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Poverty in India

Introduction: Poverty refers to a situation when people are deprived of basic necessities of life. It is often characterized by inadequacy of food, shelter and clothes. In other words, poverty refers to a state of privation where there is a lack of essential needs for subsistence.

India is one of the poorest countries in the world. Many Indian people do not get two meals a day. They do not have good houses to live in. Their children do not get proper schooling.

Poor people are the depressed and deprived class. They do not get proper nutrition and diet. Their conditions have not sufficiently improved even long after over 65 years of our Independence.

Poverty in urban India: Just like most of the growing and developing countries, there has been continuous increase in Urban population.

  • Poor people migrate from rural areas to cities and towns in search of employment/financial activity.
  • The income of more than 8 crore urban people is estimated to fall below poverty line (BPL).
  • In addition to this, there are around 4.5 crore urban people whose income level is on borderline of poverty level.
  • A income of urban poors is highly unstable. A large number of them are either casual workers or self-employed.
  • Banks and Financial institutions are reluctant to provide them loan because of the unstable income.
  • Five states that constitutes around 40% of all urban poor people of India are Uttar Pradesh, Bihar, Rajasthan, Odisha, and Madhya Pradesh.
  • Around 35% of the total population of the four metro cities (Delhi, Kolkata, Chennai and Mumbai) consists of slum population.
  • A large portion of people living in slums are illiterate.
  • The initiatives taken to deal with the problem of urban poverty has not yielded the desired results.

Poverty in rural India: It is said that rural India is the heart of India. In reality, the life of people living in rural areas is marked with severe poverty. Inspite of all the efforts, the condition of poor villagers is far from satisfactory. The report on Socio-economic and Caste Census (2011) reveal the following facts:

  • SCST: Of all the rural households, around 18.46 percent belongs to scheduled castes, and around 10.97 belongs to scheduled Tribes.
  • Major source of income: Manual causal labour jobs and cultivation are the major sources of income for rural people. Nearly 51 percent of all households are economically engaged in manual casual labour and nearly 30 percent of them is engaged in cultivation.
  • Deprived: Around 48.5 percent of rural households are deprived according to the census.
  • Assets: Only 11.04 percent of families own a refrigerator while there is a vehicle (including two-wheeler, boat, etc. )in around 29.69 percent of the rural houses.
  • Income Tax: Only 4.58 percent of rural households pay income tax.
  • Land ownership: Around 56 percent of village households doesn’t own a land.
  • Size of rural houses: The houses of around 54 percent rural families consists of either one or two-rooms. Out of them, around 13 percent lives in a one-room house.

Causes of poverty

The growing population inflates the problem of poor techniques used in Agriculture. Further, there is unequal distribution of wealth. As a result, the poor people are often exploited by the wealthy community. The most important causes of Poverty in India are poor agriculture, growing Population, gap between rich and poor, corruption and black money.

Poor agriculture: India is mainly an agricultural country. About 80% people of our country depend on agriculture. But our agriculture is in a bad way. Farmers are poor and uneducated. They do not know the modern methods of farming. They have no good facilities of irrigation. They do not get seeds and fertilizers in time. Thus, the yield is poor. Agriculture is not profitable today. We face the shortage of food. We have to import it. So, poor agriculture is one of the causes of India’s poverty.

Growing population: Our population is growing rapidly. But our resources are limited. The growth in population creates problems for us. Today, our population is 1.20 billion; tomorrow we will be 1.21 billion and so on. We need more food, more houses, and more hospitals for them. So we have no money to spend on development projects. The ever-growing rate of population must be checked. If not, we may not be able to remove India’s poverty.

Gap between the rich and the poor: The widening gap between the rich and the poor is also responsible for India’s poverty. The rich are growing richer. The poor are growing poorer. This economic gap between the two must be reduced. Our social system should be changed. The poor people must get all help to reap the fruits of Independence.

Corruption and black-money: There are corruptions in every walk of life. There is inefficiency in offices. People have become selfish. They neglect the national interests. Black money causes the problem of rising prices. Some people have all the privileges. But many others are suffering. Black money affects our economy. It causes poverty.

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FAQs on Poverty - Problems of growth, Business Environment - Business Environment - B Com

1. What are the main problems of poverty?
Ans. The main problems of poverty include limited access to basic necessities such as food, healthcare, education, and shelter. Poverty also leads to social exclusion, lack of opportunities for upward mobility, and increased vulnerability to various risks and challenges.
2. How does poverty affect economic growth?
Ans. Poverty can hinder economic growth as it reduces the overall productivity of a nation. When a significant portion of the population lives in poverty, they are unable to contribute effectively to the economy, leading to a decrease in overall output and consumption. Additionally, poverty can also result in increased government spending on social welfare programs, which can strain public finances and hinder economic development.
3. What is the role of the business environment in addressing poverty?
Ans. The business environment plays a crucial role in addressing poverty. By creating job opportunities and promoting economic development, businesses can contribute to poverty reduction. A favorable business environment, characterized by supportive policies, infrastructure development, and access to capital, can attract investments and stimulate economic growth, leading to poverty alleviation.
4. How can the business environment be improved to tackle poverty effectively?
Ans. To improve the business environment for poverty alleviation, governments can implement policies that promote entrepreneurship, provide financial and technical support to small and medium-sized enterprises, and enhance access to credit for aspiring entrepreneurs. Enhancing infrastructure, reducing bureaucratic hurdles, and ensuring transparency and accountability in business practices can also facilitate economic growth and poverty reduction.
5. What are some examples of successful poverty reduction initiatives driven by the business environment?
Ans. One example of a successful poverty reduction initiative driven by the business environment is microfinance. Microfinance institutions provide small loans and financial services to individuals who are unable to access traditional banking services. By empowering individuals to start or expand their businesses, microfinance has proven effective in lifting people out of poverty. Other examples include public-private partnerships for infrastructure development, corporate social responsibility initiatives aimed at improving education and healthcare, and inclusive business models that integrate marginalized communities into value chains.
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