Context:- There are reports which say many Indian went again in the clutches of poverty because of Pandemic COVID-19.
What is Poverty:-
- Poverty is a state of deprivation. This deprivation may be social, political, economic etc. Deprivation further manifests into hunger, unemployment, illiteracy, loss of human capital etc.
Examples of poverty:-
- Economic poverty, social poverty etc.
Types of poverty:- Two types.
- A condition where household or a person income is below a necessary level to maintain basic living standards. Because it is absolute it is possible to compare between different countries and also over time.
- It was first introduced in 1990. According to the World Bank if a person don’t earn $1.90 a day on purchasing power parity basis then he is poor.
- It is defined from the social perspective which compares living standards to the economic standards of the population living in surroundings. It is one of the measures of income inequality.
- Generally relative poverty is measured as the percentage of the population with income less than some fixed proportion of median income. It measures head counts ratio.
Measure of poverty estimation in India:-
- First-ever Poverty estimation was done by Dadabhai Naoroji in 1901 which was published in his book “Poverty and Un-British Rule in India”
- The National Planning Committee of 1936 has estimated poverty in India during the Colonial rule. It calculated poverty linking nutrition, clothing, and housing
- The Planning Commission constituted a working group for the first time in 1962 to estimate poverty nationally. This group was given a task about separate poverty lines for rural and urban areas. It has made Rs 20 and Rs 25 per capita per year respectively for rural and urban areas.
- VM Dandekar and N Rath committee made the first systematic assessment of poverty in India in 1971. This was based on National Sample Survey (NSS) data from 1960-61.
- This committee fixed the poverty line based on expenditure that was adequate to provide 2250 calories per day in both rural and urban areas.
- After this committee’s recommendation a debate on minimum calorie consumption norms was generated..
- In 1979 Alagh Committee (1979) constructed a poverty line for rural and urban areas on the basis of nutritional requirements. This was the first committee which made a separate poverty line for Urban and rural areas.
- This committee formulates the line by adjusting the price level for inflation.
- In 2009 the Tendulkar Committee was formed to review methodology for poverty estimation and to address the following shortcomings of the previous methods. This committee changed the poverty line baskets (PLBs) Consumption patterns which were linked to the 1973-74 because of significant changes in the consumption patterns of the poor since that time, which were not reflected in the poverty estimates.
- According to the Tendulkar committee 21.9 percent people in India are poor.
- ₹816 per capita per month for rural India and ₹1,000 per capita per month for urban India
- Rangrajan committee was formed:- This committee formed a poverty line based on estimated Monthly Per Capita Expenditure of Rs. 1407 in urban areas and Rs. 972 in rural areas.
Causes of Poverty in India:-
- Colonial Exploitation: The British ruled over India for about two centuries. This led to de-industrialization and realization of India ruining its traditional handicrafts and textile industries. Colonial Policies transformed India to a mere raw-material producer for European industries.
- Lack of science and technology expansion since the medieval times.
- Population Explosion: India’s population has increased rapidly in the past 45 years. The rate of 2.2% per year, This also increases the demand for consumption goods tremendously.
- Inefficient Resource utilization: This inefficient resource allocation led to underemployment and disguised unemployment in the country especially in the farming sector.
- Low Rate of Economic Development: Economic development has been low in India especially in the first 40 years. We have also missed the bus of economic boom in the world economy before the LPG reforms in 1991.
- Low Agricultural Productivity: Almost 50 percent people are working in the agricultural sector. One of the important reason for poverty in the low productivity in the agriculture sector. Productivity issues are related to fragmented and subdivided land holdings, lack of capital, illiteracy about new technologies in farming, the use of traditional methods of cultivation, wastage during storage, etc.
- A general price rise increased the burden the poor and the middle class.
- A continuous increase in unemployment is one of another factor causing poverty in India. The ever-increasing population and increase in education with low skill development led to a higher number of job-seekers.
Lack of Capital and Entrepreneurship:-
- The shortage of capital and entrepreneurship results in low level of investment and job creation in the economy.
- Laws of inheritance, caste system, certain traditions, prejudice against women led to deprivation of marginalized and pushed these sections into a clutch of poverty.
- Most of India’s poor belong to the states of Bihar, UP, MP, Chhattisgarh, Odisha, Jharkhand, etc, There are more natural calamities such as frequent floods, disasters, earthquake and cyclone cause heavy damage to agriculture in these states.
Lack of skilled labor:-
- Lack of human capital formation assets became liabilities..
- Many measures have been taken by the government to eliminate poverty. However, there is still a lack of political will. The corruption by those in power also contributes to poverty.
Effect of Pandemic on poverty situation in India:-
- There is a fall in the monthly per capita consumption expenditure of 201718 for the first time since 1972-73.
- fall of India in the Global Hunger Index to ‘serious hunger’ category
- NFHS5 survey depicts a worrying picture of increased malnutrition, infant mortality and maternal health.
- According to World Bank data:- The number of poor in India has more than doubled to 134 million from 60 million in just a year which is based on income of $2 per day or less in purchasing power parity.
- Only India contributed 57.3% of the growth of the global poor In 2020.
- India is again depicted as a country of mass poverty after 45 years.
- According to the Multi poverty Index:- India lifted 271 million citizens out of poverty between 2006 and 2016 but the pandemic has reversed it again.
- The poverty rate in India may increase to 9.7% in 2020, up sharply from the January 2020 forecast of 4.3%.
- Middle Class: One of the estimates said the middle class in India has shrunk by 3.2 crores in 2020.
Why counting or measuring the poverty is more important:-
- Knowing the numbers and making them available to the public makes it possible to get public opinion to support massive and urgent cash transfers.
- All policies can be honestly evaluated on the basis of effects on majority and further improvement if needs of the majority
- Government data were to honestly account for the exact numbers of the poor, providing the availability of data can create a climate that demands accountability from public representatives.
- India has clocked a massive rise in the market capitalization and the fortunes of the richest Indian corporates.
- Skill development supported by industrial development
- Creation of a robust manufacturing sector.
- Increase the penetration of Loan or capital to the needed section.
- Social exclusion needs to be evaluated so that marginalized section gets their due share.
- Agriculture mechanization with taking people out from agriculture towards manufacturing sector.