Poverty as a Challenge PDF

3 Chapter Poverty as a Challenge Overview dhabas. They could also be beggars with This chapter deals with one of the most children in tatters. We see poverty all difficult challenges faced by...

3 Chapter Poverty as a Challenge Overview dhabas. They could also be beggars with This chapter deals with one of the most children in tatters. We see poverty all difficult challenges faced by independent around us. In fact, every fifth person in India—poverty. After discussing this India is poor. (This means, roughly 270 multi-dimensional problem through million (or 27 crore) people in India live examples, the chapter discusses the way in poverty 2011-12.) This also means that poverty is seen in social sciences. Poverty India has the largest single concentration trends in India and the world are of the poor in the world. This illustrates illustrated through the concept of the the seriousness of the challenge. poverty line. Causes of poverty as well as anti-poverty measures taken by the Two Typical Cases of Poverty government are also discussed. The chapter ends with broadening the official Urban Case concept of poverty into human poverty. Thirty-three year old Ram Saran works as a daily-wage labourer in a wheat Introduction flour mill near Ranchi in Jharkhand. In our daily life, we come across many He manages to earn around Rs 1,500 people who we think are poor. They could a month when he finds employment, be landless labourers in villages or people which is not often. The money is not living in overcrowded jhuggis in cities. They enough to sustain his family of six— could be daily wage workers at that includes his wife and four children construction sites or child workers in aged between 12 years to six months. Picture 3.1 Story of Ram Saran Poverty as a Challenge 29 2024-25  He has to send money home to his old Rural case parents who live in a village near Lakha Singh belongs to a small village Ramgarh. His father a landless near Meerut in Uttar Pradesh. His labourer, depends on Ram Saran and family doesn’t own any land, so they his brother who lives in Hazaribagh, do odd jobs for the big farmers. Work for sustenance. Ram Saran lives in a is erratic and so is income. At times one-room rented house in a crowded they get paid Rs 50 for a hard day’s basti in the outskirts of the city. It’s a work. But often it’s in kind like a few temporary shack built of bricks and kilograms of wheat or dal or even clay tiles. His wife Santa Devi, works vegetables for toiling in the farm as a part time maid in a few houses through the day. The family of eight and manages to earn another Rs 800. cannot always manage two square They manage a meagre meal of dal and meals a day. Lakha lives in a kuchha rice twice a day, but there’s never hut on the outskirts of the village. enough for all of them. His elder son The women of the family spend the works as a helper in a tea shop to day chopping fodder and collecting supplement the family income and firewood in the fields. His father a earns another Rs 300, while his 10- TB patient, passed away two years year-old daughter takes care of the ago due to lack of medication. His younger siblings. None of the children mother now suffers from the same go to school. They have only two pairs disease and life is slowly ebbing away. of hand-me-down clothes each. New Although, the village has a primary ones are bought only when the old school, Lakha never went there. He clothes become unwearable. Shoes are had to start earning when he was 10 a luxury. The younger kids are years old. New clothes happen once undernourished. They have no access in a few years. Even soap and oil are to healthcare when they fall ill. a luxury for the family. Study the above cases of poverty and discuss the following issues related to poverty: Landlessness Unemployment Size of families Illiteracy Poor health/malnutrition Child labour Helplessness Picture 3.2 Story of Lakha Singh 30 Economics 2024-25 These two typical cases illustrate many both a cause as well as a dimensions of poverty. They show that consequence of poverty in the usual poverty means hunger and lack of shelter. sense. Broadly, it is a process through It also is a situation in which parents are which individuals or groups are not able to send their children to school excluded from facilities, benefits and or a situation where sick people cannot opportunities that others (their afford treatment. Poverty also means lack “betters”) enjoy. A typical example is of clean water and sanitation facilities. It the working of the caste system in also means lack of a regular job at a India in which people belonging to minimum decent level. Above all it means certain castes are excluded from living with a sense of helplessness. Poor equal opportunities. Social exclusion people are in a situation in which they thus may lead to, but can cause more are ill-treated at almost every place, in damage than, having a very low farms, factories, government offices, income. hospitals, railway stations etc. Obviously, Vulnerability nobody would like to live in poverty. One of the biggest challenges of Vulnerability to poverty is a measure, independent India has been to bring which describes the greater millions of its people out of abject poverty. probability of certain communities Mahatama Gandhi always insisted that (say, members of a backward caste) India would be truly independent only or individuals (such as a widow or a when the poorest of its people become free physically handicapped person) of of human suffering. becoming, or remaining, poor in the coming years. Vulnerability is Poverty as seen by social scientists determined by the options available Since poverty has many facets, social to different communities for finding scientists look at it through a variety of an alternative living in terms of indicators. Usually the indicators used assets, education, health and job relate to the levels of income and opportunities. Further, it is analysed consumption. But now poverty is looked on the basis of the greater risks these through other social indicators like groups face at the time of natural illiteracy level, lack of general resistance disasters (earthquakes, tsunami), due to malnutrition, lack of access to terrorism etc. Additional analysis is healthcare, lack of job opportunities, lack made of their social and economic of access to safe drinking water, ability to handle these risks. In fact, sanitation etc. Analysis of poverty based vulnerability describes the greater on social exclusion and vulnerability is probability of being more adversely now becoming very common (see box). affected than other people when bad time comes for everybody, whether a Social exclusion flood or an earthquake or simply a fall in the availability of jobs! According to this concept, poverty must be seen in terms of the poor having to live only in a poor Poverty Line surrounding with other poor people, At the centre of the discussion on poverty excluded from enjoying social equality is usually the concept of the “poverty line”. of better-of f people in better A common method used to measure surroundings. Social exclusion can be poverty is based on the income or Poverty as a challenge 31 2024-25 consumption levels. A person is higher amount for urban areas has been considered poor if his or her income or fixed because of high prices of many consumption level falls below a given essential products in urban centres. In “minimum level” necessary to fulfill the this way in the year 2011-12, a family of basic needs. What is necessary to satisfy five members living in rural areas and the basic needs is different at different earning less than about Rs 4,080 per times and in different countries. month will be below the poverty line. A Therefore, poverty line may vary with time similar family in the urban areas would and place. Each country uses an need a minimum of Rs 5,000 per month imaginary line that is considered to meet their basic requirements. The appropriate for its existing level of poverty line is estimated periodically development and its accepted minimum (normally every five years) by conducting social norms. For example, a person not sample surveys. These surveys are having a car in the United States may be carried out by the National Sample Survey considered poor. In India, owning of a car O rganisation (NSSO). However, for is still considered a luxury. making comparisons between developing While determining the poverty line in countries, many international India, a minimum level of food requirement, organisations like the World Bank use a clothing, fo otwear, fuel and light, uniform standard for the poverty line: educational and medical requirement, etc., minimum availability of the equivalent of are determined for subsistence. These $1.90 per person per day (2011, ppp). physical quantities are multiplied by their prices in rupees. The present formula for Let’s Discuss food requirement while estimating the Discuss the following: poverty line is based on the desired calorie requirement. Food items, such as Why do different countries use different cereals, pulses, vegetable, milk, oil, sugar, poverty lines? etc., together provide these needed What do you think would be the calories. The calorie needs vary depending “minimum necessary level” in your on age, sex and the type of work that a locality? person does. The accepted average calorie requirement in India is 2400 calories per Poverty Estimates person per day in rural areas and 2100 It is clear from Table 3.1 that there is a calories per person per day in urban substantial decline in poverty ratios in areas. Since people living in rural areas India from about 45 per cent in 1993-94 engage themselves in more physical work, to 37.2 per cent in 2004–05. The calorie requirements in rural areas are proportion of people below poverty line considered to be higher than in urban further came down to about 22 per cent areas. The monetary expenditure per in 2011–12. If the trend continues, people capita needed for buying these calorie below poverty line may come down to less requirements in terms of food grains, etc., than 20 per cent in the next few years. is revised periodically taking into Although the percentage of people living consideration the rise in prices. under poverty declined in the earlier two On the basis of these calculations, for decades (1973–1993), the number of poor the year 2011–12, the poverty line for a declined from 407 million in 2004–05 to person was fixed at Rs 816 per month for 270 million in 2011–12 with an average rural areas and Rs 1000 for urban areas. annual decline of 2.2 percentage points Despite less calorie requirement,the during 2004–05 to 2011–12. 32 Economics 2024-25  Table 3.1: Estimates of Poverty in India (Tendulkar Methodology) Poverty ratio (%) Number of poor (in millions) Year Rural Urban Total Rural Urban Combined 1993–94 50 32 45 329 75 404 2004–05 42 26 37 326 81 407 2009–10 34 21 30 278 76 355 2011–12 26 14 22 217 53 270 Source: India in figures, 2018, Government of India Central Statistics office. niti.gov.in/state-statistics (accessed on Nov. 15, 2021) Let’s Discuss among the economic groups, the most vulnerable groups are the rural Study Table 3.1 and answer the following agricultural labour households and the questions: urban casual labour households. Graph Even if poverty ratio declined between 3.1 shows the percentage of poor people 1993–94 and 2004–05, why did the in all these groups. Although the average number of poor remain at about 407 for people below poverty line for all groups million? in India is 22, 43 out of 100 people Are the dynamics of poverty reduction belonging to Scheduled Tribes are not the same in rural and urban India? able to meet their basic needs. Similarly, 34 per cent of casual workers in urban Vulnerable Groups areas are below poverty line. About 34 The proportion of people below poverty line per cent of casual labour farm (in rural is also not same for all social groups and areas) and 29 per cent of Scheduled economic categories in India. Social C a s t e s a r e a l s o p o o r. The double groups, which are most vulnerable to disadvantage of being a landless casual poverty are Scheduled Caste and wage labour household in the socially Scheduled Tribe households. Similarly, disadvantaged social groups of the Graph 3.1: Poverty in India 2011–12: Most Vulnerable Groups Source: www.worldbank.org/2016/India-s-Poverty-Profile (accessed on 29.09.2021) Poverty as a Challenge 33 2024-25  Picture 3.3 Story of Sivaraman scheduled caste or the scheduled tribe Story of Sivaraman population highlights the seriousness of Sivaraman lives in a small village the problem. Some recent studies have near Karur town in Tamil Nadu. Karur shown that except for the scheduled tribe is famous for its handloom and households, all the other three groups (i.e. powerloom fabrics. There are a 100 scheduled castes, rural agricultural families in the village. Sivaraman an labourers and the urban casual labour Aryunthathiyar (cobbler) by caste now households) have seen a decline in poverty works as an agricultural labourer for in the 1990s. Rs 160 per day. But that’s only for Apart from these social groups, there five to six months in a year. At other is also inequality of incomes within a times, he does odd jobs in the town. His wife Sasikala too works with him. family. In poor families all suffer, but some But she can rarely find work these suffer more than others. In some cases days, and even if she does, she’s paid women, elderly people and female infants Rs 100 per day for the same work that are denied equal access to resources Sivaraman does. There are eight available to the family. members in the family. Sivaraman’s 65 year old widowed mother is ill and 34 Economics 2024-25  seventies, the success rate of reducing needs to be helped with her daily poverty varies from state to state. Recent chores. He has a 25-year -old estimates show while the all India Head unmarried sister and four children Count Ratio (HCR) was 21.9 per cent in aged between 1 year to 16 years. 2011-12 states like Madhya Pradesh, Three of them are girls, the youngest Assam, Uttar Pardesh, Bihar and Odisha is a son. None of the girls go to school. had above all India poverty level. As the Buying books and other things for Graph 3.2 shows, Bihar and Odisha school-going girls is a luxury he continue to be the two poorest states with cannot afford. Also, he has to get them poverty ratios of 33.7 and 32.6 per cent married at some point of time so he respectively. Along with rural poverty, doesn’t want to spend on their urban poverty is also high in Odisha, education now. His mother has lost Madhya Pradesh, Bihar and Uttar Pradesh. interest in life and is just waiting to In comparison, there has been a die someday. His sister and elder significant decline in poverty in Kerala, daughter take care of the household. Maharashtra, Andhra Pradesh, Tamil Sivaraman plans to send his son to Nadu, Gujarat and West Bengal. States school when he comes of age. His like Punjab and Haryana have unmarried sister does not get along traditionally succeeded in reducing with his wife. Sasikala finds her a poverty with the help of high agricultural burden but Sivaraman can’t find a growth rates. Kerala has focused more on suitable groom due to lack of money. human resource development. In West Although the family has difficulty in Bengal, land reform measures have arranging two meals a day, helped in reducing poverty. In Andhra Sivaraman manages to buy milk once Pradesh and Tamil Nadu public in a while, but only for his son. distribution of food grains could have been responsible for the improvement. Let’s Discuss Global Poverty Scenario Observe some of the poor families The proportion of people in different around you and try to find the following: countries living in extreme economic poverty— defined by the World Bank as Which social and economic group do living on less than $2.15 per day—has they belong to? fallen from 16.27 per cent in 2010 to 9.05 Who are the earning members in the per cent in 2019. Although there has been family? a substantial reduction in global poverty, What is the condition of the old people it is marked with great regional differences. in the family? Poverty declined substantially in China Are all the children (boys and girls) and Southeast Asian countries as a result attending schools? of rapid economic growth and massive investments in human resource development. Inter-State Disparities Number of poors in China has come down Poverty in India also has another aspect from 2.1 per cent in 2014 to 1.2 per cent in or dimension. The proportion of poor 2015 to 0.1 per cent in 2020. In the countries people is not the same in every state. of South Asia (India, Pakistan, Sri Lanka, Although state level poverty has witnessed Nepal, Bangladesh, Bhutan, Afghanistan a secular decline from the levels of early and Maldives) the decline has also been Poverty as a challenge 35 2024-25  Graph 3.2: Poverty Ratio in Selected Indian States, (As per 2011 Census) Source: Economic Survey 2020–21, Government of India, 2021. Let’s Discuss The new sustainable development goals Study the Graph 3.2 and do the following: of the United Nations (UN) proposes Identify the three states where the ending poverty of all types by 2030. poverty ratio is the highest. Identify the three states where poverty Let’s Discuss ratio is the lowest. Study the Graph 3.4 and do the following: Identify the areas of the world, where rapid 12.8 per cent in 2017 to 10.9 poverty ratios have declined. per cent in 2021. With decline in the percentage of the poor, the number of Identify the area of the globe which has poor has also declined significantly from the largest concentration of the poor. 233 million in 2017 to 207 million in 2021. Table 3.2: Poverty: Head Count Ratio Because of different poverty line definition, Comparison among Some Selected Countries poverty in India is also shown higher than the national estimates. Country % of Population below In Sub-Saharan Africa, poverty in fact $2.15 a day (2017ppp) declined from 36.6 per cent in 2017 to 35.4 1. Nigeria 30.9 (2018) per cent in 2019 (see graph 3.3). In Latin 2. Bangladesh 9.6 (2022) America and Caribbean, the ratio of poverty 3. India 11.9 (2021) has increase from 4.4 per cent in 2017 to 4. Pakistan 4.9 (2018) 4.6 per cent in 2021. Poverty has also 5. China 0.1 (2020) resurfaced at 3 percent in 2000 in some of 6. Brazil 5.8 (2021) the former socialist countries like Russia, 7. Indonesia 2.5 (2022) where officially it was non-existent earlier. Table 3.2 shows the proportion of people 8. Sri Lanka 1.0 (2019) living under poverty in different countries Source: Poverty and Equity Database, World as defined by the international poverty line Bank Data; (databank.worldbank.org) accessed (means population below $2.15 a day). on 01.10.2021, 2022. 36 Economics 2024-25  Graph 3.3: Share of people living on $1.90 a day, 2005–2019 140 120 100 South Asia Percentage 80 La!n merica and Carribean Sub-sharan Africa 60 East asia and Pacific 40 China 20 0 2005 2010 2013 2015 2019 Year Source: Poverty and Equity Database; World Bank (http://databank.worldbank.org/data/reports.aspx?source=poverty-and-equity-database) Graph 3.4: Number of poor by region ($ 1.90 per day) in millions By 2030, forecasts indicate that nearly 9 in10 of the extreme poor will live in Sub-Saharan Africa. Source: World Bank PovcalNet and Poverty & Equity Data Portal (http://databank.worldbank.org/data/reports.aspx?source=poverty-and-equity-database) Poverty as a Challenge 37 2024-25 Causes of Poverty effectively by most of the state governments. Since lack of land resources There were a number of causes for the has been one of the major causes of widespread poverty in India. One poverty in India, proper implementation historical reason is the low level of of policy could have improved the life of economic development under the British millions of rural poor. colonial administration. The policies of Many other socio-cultural and the colonial government ruined traditional economic factors also are responsible for handicrafts and discouraged development poverty. In order to fulfil social obligations of industries like textiles. The low rate of and observe religious ceremonies, people growth persisted until the nineteen- in India, including the very poor, spend a eighties. This resulted in less job lot of money. Small farmers need money opportunities and low growth rate of to buy agricultural inputs like seeds, incomes. This was accompanied by a high fertilizer, pesticides etc. Since poor people growth rate of population. The two hardly have any savings, they borrow. combined to make the growth rate of per Unable to repay because of poverty, they capita income very low. The failure at both become victims of indebtedness. So the the fronts: promotion of economic growth high level of indebtedness is both the and population control perpetuated the cause and effect of poverty. cycle of poverty. With the spread of irrigation and the Anti-Poverty Measures Green revolution, many job opportunities Removal of poverty has been one of the were created in the agriculture sector. But major objectives of Indian developmental the effects were limited to some parts of strategy. The current anti-poverty India. The industries, both in the public strategy of the government is based and the private sector, did provide some broadly on two planks (1) promotion of jobs. But these were not enough to absorb economic growth (2) targeted anti-poverty all the job seekers. Unable to find proper programmes. jobs in cities, many people started working Over a period of thirty years lasting as rickshaw pullers, vendors, up to the early eighties, there were little construction workers, domestic servants per capita income growth and not much etc. With irregular small incomes, these reduction in poverty. Official poverty people could not afford expensive housing. estimates which were about 45 per cent They started living in slums on the in the early 1950s remained the same even outskirts of the cities and the problems in the early eighties. Since the eighties, of poverty, largely a rural phenomenon India’s economic growth has been one of also became the feature of the urban the fastest in the world. The growth rate sector. jumped from the average of about 3.5 per Another feature of high poverty rates cent a year in the 1970s to about 6 per has been the huge income inequalities. cent during the 1980s and 1990s. The One of the major reasons for this is the higher growth rates have helped unequal distribution of land and other significantly in the reduction of poverty. resources. Despite many policies, we have Therefore, it is becoming clear that there not been able to tackle the issue in a is a strong link between economic growth meaningful manner. Major policy and poverty reduction. Economic growth initiatives like land reforms which aimed widens opportunities and provides the at redistribution of assets in rural areas resources needed to invest in human have not been implemented properly and development. This also encourages people 38 Economics 2024-25 to send their children, including the girl for educated unemployed youth in rural child, to schools in the hope of getting areas and small towns. They are helped in better economic returns from investing setting up small business and industries. in education. However, the poor may not Rural Employment Generation Programme be able to take direct advantage from the (REGP) was launched in 1995. The aim of opportunities created by economic the programme is to create self- growth. Moreover, growth in the employment opportunities in rural areas agriculture sector is much below and small towns. A target for creating 25 expectations. This has a direct bearing lakh new jobs has been set for the on poverty as a large number of poor programme under the Tenth Five Year people live in villages and are dependent plan. Swarnajayanti Gram Swarozgar on agriculture. Yojana (SGSY) was launched in 1999. The In these circumstances, there is a programme aims at bringing the assisted clear need for targeted anti-poverty poor families above the poverty line by programmes. Although there are so many organising them into self help groups schemes which are formulated to affect through a mix of bank credit and poverty directly or indirectly, some of government subsidy. Under the Pradhan them are worth mentioning. Mahatma Mantri Gramodaya Yozana (PMGY) Gandhi National Rural Employment launched in 2000, additional central Guarantee Act, 2005 aims to provide 100 assistance is given to states for basic days of wage employment to every services such as primary health, primary household to ensure livelihood security education, rural shelter, rural drinking in rural areas. It also aimed at sustainable water and rural electrification. A nother development to address the cause of important scheme is Antyodaya Anna draught, deforestration and soil erosion. Yozana (A AY) about which you will be One-third of the proposed jobs have been reading more in the next chapter. reserved for women. The scheme provided The results of these programmes have employment to 220 crores person days of been mixed. One of the major reasons employment to 4.78 crore households. for less effectiveness is the lack of proper The share of SC, ST, Women person days implementation and right targeting. in the scheme are 23 per cent, 17 per Moreover, there has be en a lot of cent and 53 per cent respectively. The overlapping of schemes. Despite good average wage has increased from 65 in intentions, the benefits of these schemes 2006–07 to 132 in 2013–14. Recently, in are not fully reached to the deserving March 2018, the wage rate for unskilled poor. Therefore, the major emphasis in manual workers has been revised, state recent years is on proper monitoring of wise, the range of wage rate for different all the poverty alleviation programmes. states and union territories lies in between ` 281 per day (for the workers in The Challenges Ahead Haryana) to ` 168 per day (for the workers Poverty has certainly declined in India. of Bihar and Jharkhand). But despite the progress, poverty Prime Minister Rozgar Yozana (PMRY) reduction remains I ndia’s most is another scheme which was started in compelling challenge. Wide disparities in 1993. The aim of the programme is to poverty are visible between rural and create self-employment opportunities urban areas and among different states. Poverty as a challenge 39 2024-25 Certain social and economic groups are do they have education? Or shelter? Or more vulnerable to poverty. Poverty health care? Or job security? Or self- reduction is expected to make better confidence? Are they free from caste and progress in the next ten to fifteen years. gender discrimination? Is the practice of This would be possible mainly due to child labour still common? Worldwide higher economic growth, increasing stress experience shows that with development, on universal free elementary education, the definition of what constitutes poverty declining population growth, increasing also changes. Eradication of poverty is empowerment of the women and the always a moving target. Hopefully we will economically weaker sections of society. be able to provide the minimum The of ficial definition of poverty, “necessary” in terms of only income to however, captures only a limited part of all people by the end of the next decade. what poverty really means to people. It is But the target will move on for many of about a “minimum” subsistence level of the bigger challenges that still remain: living rather than a “reasonable” level of living. Many scholars advocate that we providing health care, education and job must broaden the concept into human security for all, and achieving gender poverty. A large number of people may equality and dignity for the poor. These have been able to feed themselves. But will be even bigger tasks. Summary You have seen in this chapter that poverty has many dimensions. Normally, this is measured through the concept of “poverty line”. Through this concept we analysed main global and national trends in poverty. But in recent years, analysis of poverty is becoming rich through a variety of new concepts like social exclusion. Similarly, the challenge is becoming bigger as scholars are broadening the concept into human poverty. Exercises 1. Describe how the poverty line is estimated in India? 2. Do you think that present methodology of poverty estimation is appropriate? 3. Describe poverty trends in India since 1973? 4. Discuss the major reasons for poverty in India? 5. Identify the social and economic groups which are most vulnerable to poverty in India. 6. Give an account of interstate disparities of poverty in India. 7. Describe global poverty trends. 8. Describe current government strategy of poverty alleviation? 9. Answer the following questions briefly (i) What do you understand by human poverty? (ii) Who are the poorest of the poor? (iii) What are the main features of the National Rural Employment Guarantee Act 2005? 40 Economics 2024-25  References DEATON, ANGUS AND VALERIE KOZEL (Eds.) 2005. The Great Indian Poverty Debate. MacMillan India Limited, New Delhi. Economic Survey 2015–2016. Ministry of Finance, Government of India, New Delhi. (Chapter on social sectors, [Online web] URL: http://indiabudget.nic.in/ es_2004–05/social.htm) Mid-Term Appraisal of the Tenth Five Year Plan 2002–2007. Planning Commission, New Delhi. Part II, Chapter 7: Poverty Elimination and Rural Employment, [Online web] URL: http://www.planningcommission.nic.in/midterm/english- pdf/chapter-07.pdf National Rural Employment Guarantee Act 2005. [Online web] URL: http://rural.nic.in/ rajaswa.pdf PANAGRIYA ARVIND AND VISHAL MORE ‘Poverty by social, religious and economic groups in India and its largest state’, working paper no. 2013-14, Programme on Indian economic policies, Columbia University. Tenth Five Year Plan 2002–2007. Planning Commission, New Delhi. (Chapter 3.2, Poverty Alleviation in Rural India: Strategy and Programmes, [Online web] URL: http://www.planningcommission.nic.in/plans/planrel/fiveyr/10th/volume2/ v2_ch3_2.pdf World Development Indicators 2016. Featuring the Suistainable Development Goals, The World Bank. Poverty as a Challenge 41 2024-25