Poverty and Development Issues | Indian Society for UPSC CSE PDF Download

Poverty is a multidimensional phenomenon in which a person or community lacks the financial resources and essentials for a minimum standard of living.
According to the World Bank, Poverty is pronounced deprivation in well-being, and comprises many dimensions. It includes low incomes and the inability to acquire the basic goods and services necessary for survival with dignity. Poverty also encompasses low levels of health and education, poor access to clean water and sanitation, inadequate physical security, and insufficient capacity and opportunity to better one’s life.
In India, 21.9% of the population lived below the national poverty line in 2011.

• Development: It is defined as the “improvement in a country's economic and social conditions”. It refers to improvements in the way of managing an area’s natural and human resources in order to create wealth and improve people’s lives.

Causes of Poverty

• Inadequate access to clean water and nutritious food: At this time, over 2 billion people lack access to safe water at home, and over 800 million people are food insecure.
• Low or no access to jobs or living means: It may result in poverty.
• Violence and Conflict: Large-scale violence has the potential to make people poor by forcing them to sell or leave behind all of their assets, paralysing society, destroying infrastructure, and driving people out of their homes.
• Inequality among people: Inequality, ranging from economic disparities to societal divisions based on factors like caste or gender.
• Poor education facilities: The vast majority of the poor lack formal education facilities. According to UNESCO, 171 million people may be rescued from extreme poverty if they graduated from high school with rudimentary reading abilities
• Climate Change Threat: According to the World Bank, during the next ten years, climate change has the potential to impoverish more than 100 million people.
• Poor infrastructure: Communities in rural locations are not able to grow due to a lack of infrastructure, which includes things like roads, bridges, and wells as well as cables for internet, cell phones, and light.

Poverty as a Social Problem 

• Family Issues: Because of their circumstances, poor families experience extra stress, and not able to focus on growth.
• Health, Illness, and Medical Care: Along with receiving poor quality medical care, the poor are also more prone to experience a variety of health issues, such as early adult death, mental illness, and infant mortality.
• Illiteracy: Poor children's lack of education further consigns them and their children to illiteracy, perpetuating the cycle of poverty for future generations.
• Lack of Housing: Many low-income families spend more than half of their income on rent, and they frequently reside in underdeveloped areas with few job possibilities, high-quality schools, and other amenities.
• High Crime: Poor people account for the bulk of our street crime and they also account for the bulk of victims.

Manifestations of poverty include:

• Hunger and malnutrition
• Social discrimination
• Social exclusion
• Lack of participation in decision-making

Impact of Poverty 

• Violence and High Crime Rate: Poor people generally engage in bad habits like prostitution, and stealing, and criminal activity like chain snatching due to unemployment and marginalisation.
• Homelessness and begging: Homeless poor people sleep on the roadsides at night. This makes the entire scenario very unsafe for women and children.
• High Stress: Poor people suffer from a lot of stress which leads to a reduction in the productivity of individuals.
• Child Labour: Poor people send their kids to work rather than to education because of poverty. Children in low- income families only begin to earn money on average when they are 5 years old.
• Terrorist Activities: Typically, terrorist actions target and involve children from low-income homes.
• Effect on the economy: Poverty is directly proportional to the success of the economy. The headcount ratio living in poverty is reflective of how powerful the economy is.
• High IMR: High IMR due to inadequate money for medical facilities.
• Child Marriage: It is practised in many Indian regions. Young girls, who are still children, become mothers too early and die at birth. Studies show that poor girls are 2.5 times more likely to marry in childhood than those living in the wealthiest quintile.
• Malnutrition: India is on top when it comes to malnutrition; more than 200 million people lack to get sufficient food, including 61 million children.

In India, Rural poverty is higher than urban poverty, but the gap is closing.

Reasons for Shifting of Poverty from Rural to Urban INDIA

• Push-Pull factors: In India, the causes of urban poverty is related to the inadequate infrastructure in rural areas (push factor), which causes forced migration to cities (pull factor).
• Lack of skills: Most of the poor are not skilled because of this they are not able to participate in the emerging employment opportunities in different sectors of the urban economy as they do not have the necessary knowledge and skills to do so.
• High Debt: Unemployment or underemployment and the casual nature of work in urban areas lead to high debt, which in turn, reinforces poverty.
• Increasing Inflation: It intensifies the hardship and deprivation of lower-income groups.
• Unequal distribution of resources: The uneven distribution of income and assets has caused chronic poverty in urban India.
• Unsatisfactory growth: The growth of agriculture and industry has not been impressive. The gap between the poor and the rich has actually widened.
• Asymmetrical development: The green revolution exacerbated the disparities regionally and between large and small farmers. The benefits of economic growth have largely not trickled down to the poor.
• Urbanisation of poverty: The migration of the rural poor into cities for a better livelihood
• Rural poverty: It directly affects urban poverty because most urban poor are rural migrants. These people have been driven out of their villages due to poverty there.

Multidimensional Poverty 

• Historically, poverty estimation was done by mainly focusing on one-dimensional measures – usually based on income. However, there was criticism that monetary and consumption-based poverty measures fail to capture the impact of lack of other non-monetary factors on standard of living. 
• It has been recognized that poverty has multiple dimensions that affect individuals’ experiences and quality of life. Qualitative aspects of life such as access to basic services like water and sanitation that may not be directly related to household income, constitute an important part of poverty measurement. 
• This realization has led to a growing consensus that non-monetary measures must complement monetary measures, and that income is only one aspect of well-being and not its sole determinant.  Multidimensional poverty includes the various deprivations experienced by poor people in their daily lives – such as poor health, lack of education etc. 
• Niti Aayog’s national Multidimensional Poverty Index is based on the global Multidimensional Poverty Index. It captures overlapping deprivations in three equally weighted dimensions – health, education, and living standards. While the global MPI considers 10 indicators across health, education, and living standards, Niti Aayog’s national MPI adds two more indicators to the list – maternal health and bank account. 

Difference from normal measures of poverty

• Simple headcount ratios or poverty rates do not provide any insights on the depth of poverty. 
• It is possible that while the number of poor individuals captured by the headcount ratio reduces, the poorest may, in fact, get even poorer. Alternatively, gains among the poor may be completely missed unless they cross the ‘poverty line’ or exit poverty.  
• To address this, the MPI presents not just the extent of poverty (the headcount ratio), but also the depth of poverty captured by the ‘MPI value’. 

Multidimensional Poverty Index 2023 by NITI Aayog 

1. Steep Decline in Poverty:
   • India has achieved a remarkable reduction in its MPI value and Headcount Ratio between 2015-16 and 2019-21, indicating success of the country’s commitment and action to address the multidimensional nature of poverty through its multisectoral approach.
     • Uttar Pradesh (UP), Bihar, Madhya Pradesh (MP), Odisha and Rajasthan recorded steepest decline in number of MPI poor.
   • Improvement in nutrition, years of schooling, sanitation, and cooking fuel played a significant role in reducing the MPI value.
   • The MPI estimates highlight a near-halving of India’s national MPI value and decline in the proportion of population in multidimensional poverty from 24.85% to 14.96% between 2015-16 and 2019-21.
2. Disparities Across Rural and Urban Areas:
   • While disparities in multidimensional poverty still exist between rural and urban areas, with the proportion of multidimensional poor in 2019-21 being 19.28% in rural areas compared to 5.27% in urban areas, the reduction in the MPI value has been pro-poor in absolute terms.

Government initiatives for elimination of multidimensional poverty 

• The Government focused on improving access to sanitation, nutrition, cooking fuel, financial inclusion, drinking water, and electricity. 
• Initiatives such as Swachh Bharat Mission (SBM) and Jal Jeevan Mission (JJM) have improved sanitation across the country. This led to an almost 22 percentage points improvement in sanitation deprivations.  
• The provision of subsidized cooking fuel through the Pradhan Mantri Ujjwala Yojana (PMUY) led to about 15 percentage points improvement in cooking fuel deprivations.  
• Flagship programs like the Poshan Abhiyan and Anemia Mukt Bharat have contributed to reduced deprivations in health.  
• Initiatives like Saubhagya, Pradhan Mantri Awas Yojana (PMAY), Pradhan Mantri Jan Dhan Yojana (PMJDY), and Samagra Shiksha have also played a role in significantly reducing multidimensional poverty in the country.  

Remaining Challenges

• Health: Within the health category, three sub-indicators — nutrition, child and adolescent mortality, and maternal health — showed only moderate improvement. Nutrition deprivation decreased by 6 per cent, maternal health deprivation improved by 3.3 per cent, and child and adolescent mortality deprivation declined by only 0.6 per cent. Lack of proper nutrition contributed nearly one-third to India’s MPI. 
• Standard of living: While there has been a significant improvement in access to cooking fuel, still close to 44 per cent of India’s population is still deprived of it. Similarly, while sanitation has improved, more than 30 per cent of the population is deprived when it comes to sanitation services. Access to housing also saw only marginal improvement. More than 41 per cent Indians still did not have access to housing. 
• Education: Though schooling years are considered, the quality of education in many Indian schools remains unsatisfactory. Also, insufficient years of school education contributed about 17 percent to the total national MPI, and less-than-desired school attendance contributed 9 per cent to the index.  
• Rural-urban divide: Although rural areas witnessed the fastest decline in poverty, there continues to be a major disparity between the number of people in poverty in rural and urban areas. While the incidence of multidimensional poverty is close to 20 percent in rural areas, the incidence in urban areas is a little more than 5 per cent. 

Way Ahead 

• The findings should be utilized by States and Union Territories to identify and enhance initiatives that have facilitated progress. This will aid in evaluating the advancements in vulnerable regions and identifying specific areas that demand targeted policy interventions to further accelerate development. 
• An analysis shows that the biggest improvements were made in fields of mission-mode state action like sanitation (SBM) and access to cooking fuel (PMUY). Similar programmes should also be launched for other indicators, especially for improving nutrition and the quality of school education. 
• One crucial factor hindering India’s development is the scarcity of quality jobs for its growing workforce. While the government plays a vital role in offering public goods like sanitation, enhancing job opportunities enables individuals to allocate more resources to nutrition, health, and education. Therefore, alongside reinforcing the provision of public goods, policymakers should prioritize the enhancement of job prospects. 
• The progress made so far should not make policymakers complacent as India continues to face a significant number of people living in multidimensional poverty. Therefore, continued attention and efforts are required.