Poverty and India

Thursday, August 6, 2020

Poverty is the lack of sufficient income and resources to maintain a sustainable livelihood. It leads to the manifestations such as:-
  1. Hunger and malnutrition.
  2. Lack of access to basic services like education health and social difference, and
  3. Lack of participation in decision making process.
According to the World Bank, Extreme Poverty is the one in which a person spends less than $ 1.90 per day(on PPP terms) and Moderate Poverty means when a person spends less than $ 2 or $ 5 per day (On PPP terms).
The United Nations defined poverty as a denial of choice and opportunity, a violation of human dignity, it means lack of capacity to participate effectively in the society.

Types of Poverty 

Absolute Poverty 

Absolute poverty is the poverty which is estimated on the basis of predetermined subsistence level of expenditure or income.
  • Households below the pre determined subsistence level of expenditure/income is considered as the Below Poverty Line (BPL).
  • It indicates lack of access to basic minimum amenities to livelihood, like food, clothing and shelter.

Relative Poverty 

In this, poverty is estimated on the basis of the economic status of other individuals in the society.
  • Hence, Relative Poverty measures inequality in the society.

Measurement of Poverty 

Poverty is measured in two ways (1). Head Count Ratio (HCR) and (2). Poverty Gap Index (PGI)

Head Count Ratio (HCR)

This is used to find out absolute poverty in the society. It measures the proportion of the people living below poverty line out of the total population of the society based on Predetermined subsistence level of income.

Poverty Gap Index (PGI)

In this method poverty is measured as the ga between income of the poor person and the pre determined subsistence level of income or poverty line.

Measurement in India 

Poverty in India is measured by NITI Aayog (earlier Planning Commission) on the basis of data collected by National Sample Survey Office (NSSO) in various surveys and the methodology approved in the period by an expert committee.
Since independence, various committees were formed such as Lakdawala Committee 1993(chaired by D T Lakdawala), S.D. Tendulkar committee, Rangrajan Committee etc. 
Currently Expert Group to Review the Methodology for Estimation of Poverty (Tendulkar Committee) established in 2005 (under Chairmanship of Professor Suresh D. Tendulkar) is used to determine the poverty line in the country.
Salient features of the Tendulkar Committee Report are:-
  1. It included changing consumption pattern of poor persons in estimation of poverty in India.
  2. For the first time the committee included nutritional requirements in the estimation of poverty various non food items were also included in the poverty estimation methodology.
  3. Private Expenditure on education in this committee report was also added in the estimation methodology of poverty which were earlier believed that poor people used to send their children to government schools and spends negligible amount on education.
  4. Poverty Line Basket (PLB) across rural and urban areas were uniform.
  5. Prince adjustment methodology was also change to correct the spatial and temporal issues.
  • These changes resulted into increase in the number of poor from previous Lakdawala committee 
  • In 2011-12 poverty in India was about 21.9% according to Tendulkar Committee Report.
Table: National Poverty Estimates (% Below Poverty Line)(1993-2012)
Year Rural Urban Total
1993-94 50.1 31.845.3
2004-05 41.8 25.737.2
2009-10 33.8 20.929.8
2011-12 25.7 13.721.9

Other Committees

  1. Rangarajan committee (2013):- This committee proposed different reference period for different items, which varied from 7 days to 365 days. It also reverted to Lakdawala Committee's methodology of different poverty line baskets for rural and urban areas.This committee also proposed to include average recruitment of nutrients such as protein, fat and Calories on the basis s of ICMR Norms .This committee's most of the proposals were rejected only few were accepted. 
  2. Arvind Pangariya Task Force(2015):- This Task Force Recommended  setup another committee to define the level of poverty in the country, it is yet to be formed.

Multi-dimensional Poverty Index(MPI) 

  • This index was prepared by United Nations Development Program (UNDP) and Oxford Poverty and Human Development Initiative (OPHDI).
  • This index was based on outcome rather than income/expenditure/ This index used the data fo Human Development such as Health, Education and living standard.
  • This index calculated India's poverty at 27..9% in 2015-16, which was much higher than the estimation of poverty on the basis of Tendulkar Committee methodology.

Poverty Alleviation Programmes in India

  1. Integrated Rural Development programme (1977):- To provide employment opportunities for BPL  families and increasing their financial position through Financial assistance.
  2. Indira Awas Yojna (1985-90):- To provide financial support to SC/ST and Non SC/ST BPL families to make houses for them.
  3. Swarna Jayanti Shahari Swarojgar Yojna (1997):- To provide employment in urban areas.
  4. Sampurna Gramin Rojagar Yojana (2001):- This resulted due to merger of Employment Assurance Scheme(EAS) and Jawahar Gramin Rojagar Yojna(1964).
  5. Antyodya Anna Yojna (2000):- Aimed at hunger free India by providing foodgrain(25 kg/month) to 1 Core identified extremely poor people.
  6. National Rural Employment Guarantee Scheme (MNREGA )(2004):- 100 days employment Guarantee to adult laborers belonging to unskilled category (renamed as MNREGA in 2009) 
  7. PM Gramodaya Yojna (2008-09):- To promote housing among por living BPL.
  8. Self Help Groups (SHGs):- To promote a operation an social financial  and work culture.
  9. Food Security scheme (2013):- Food Security to all .
  10. Mid-Day meal Scheme (1995):- To provide meal to children below in government schools to boost hunger and immunity while addressing increase in Gross Enrollment Ratio.
  11. Sarva Shiksha Abhiyan (2000-01):- Under this scheme students of government schools are provided books and other study materials free of cost.