30 Nov

Poverty

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Contents

• What is Poverty?
• Causes of Poverty
• Other Negative impacts of poverty
• Key Measures which contributed to fight against Poverty
• Measures that need to be taken for poverty alleviation

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What is Poverty?

Poverty is a situation or condition in which a person or community lacks the financial resources essential for a minimum standard of living. Poverty stricken people and families may be surviving without good enough food, housing facilities, health and education facilities.

Poverty Situation in India:

• At the time of independence, more than 80% of country’s population were in extreme poverty.
• This has come down to less than 15% (2019-21) as per National MDPI released by NITI Aayog and 11% based on income criteria ($2.15 PPP).

Causes of Poverty:

In Indian context, the causes of poverty may be described as:

i. Historical Factors: Colonial rules -> deindustrialization -> lack of development of modern industries etc.

ii. Rapidly Rising Population -> strain on resources

iii. Low Agriculture productivity: This is due to fragmented holdings; non-scientific cultivation; lack of focus on value addition etc.

iv. Unemployment: The situation is still bad and as per Periodic Labour Force Survey (PLFS) by NSO, the unemployment had reached a 45 year high in 2017-18.

v. Shortage of Capital and able entrepreneurship

vi. Social Factors:

• Social set up is still backward and is not conducive for faster development. Laws of inheritance, caste system, gender discrimination etc. are putting hinderances in the way of faster development and have aggravated the problem.

vii. Increasing Inequalities

viii. COVID-19 Pandemic and its impact

Problems faced by poor and pains of poverty

1. Inability to fulfill basic needs:

• Housing challenges: Poor people (specially in urban areas) suffer from houselessness, overcrowding, slums and rental laws. Substandard houses leave little for the prerequisite of decent living.
• Malnourishment
• Poor health and educational opportunities

2. Social Discrimination: Poor people are harassed, humiliated and discriminated against at every level. They have to face the challenge of illiteracy and hostility by the powerful. Poverty is not only about economic poverty, but also about inequality.

3. Sub-culture of poverty: When poverty is transmitted over generations, it becomes a culture, according to Oscar Lewis.

Other Negative impacts of poverty:

1. Radicalization and Criminalization: It is easy to radicalize people who have nothing to lose.

2. Economic growth suffers: When a large section of population live in poverty, their demand is generally much lower than middle class. This hampers the overall demand of the economy and keeps the economic growth of the country below its actual potential.

3. Hampers India’s soft power at international forums.

Three Distinct strategies for reducing poverty in India may be identified:

1. In 1950s, the policymakers focused on maximization of economic growth by stepping up investment assuming that the benefits arising out of it would ‘trickle down’ and diffuse among all sectors of the society.

• But it was realized later that the benefits of economic growth (including agricultural growth) didn’t percolate to the rural poor.

2. Redistribution: This approach pleaded for the establishment of egalitarian society and suggested distribution of assets through land reforms, community development programs, cooperative farming and nationalization of big industries.

• But even this approach was unable to reduce poverty substantially.

3. Focused Poverty alleviation program:

• Since 1980s, a number of schemes are focused on attacking poverty through rural development programs. In recent years, MGNREGA has emerged as a landmark scheme to alleviate rural poverty in the country.

Key Measures which contributed to fight against Poverty:

Poverty Reduction Initiatives

• MGNREGA
• PMAY
• National Food Security Act, 2013
  • PMGKAY
• PMUY

Other steps which have helped in poverty reduction:

• Economic Reforms:
  • For e.g., the 1991 economic reforms paid huge dividends after a few years of transitional adjustments.
  • LPG reforms have also increased opportunities within the country.
• Promoting Manufacturing Sector in India: Make in India; Atmanirbhar Bharat; Various PLI Schemes
• Skill Initiatives

Current Situation:

• As per National Multidimensional Poverty Index (MPI) prepared by NITI Aayog, India has lifted 135 million people out of Multidimensional Poverty between 2015-16 to 2019-21. Poverty levels have reduced to less than 15% of the total population by 2019-21.
• The UNDP had earlier estimated that India lifted 415 million people out of poverty (MDPI) over 2005-06 to 2019-21.

Measures that need to be taken for poverty alleviation

Focus on better implementation of schemes which help vulnerable groups like NFSA, PMJAY, MGNREGA etc.

• Decentralized Planning and its execution: For the success of anti-poverty programs, it is necessary that they should be planned by village panchayats/ Municipality levels.
• We need to provide minimum income for poor and vulnerable – cash transfers for women, increasing MGNREGA to 150 days in rural areas; introduction of urban employment guarantee scheme etc.

Employment Generation:

• Skill development in emerging technologies
• Training in horticulture, animal husbandry, food processing sector
• Women empowerment and creation of SHG led initiative

Promoting ease of doing business:

• Reforming labor laws and other regulatory framework
• Land Reforms

Focus on Agri-growth:

• Marketing reforms, land leasing reforms etc.
• Reduce dependency of people on agriculture sector -> industries need to expand, and rural workforce needs to be skilled to serve these industries.

Fight growing inequality: Though total egalitarianism in income and property may not be possible, but tax reforms can be introduced to reduce generation of black money. Similarly, laws can be better implemented to ensure that benami transfers and deals doesn’t take place.

Economic development and Economic Growth:

• Rapid Industrialization
• Increased budget for welfare measures and reducing unnecessary expenses.
• Make Statistical System Independent of state interference – to get proper numbers.

Conclusion:

Various stakeholders, including government, civil society organizations, and citizens need to move constantly towards a vision of an egalitarian democracy where people can live fulfilling lives, instead of remaining mired in notions of minimal reparation or remedies.