, and further to 0.1 percent in 2020.
• In South Asia (which includes India, Pakistan, Sri Lanka, Nepal, Bangladesh, Bhutan, Afghanistan, and the Maldives), the rate has also fallen quickly, from 12.8 percent in 2017 to 10.9 percent in 2021. The number of poor people in this region has decreased from 233 million in 2017 to 207 million in 2021.
• In Sub-Saharan Africa, the poverty rate went down from 36.6 percent in 2017 to 35.4 percent in 2019.
• In Latin America and the Caribbean, however, the poverty rate increased from 4.4 percent in 2017 to 4.6 percent in 2021.
• Poverty has also returned in some former socialist countries like Russia, where it was previously not an issue.
• The new sustainable development goals set by the United Nations aim to eliminate all forms of poverty by 2030.

Global Poverty Index 

Causes of Poverty

• Historical Context: A key historical factor contributing to poverty is the low level of economic development during the British colonial period, which harmed traditional crafts and hindered industrial growth.
• Population Growth: Rapid population growth alongside slow economic progress has resulted in a very low increase in income per person, which has continued to fuel poverty. 

• Urban Poverty: Initially a rural issue, poverty is now prevalent in urban areas, with many living in slums due to lack of jobs.

• Irrigation and Green Revolution: While the Green Revolution created agricultural jobs, benefits were limited to specific regions, leaving many unemployed in this sector.

• Insufficient Job Creation: Limited job opportunities in both the public and private sectors lead to low-income jobs and slum living.

• Unequal Resource Distribution: Imbalances in land and resource distribution result in high poverty and income inequality.

• Ineffective Land Reforms: Land reforms aimed at redistribution have been poorly implemented, failing to reduce rural poverty.

• Social and Religious Expenses: The poor often incur social and religious expenses, worsening their financial strain.

• Indebtedness: Small farmers and the poor often borrow money for farming and basic needs, but high debt traps them in poverty.

Anti Poverty Measures

Objective: India's development strategy aims to remove poverty, focusing on economic growth and targeted anti-poverty programs.

• Historical Context: For 30 years until the early 1980s, India had low per capita income growth and little poverty reduction. Official poverty rates were about 45% in the 1950s and remained stagnant until the early 1980s.

• Economic Growth: Since the 1980s, India's economic growth has accelerated, reaching about 6% during the 1980s and 1990s, significantly contributing to poverty reduction. Economic growth expands opportunities and provides the resources for investing in human development, including education.

• Agriculture and Poverty: Growth in agriculture has been slower than expected, impacting the rural poor, who depend on agriculture for their livelihood.

Targeted Anti-Poverty Programs: There is a need for targeted poverty programs to address the shortcomings of economic growth in benefiting the poor.

• Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) (2005): Provides 100 days of wage employment per household in rural areas, promoting sustainable development and reserving one-third of jobs for women.
• Employment to 4.78 crore households, with 23% SC, 17% ST, and 53% women participation.
• The average wage increased from Rs. 65 in 2006-07 to Rs. 132 in 2013-14, with recent wage revisions up to Rs. 281/day in Haryana.
  

Other Key Schemes:

• Prime Minister Rozgar Yojana (PMRY) (1993): Aims to create self-employment for educated youth in rural areas and small towns.
• Rural Employment Generation Programme (REGP) (1995): Targets self-employment in rural areas, aiming to create 25 lakh new jobs.
• Swarnajayanti Gram Swarozgar Yojana (SGSY) (1999): Assists poor families through self-help groups using bank credit and government subsidies.
  
• Pradhan Mantri Gramodaya Yojana (PMGY) (2000): Provides central assistance to states for basic services like health, education, rural shelter, drinking water, and electrification.
• Antyodaya Anna Yojana (AAY): Aimed at providing food security to the poorest families.

Challenges in Implementation: Effectiveness varies due to inadequate implementation and improper targeting.

• Overlapping schemes and insufficient monitoring limit benefits to those in need.
• Recent initiatives focus on improving program monitoring to enhance effectiveness.
• Certain social and economic groups are more susceptible to poverty, highlighting the need to understand its dynamics.

The Challenges Ahead

• Poverty has decreased but remains a significant challenge.
• Disparities exist between rural and urban areas and among states.
• Future reduction depends on economic growth, universal education, population control, and empowerment of women and disadvantaged groups.
• Official poverty definition focuses on “minimum” standards; experts propose including human poverty indicators like education, housing, and essential services.
• Antyodaya Anna Yozana (AAY) ensures food security but faces implementation and targeting challenges.
• Overlap in schemes and poor monitoring limit program effectiveness.
• Achieving gender equality and dignity for the poor is crucial.