Poverty As A Challenge

Hello students, welcome to today's economics lesson. I am so happy to be here with you to discuss one of the most important chapters in your syllabus - Chapter 3, Poverty as a Challenge. This is a chapter that is very close to our hearts because as citizens of India, we must understand the problem of poverty that our country has been facing ever since independence. So let's begin our journey together and understand what poverty really means, how we measure it, and what our government is doing to remove it.

So students, let me start by asking you a question. Have you ever seen someone who does not have enough food to eat? Or someone who lives in a small hut made of mud and thatch? Or perhaps someone who cannot afford to send their children to school? I am sure many of you would have seen such people in your daily lives. In our country, we come across such people quite often - whether it is the landless labourer working in the fields or the domestic helper living in a crowded slum in the city. These people are what we call poor. But students, poverty is not just about not having enough money. It is a much deeper and more complex problem that affects every aspect of a person's life. That is exactly what we are going to learn in this chapter.

Now, let me introduce you to two real-life cases of poverty - one from an urban area and one from a rural area. These examples will help you understand how poverty affects real families.

Let's look at the urban case first. Imagine a man named Ram Saran who is thirty-three years old. He works as a daily-wage labourer in a wheat flour mill near Ranchi in Jharkhand. He earns around three thousand five hundred rupees a month, but this is only when he finds employment, which is not very often. Can you imagine living on just three thousand five hundred rupees for a whole month? And he has to support his family of six - his wife and four children whose ages range from twelve years to just six months! Not only that, he also has to send money to his old parents who live in a village near Ramgarh. His father is a landless labourer and his brother who lives in Hazaribagh also depends on Ram Saran for survival.

Ram Saran lives in a one-room rented house in a crowded basti on the outskirts of the city. It is a temporary shack built of bricks and clay tiles. His wife, Santa Devi, works as a part-time maid in a few houses and manages to earn another one thousand five hundred rupees. Together, they try to manage a meagre meal of dal and rice twice a day, but there is never enough food for all of them. Their elder son works as a helper in a tea shop to supplement the family's income and earns another seven hundred rupees. Their ten-year-old daughter goes to school and takes care of the younger siblings when her mother is at work. They have only two pairs of hand-me-down clothes each. New clothes are bought only when the old ones become completely unwearable. Shoes are a luxury for this family. The younger child relishes the dal-rice served at school because that is the only time he gets a proper meal.

Now let's look at the rural case. There is Lakha Singh who belongs to a small village near Meerut in Uttar Pradesh. His family does not own any land, so they have to do odd jobs for the big farmers. Work is very erratic, and so is their income. Sometimes they get paid two hundred rupees for a hard day's work, but often they are paid in kind - like a few kilograms of wheat or dal or even vegetables for toiling in the farm throughout the day. The family of six is barely able to manage two square meals a day. Lakha lives in a kuchha hut on the outskirts of the village. The women of the family spend their day chopping fodder and collecting firewood from the fields. His father, who was suffering from tuberculosis, passed away two years ago due to lack of proper medication. His mother now suffers from the same disease and life is slowly ebbing away. Although the village has a primary school, Lakha never went to school, but he is happy to see his children going to school. New clothes happen once in a few years. Even soap and oil are a luxury for this family.

Students, these two cases show us the harsh reality of poverty in our country. Now, let me ask you to think about the issues that these cases highlight. Please discuss among yourselves and try to understand these aspects of poverty - landlessness, unemployment, size of families, literacy levels, health and nutrition, and helplessness.

As you can see from these cases, poverty means many things. It means hunger and lack of shelter. It means parents are not able to give their children nutritious food three times a day or sick people cannot afford treatment. Poverty also means lack of clean water and sanitation facilities. It means lack of a regular job with decent minimum wages. Above all, it means living with a sense of helplessness. Poor people are ill-treated at almost every place - in farms, factories, government offices, hospitals, railway stations, and so on. Obviously, nobody would like to live in poverty.

Now students, let me introduce you to an important concept called social exclusion. According to this concept, poverty must be seen in terms of the poor having to live only in a poor surrounding with other poor people, excluded from enjoying social equality that better-off people enjoy in better surroundings. Social exclusion can be both a cause as well as a consequence of poverty. Broadly, it is a process through which individuals or groups are excluded from facilities, benefits, and opportunities that others - the "better-offs" - enjoy. A typical example is the working of the caste system in India in which people belonging to certain castes are excluded from equal opportunities. Social exclusion thus may lead to or can cause more damage than having a very low income. This is a very important concept to understand, students. When certain groups of people are excluded from society, they cannot improve their condition, and this keeps them trapped in the cycle of poverty.

Now, let's talk about another important concept - vulnerability. One of the biggest challenges of independent India has been to bring millions of its people out of abject poverty. Mahatma Gandhi said that India would be truly independent only when the poorest of its people become free of human suffering. Vulnerability to poverty is a measure that describes the greater probability of certain communities - say, members of a backward caste - or individuals - such as a widow or a physically handicapped person - of becoming or remaining poor. Vulnerability is determined by the options available to different communities for finding an alternative living in terms of assets, education, health, and job opportunities. Further, it is analysed on the basis of the greater risks these groups face at the time of natural disasters like earthquakes and tsunamis. Additional analysis is made of their social and economic ability to handle these risks. In fact, vulnerability describes the greater probability of being more adversely affected than other people when bad times come for everybody - whether a flood or an earthquake or simply a fall in the availability of jobs. So students, vulnerability means that some people are more likely to become poor or find it harder to come out of poverty compared to others.

Now, let's understand how social scientists look at poverty. Since poverty has many facets, social scientists look at it through a variety of indicators. Usually, the indicators are used to relate with the levels of income and consumption. In recent times, a variety of other indicators have also been used to recognise whether a person is poor or not. For example, the National Multidimensional Poverty Index is calculated on the basis of three broad indicators - health indicators like nutrition, child and adolescent mortality, maternal health; education indicators like years of schooling and school attendance; and standard of living indicator like cooking fuel, sanitation, drinking water, housing, electricity, assets, and bank account. Indicators such as social exclusion and vulnerability are also used to understand poverty.

Now students, we come to a very important concept - the poverty line. At the centre of the discussion on poverty is the concept of the poverty line. A common method used to measure poverty is based on the income or consumption levels. The term consumption means the amount spent on various items such as food, clothing, and so on, by a family. A person is considered poor if his or her income or consumption level falls below a given minimum level necessary to fulfill the basic needs. What is necessary to satisfy basic needs is different at different times and in different countries. Therefore, poverty line may vary with time and place. Each country uses an imaginary line that is considered appropriate for its existing level of development and its accepted minimum social norms. For example, a person not having a car in the United States may be considered poor. In India, owning a car is still considered a luxury.

While determining the poverty line in India, till a few years ago, a minimum level of food requirement, clothing, footwear, fuel and electricity, educational and medical needs, and so on, were taken into consideration. The physical quantities of these needs were multiplied by their prices in rupees. The formula for food requirement while estimating the poverty line was based on the desired calorie requirement. Food items such as cereals, pulses, vegetables, milk, oil, sugar, and so on, together provided these needed calories. The calorie needs vary depending on age, sex, and the type of work that a person does. The accepted average calorie requirement in India was 2400 calories per person per day in rural areas and 2100 calories per person per day in urban areas. Since people living in rural areas engage themselves in more physical work, calorie requirements in rural areas were considered to be higher than in urban areas. The bare monetary expenditure per capita needed for buying these calorie requirements in terms of food grains, and so on, and reported by families has been considered as poverty line. This amount was revised periodically, taking into consideration the rise in prices.

Based on the global developments, the Government of India has begun to estimate the proportion of poor in India using 12 developmental indicators, which is popularly known as the Multidimensional Poverty Index. This national index complements the income or consumption expenditure based poverty measurement because it measures and compares deprivations directly.

Now students, let me pause here and ask you to think about the difference between consumption-based expenditure poverty line and the National Multidimensional Poverty Index. The consumption-based poverty line focuses mainly on how much money a person or family spends on goods and services. If the expenditure is below a certain minimum level, they are considered poor. On the other hand, the National Multidimensional Poverty Index looks at multiple dimensions of poverty - not just money, but also health, education, and standard of living. A person may have enough to eat but still be considered poor if they do not have access to proper sanitation, or if they do not have electricity in their home, or if no one in their family has completed six years of schooling. So the multidimensional approach gives us a more complete picture of poverty.

Also think about what would be the "minimum necessary level" in your locality. In a city like Delhi or Mumbai, the minimum necessary level would be much higher than in a remote village in Bihar or Odisha. In cities, you need money for rent, transportation, and higher food costs, whereas in villages, people can grow some of their own food.

Now let's look at the poverty estimates. Based on the methodology described in the previous section, the number and proportion of poor people in India, called the Head Count Ratio, is estimated. Table 3.1 shows that during the 1990s, the proportion of consumption expenditure based poor declined from 45 to 37 percent. However, the number of poor remained at about 40 crores. During 2000 to 2011, both the proportion and the number of poor declined. The proportion of multidimensional poor during 2015 to 2021 declined from 25 to 15 percent. As per the official record, 13.5 crore people have escaped multidimensional poverty during this period. Specifically, deprivation against various indicators has declined more sharply in rural areas than in urban areas.

Let me explain this table to you in detail. The table shows two different ways of measuring poverty - consumption-based and multidimensional. For consumption-based, in 1993-94, 50 percent of rural population was poor, 32 percent of urban population was poor, and overall 45 percent of India's population was poor. This meant 329 million rural poor, 75 million urban poor, and a total of 404 million poor people in India. By 2011-12, the rural poverty came down to 26 percent, urban to 14 percent, and overall to 22 percent. This means 217 million rural poor, 53 million urban poor, and a total of 270 million poor people.

For multidimensional poverty, in 2015-16, 32.6 percent of rural population and 8.7 percent of urban population was multidimensionally poor, making it 25 percent overall. By 2019-21, this came down to 19.3 percent in rural areas, 5.3 percent in urban areas, and 15 percent overall. This is a significant improvement, students!

Now, here is an important question for you to think about. Even if poverty ratio declined between 1993-94 and 2004-05, why did the number of poor remain at about 407 million? This is because during this period, India's population was growing. Even though the percentage of poor people came down, the total number remained almost the same because the base population increased. This is a very important point to understand, students.

Also, are the dynamics of poverty reduction the same in rural and urban India? Looking at the table, we can see that poverty has declined in both rural and urban areas, but the pattern is different. In rural areas, poverty came down from 50 percent in 1993-94 to 26 percent in 2011-12, while in urban areas, it came down from 32 percent to 14 percent. So urban poverty has declined faster than rural poverty. This is a matter of concern because a large proportion of India's population still lives in rural areas.

Now let's look at the twelve indicators of the National Multidimensional Poverty Index. NITI Aayog, a Government of India organisation, evolved the National Multidimensional Poverty Index using the following 12 indicators. If an individual is found deprived on these indicators, he or she is considered as multidimensional poor.

The first indicator is nutrition. A household is considered deprived if any child between the ages of 0 to 59 months, or woman between the ages of 15 to 49 years, or man between the ages of 15 to 54 years is found to be undernourished.

The second indicator is child-adolescent mortality. A household is deprived if any child or adolescent under 18 years of age has died in the household in the five-year period preceding the survey.

The third indicator is maternal health. A household is deprived if any woman in the household who has given birth in the 5 years preceding the survey has not received assistance from trained skilled medical personnel during the recent childbirth.

The fourth indicator is years of schooling. A household is deprived if not even one member of the household aged 10 years or older has completed six years of schooling.

The fifth indicator is school attendance. A household is deprived if any school-aged child is not attending school up to the age at which he or she would complete class.

The sixth indicator is cooking fuel. A household is deprived if a household cooks with dung, agricultural crops, shrubs, wood, charcoal, or coal.

The seventh indicator is sanitation. A household is deprived if the household has unimproved or no sanitation facility or it is improved but shared with other households.

The eighth indicator is drinking water. A household is deprived if the household does not have access to improved drinking water or safe drinking water is at least a 30-minute walk from home as a round trip.

The ninth indicator is housing. A household is deprived if the household has inadequate housing - the floor is made of natural materials, or the roof or wall are made of rudimentary materials.

The tenth indicator is electricity. A household is deprived if the household has no electricity.

The eleventh indicator is assets. A household is deprived if the household does not own more than one of these assets - radio, TV, telephone, computer, animal cart, bicycle, motorbike, or refrigerator; and does not own a car or truck.

The twelfth indicator is bank account. A household is deprived if no household member has a bank account or a post office account.

So students, as you can see, the National Multidimensional Poverty Index looks at many different aspects of life, not just income. This gives us a much better understanding of who is really poor and what kind of help they need.

Now let's discuss inter-state disparities. Poverty in India also has another aspect or dimension. The proportion of poor people is not the same in every state. Although state-level poverty has witnessed a significant decline from the levels of early seventies, the success rate of reducing poverty varies from state to state.

It is pertinent to note that the states of Karnataka, Tamil Nadu, Delhi, Punjab, Himachal Pradesh, Andhra Pradesh, Haryana, and Maharashtra had an HCR which was less than 10 percent in 2019-21. In the meantime, remarkable strides have been made by states like Bihar, Uttar Pradesh, Madhya Pradesh, and Rajasthan. Studies also show states following different steps to reduce poverty. For example, Kerala has focused more on human resource development. In West Bengal, land reform measures have helped in reducing poverty. In Andhra Pradesh and Tamil Nadu, public distribution of food grains has been responsible for the improvement.

So students, you can see that different states have had different levels of success in reducing poverty. Some states like Kerala and Tamil Nadu have done very well, while others still have a long way to go.

Now let's talk about vulnerable groups. The proportion of people below the poverty line is also not the same for all social groups and economic categories in India. Social groups which are most vulnerable to poverty are Scheduled Caste and Scheduled Tribe households. Similarly, among the economic groups, the most vulnerable groups are the rural agricultural-labour households and the urban casual-labour households.

Graph 3.2 shows the percentage of poor people in all these groups. Although the average of people below the poverty line for all groups in India is 22 percent, however, 43 out of 100 people belonging to Scheduled Tribes are not able to meet their basic needs. Similarly, 34 percent of casual workers in urban areas are below the poverty line. About 34 percent of casual farm labour in rural areas and 29 percent of Scheduled Castes are also poor. The double disadvantage of being a landless casual wage labour household in the socially disadvantaged social groups of the scheduled caste or the scheduled tribe population highlights the seriousness of the problem. Some recent studies have shown that except for the scheduled tribe households, all the other three groups - that is, Scheduled Castes, rural agricultural labourers, and the urban casual labour households - have seen a decline in poverty in the 1990s.

Apart from these social groups, there is also inequality of incomes within a family. In poor families, all suffer, but some suffer more than others. In some cases, women, elderly people, and female infants are denied equal access to resources available to the family.

Now let's look at the global poverty scenario. Is India the only country having poor people? Of course not, students. For making comparisons between developing countries, many international organisations like the World Bank use a uniform standard for the poverty line - minimum availability of the equivalent of 2.15 dollars per person per day. The proportion of people in different countries living in extreme economic poverty - defined by the World Bank as living on less than 2.15 dollars per day - has fallen from 16.27 percent in 2010 to 9.05 percent in 2019. Why has the dollar been used there? In India, we use rupee as a national currency, each country has its own currency. American dollar is used by international agencies to compare data across countries.

Although there has been a substantial reduction in global poverty, it is marked with great regional differences. Poverty declined substantially in China and Southeast Asian countries as a result of rapid economic growth and massive investments in human resource development. The proportion of poor in China has become 0.1 percent in 2020. The World Bank reports reveal that in the countries of South Asia - India, Pakistan, Sri Lanka, Nepal, Bangladesh, Bhutan, Afghanistan, and Maldives - the decline has also been rapid from 13 percent in 2017 to 11 percent in 2021. With decline in the percentage of the poor, the number of poor has also declined significantly from 233 million in 2017 to 207 million in 2021.

In Sub-Saharan Africa, poverty has in fact declined from 36.6 percent in 2017 to 35 percent in 2019. In Latin America and Caribbean, the ratio of poverty has increased from 4.4 percent in 2017 to 4.6 percent in 2021. Poverty has also resurfaced at 3 percent in 2000 in some of the former socialist countries like Russia, where officially it was non-existent earlier.

Looking at Table 3.2, we can see the head count ratio comparison among some selected countries. Nigeria has 30.9 percent of its population below 2.15 dollars a day, Bangladesh has 9.6 percent, India has 11.9 percent, Pakistan has 4.9 percent, China has 0.1 percent, Brazil has 5.8 percent, Indonesia has 2.5 percent, and Sri Lanka has 1.0 percent.

Now, from Graphs 3.3 and 3.4, we can identify the areas of the world where poverty ratios have declined. The areas where poverty has declined include South Asia, East Asia and Pacific, and Latin America and Caribbean. The area of the globe which has the largest concentration of the poor is Sub-Saharan Africa. In fact, by 2030, forecasts indicate that nearly 9 in 10 of the extreme poor will live in Sub-Saharan Africa.

Different countries use different poverty lines because the cost of living varies from country to country. What is considered poor in a rich country like the United States would be considered middle class in India. So each country sets its own poverty line based on its level of development and accepted minimum social norms.

Now let's discuss poverty and Sustainable Development Goals. The United Nations Organisation, an international organisation, works with many countries to eradicate poverty. In collaboration with governments of member countries, UN came out with 17 Sustainable Development Goals to be achieved by 2030. Each goal was split into various targets to be achieved by the countries who are members of UN. One of the targets of SDG 1 is reducing the proportion of men, women, and children in all ages living in poverty in all its dimensions at least to half by 2030. The decline in the proportion of poor reflects India's commitment to achieve the target related to Goal 1 - No Poverty. This is very important, students. India has committed to ending poverty in all its forms everywhere by 2030.

Now let's discuss the causes of poverty. There were a number of causes for the widespread poverty in India. One historical reason is the low level of economic development under the British colonial administration. The policies of the colonial government ruined traditional handicrafts and discouraged development of industries like textiles. The low rate of growth persisted until the 1980s. This resulted in fewer job opportunities and low growth rate of incomes. This was accompanied by a high growth of population.

With the spread of irrigation and the Green Revolution, many job opportunities were created in the agriculture sector. But the impact was limited to some parts of India. The industries, both in the public and the private sector, did provide some jobs. But these were not enough to absorb all the job seekers. Unable to find jobs with better income in cities, many people started working as rickshaw pullers, vendors, construction workers, domestic servants, and so on. With irregular small incomes, these people could not afford reasonable shelter. They started living in slums on the outskirts of the cities, and the problems of poverty, largely a rural phenomenon, also became a feature of urban India.

Another feature of high poverty rates has been the huge income inequalities. One of the major reasons for this is the unequal distribution of land and other resources. Despite many policies, we have not been able to tackle the issue of poverty. Major policy initiatives like land reforms, which aimed at redistribution of assets in rural areas, have not been implemented effectively by most of the state governments. Effective implementation of policy could have improved the life of millions of rural poor.

Many other socio-cultural and economic factors are also responsible for poverty. In order to fulfil social obligations and observe religious ceremonies, people in India, including the very poor, spend a lot of money and waste their hard-earned income. Small farmers need money to buy agricultural inputs like seeds, fertilizer, pesticides, and so on. Since poor people hardly have any savings, they borrow or accept loan at higher risk. Unable to repay because of poverty, they become victims of indebtedness. So the high level of indebtedness is both the cause and effect of poverty.

Now let's discuss the anti-poverty measures taken by the government. Removal of poverty has been one of the major objectives of Indian developmental strategy. The current anti-poverty strategy of the government is based broadly on two factors - promotion of economic growth and targeted anti-poverty programmes.

Over a period of thirty years of independent India, lasting up to the early eighties, there was little per capita income growth and not much reduction in poverty. Official poverty estimates, which were about 45 percent in the early 1950s, remained the same even in the early eighties. Since the eighties, India's economic growth has been one of the fastest in the world. The growth rate jumped from the average of about 3.5 percent a year in the 1970s to about 6 percent during the 1980s and 1990s. The two decades of the 21st century - 2000 to 2020 - has also witnessed rapid economic development. The higher growth rates have significantly helped in the reduction of poverty. Therefore, it is becoming clear that there is a strong link between economic growth and poverty reduction. Economic growth widens opportunities and provides the resources needed to invest in human development. This also encourages people to send their children, including the girl child, to schools in the hope of getting better economic returns by investing in education. The poor may not be able to take advantage from the opportunities created by economic growth. However, growth in the agriculture sector is much below expectations. This has a direct bearing on poverty. A large number of poor people live in villages and are dependent on agriculture.

In these circumstances, there is a clear need for targeted anti-poverty programmes. Although there are many schemes which are formulated to affect poverty directly or indirectly, some of them are worth mentioning.

The Mahatma Gandhi National Rural Employment Guarantee Act, 2005, aims to provide 100 days of wage employment to every household to ensure livelihood security in rural areas. It also aimed at sustainable development to address the cause of drought, deforestation, and soil erosion. One-third of the proposed jobs have been reserved for women under this act. The wage rate for unskilled manual workers is revised regularly.

Pradhan Mantri Poshan Shakti Abhiyan, also known as PM Poshan, is a flagship programme of the Government of India. It was initiated with a twin purpose - to improve the nutritional requirement especially calorie and protein intake of the child, and to improve school enrolment and eliminate drop-out from the school. It targets students from Classes I to VIII in government, government-aided schools, and special training centres under the Right to Education Act. This scheme is implemented with the support of local governments and various community organisations. This programme encourages poor children, belonging to disadvantaged sections, to attend school more regularly and helps them concentrate on classroom activities.

Now let's talk about some other important schemes. Pradhan Mantri Surakshit Matritva Abhiyan was launched in 2016 with the aim to reduce maternal and infant mortality by providing quality antenatal care to the pregnant women throughout the country. The scheme works towards safe pregnancies and deliveries and addresses gaps in the service of the maternal care to ensure constant and regular treatment to the beneficiaries. Services are provided on the ninth day of every month. This programme follows a systematic approach for engagement with private practitioners, motivating them to volunteer in the scheme at government health facilities.

Pradhan Mantri Ujjwala Yojana aims towards women empowerment in rural areas. It encourages the use of smoke-free kitchen, thereby saving them from chronic respiratory disorders and poor eyesight. It was launched in 2016 with an aim to provide clean cooking fuel - liquefied petroleum gas or LPG - to economically poor households, especially in the rural areas, who cook using traditional methods by using either coal, wood, or cow dung. Its target beneficiaries are Below Poverty Line households, Scheduled Castes, Scheduled Tribes, forest dwellers, and marginalised group households. To encourage the use of LPG, the scheme provides a completely free connection, including the first refill and a stove. Over the years, there is an increase in LPG coverage throughout the country. Connections are issued in the name of the female member of the family. This scheme also promotes environment sustainability by reducing deforestation and carbon emission generated from burning coal and firewood. The use of clean cooking fuel, that is LPG, means less time and effort in collecting firewood and encourages women to participate in social and economic activities.

Now let's discuss the challenges ahead. Poverty has certainly declined in India. But despite the progress, poverty reduction remains India's most compelling challenge. Wide disparities in poverty are visible between rural and urban areas and among different states also. Certain social and economic groups are more vulnerable to poverty. Poverty reduction is expected to make a better India. This would be possible mainly due to higher economic growth, increasing focus on universal education, declining population growth, empowerment of the women, and the economically weaker sections of society would also facilitate the same.

The income-based definition of poverty captures only a limited part of what poverty really means to people. It is about a minimum subsistence level of living rather than a reasonable level of living. Many scholars advocate that we must broaden the concept into human poverty. A large number of people may have been able to feed themselves. But do they have education? Or shelter? Or health care? Or job security? Or self-confidence? Are they free from caste and gender discrimination? Is the practice of child labour still common? Worldwide experience shows that with development, the definition of what constitutes poverty also changes. In this chapter, we have looked at the different approaches to measure poverty. The National Multidimensional Poverty Index put forward by NITI Aayog reveals that the number and proportion of multidimensionally poor has declined in India. This may be due to the array of Government interventions initiated in recent years.

Now students, let me summarize what we have learned in this chapter. In this chapter, we have looked at the different approaches of measuring poverty. The National Multidimensional Poverty Index, put forward by NITI Aayog in collaboration with UNDP and Oxford Policy and Human Development Initiative, reveals that on the Headcount Ratio of multidimensionally poor, there has been a considerable reduction. Even when some of the states like Kerala and Tamil Nadu have reached less than 10 percent on the HCR front, much is yet to be achieved by the other states. However, it is also to be noted that due to the array of Government intervention policies between 2005-06 and 2019-21, there has been a significant decline in the number of MPI poor in the states of Bihar, Uttar Pradesh, Madhya Pradesh, and Rajasthan.

Now let's go through the exercises at the end of the chapter. I want you to pay attention because these are the kinds of questions that come in your exams.

Exercise 1: How is the poverty line estimated in India?

Students, the poverty line in India is estimated based on the minimum level of consumption expenditure required to satisfy the basic nutritional requirements. The government calculates the cost of a basket of goods that provides the required calories - 2400 calories per person per day in rural areas and 2100 calories per person per day in urban areas. This cost includes not just food, but also clothing, footwear, fuel, electricity, education, and medical needs. The total cost of these items is multiplied by their prices to get the poverty line. If a person's consumption expenditure is below this line, they are considered poor. Recently, the government has also started using the Multidimensional Poverty Index, which looks at 12 different indicators including health, education, and standard of living.

Exercise 2: Do you think that the present methodology of poverty estimation is appropriate?

This is a thought-provoking question, students. The present methodology has its advantages and limitations. The consumption-based method is simple and easy to measure, but it only captures the economic aspect of poverty. It does not consider other important aspects like health, education, sanitation, and so on. The Multidimensional Poverty Index addresses this limitation by looking at multiple dimensions. However, both methods may not capture all aspects of poverty, such as social exclusion, vulnerability, and lack of empowerment. Some critics also argue that the poverty line is set too low and does not reflect the true cost of living. So while the present methodology is a good starting point, there is always room for improvement.

Exercise 3: Describe poverty trends in India since 1993.

Students, let me describe the poverty trends in India since 1993. According to the consumption-based estimates, poverty declined from 45 percent in 1993-94 to 37 percent in 2004-05, to 30 percent in 2009-10, and to 22 percent in 2011-12. However, the number of poor remained at about 40 crores during the 1990s because the population was growing. Both the proportion and number of poor declined during 2000-2011. According to the Multidimensional Poverty Index, poverty declined from 25 percent in 2015-16 to 15 percent in 2019-21. About 13.5 crore people escaped multidimensional poverty during this period. The decline was more sharp in rural areas than in urban areas.

Exercise 4: Discuss the major reasons for poverty in India.

Students, there are several major reasons for poverty in India. First, the low level of economic development during the British colonial period left India very poor at the time of independence. Second, the slow growth of the Indian economy until the 1980s meant fewer job opportunities and low incomes. Third, the rapid population growth put pressure on resources and reduced per capita income. Fourth, unequal distribution of land and other resources meant that benefits of growth did not reach everyone. Fifth, lack of effective implementation of policies like land reforms. Sixth, social factors like caste discrimination and social exclusion. Seventh, economic factors like indebtedness and lack of access to credit. And finally, lack of adequate social security measures.

Exercise 5: Identify the social and economic groups which are most vulnerable to poverty in India.

Students, the social groups most vulnerable to poverty are Scheduled Caste and Scheduled Tribe households. Among economic groups, the most vulnerable are rural agricultural labour households and urban casual labour households. According to the data, 43 percent of Scheduled Tribes, 34 percent of casual farm labour in rural areas, 34 percent of casual labour in urban areas, and 29 percent of Scheduled Castes are below the poverty line. This is much higher than the national average of 22 percent.

Exercise 6: Give an account of interstate disparities of poverty in India.

Students, poverty in India varies significantly across states. States like Karnataka, Tamil Nadu, Delhi, Punjab, Himachal Pradesh, Andhra Pradesh, Haryana, and Maharashtra have achieved an HCR of less than 10 percent in 2019-21. On the other hand, states like Bihar, Uttar Pradesh, Madhya Pradesh, and Rajasthan still have higher poverty rates. However, these states have made remarkable progress in recent years. Different states have followed different approaches to reduce poverty. Kerala focused on human resource development, West Bengal on land reforms, and Andhra Pradesh and Tamil Nadu on public distribution of food grains. This shows that there is no one-size-fits-all solution to poverty, and each state needs to tailor its approach according to its specific conditions.

Exercise 7: Describe global poverty trends.

Students, globally, poverty has declined significantly over the years. The proportion of people living in extreme poverty, defined as living on less than 2.15 dollars per day, has fallen from 16.27 percent in 2010 to 9.05 percent in 2019. However, this decline has been uneven across regions. China and Southeast Asian countries have seen rapid decline due to economic growth and investment in human resource development. China's poverty rate is now just 0.1 percent. In South Asia, poverty declined from 13 percent in 2017 to 11 percent in 2021. However, Sub-Saharan Africa still has the highest poverty rate at about 35 percent, and by 2030, it is estimated that 9 out of 10 extremely poor people will live in Sub-Saharan Africa.

Exercise 8: Describe the role of government in reducing poverty in India.

Students, the government plays a crucial role in reducing poverty through multiple approaches. First, promoting economic growth through industrial development, agricultural improvements, and infrastructure development. Higher economic growth creates more jobs and increases incomes. Second, implementing targeted anti-poverty programmes like Mahatma Gandhi National Rural Employment Guarantee Act, which provides 100 days of wage employment to rural households. Third, providing social security through schemes like Pradhan Mantri Poshan Shakti Abhiyan for school children, Pradhan Mantri Surakshit Matritva Abhiyan for pregnant women, and Pradhan Mantri Ujjwala Yojana for clean cooking fuel. Fourth, implementing land reforms and ensuring equal opportunities for marginalized communities. Fifth, investing in education and healthcare to improve human development. The government has also committed to the Sustainable Development Goal of ending poverty by 2030.

Exercise 9: What do you understand by human poverty?

Students, human poverty is a broader concept than just low income. It refers to the deprivation of human capabilities and opportunities that people need to live a decent life. While income-based poverty focuses on whether people have enough money to meet their basic needs, human poverty looks at whether people have access to education, healthcare, clean water, sanitation, shelter, and other essential services. It also considers whether people have the freedom to participate in society, whether they are free from discrimination, and whether they have the capability to live a fulfilling life. Many people may have enough to eat but still be considered humanly poor if they lack education, health care, or other basic facilities. The concept of human poverty recognizes that poverty is multidimensional and cannot be measured solely by income.

Exercise 10: Who are the poorest of the poor?

Students, the poorest of the poor are those who are most vulnerable and face multiple disadvantages. According to the data, Scheduled Tribes are the poorest of the poor, with 43 percent of them living below the poverty line. This is followed by casual labour households - both rural and urban - where 34 percent are poor. Scheduled Castes also have a high poverty rate of 29 percent. The poorest of the poor are those who face double disadvantage - for example, a landless agricultural labourer who belongs to a Scheduled Caste or Scheduled Tribe. These people face both economic and social disadvantages, making it very difficult for them to escape poverty. Women, children, and elderly people in these communities suffer even more.

Exercise 11: What are the main features of the Mahatma Gandhi National Rural Employment Guarantee Act 2005?

Students, the Mahatma Gandhi National Rural Employment Guarantee Act, also known as MGNREGA, was passed in 2005. Its main features are as follows. First, it guarantees 100 days of wage employment in a financial year to every rural household whose adult members are willing to do unskilled manual work. Second, it aims to ensure livelihood security in rural areas. Third, it also aims at sustainable development by addressing issues like drought, deforestation, and soil erosion. Fourth, one-third of the jobs have been reserved for women. Fifth, the wage rate for unskilled manual workers is revised regularly. Sixth, the scheme provides unemployment allowance if the government fails to provide employment within 15 days of applying. Seventh, it promotes transparency and accountability by requiring the government to maintain records of all works and payments.

Exercise 12: Differentiate between consumption based poverty line and NMP Index based poverty estimates.

Students, there are several differences between these two approaches. First, the consumption-based poverty line focuses only on income or expenditure, while the National Multidimensional Poverty Index considers multiple dimensions. Second, the consumption-based method classifies a person as poor if their spending is below a certain threshold, while the multidimensional approach looks at 12 different indicators including nutrition, health, education, and standard of living. Third, the consumption-based method is easier to measure but may miss other important aspects of poverty, while the multidimensional approach gives a more complete picture. Fourth, the consumption-based poverty line varies with price changes, while the multidimensional index is based on specific indicators that do not change with prices. Fifth, a person may be above the consumption poverty line but still be multidimensionally poor if they lack access to basic services like electricity, sanitation, or education.

Exercise 13: List the indicators used to estimate multidimensional poor in India.

Students, the twelve indicators used to estimate multidimensional poor in India are as follows. First, nutrition - whether any member of the household is undernourished. Second, child-adolescent mortality - whether any child has died in the household in the past five years. Third, maternal health - whether pregnant women received skilled medical assistance during childbirth. Fourth, years of schooling - whether any member aged 10 or above has completed six years of schooling. Fifth, school attendance - whether all school-aged children are attending school. Sixth, cooking fuel - whether the household uses clean cooking fuel like LPG. Seventh, sanitation - whether the household has access to proper sanitation facilities. Eighth, drinking water - whether the household has access to safe drinking water. Ninth, housing - whether the housing is adequate with proper floor, roof, and walls. Tenth, electricity - whether the household has electricity. Eleventh, assets - whether the household owns important assets like radio, TV, telephone, bicycle, motorbike, or refrigerator. Twelfth, bank account - whether any household member has a bank account.

Now students, let me give you a quick recap of everything we have learned in this chapter. We started by understanding what poverty means through two real-life examples - one from an urban area and one from rural area. We learned about social exclusion and vulnerability, which are important concepts to understand poverty. We then discussed how poverty is measured - through the poverty line based on consumption expenditure, and also through the National Multidimensional Poverty Index which looks at 12 different indicators. We saw the poverty trends in India since 1993 and how poverty has declined over the years, though the number of poor remained high for some time due to population growth. We discussed interstate disparities, with some states doing very well and others still struggling. We identified the most vulnerable groups - Scheduled Castes, Scheduled Tribes, and casual labour households. We looked at the global poverty scenario and saw how different countries are at different stages of poverty reduction. We discussed the causes of poverty - historical, economic, social, and cultural factors. We then looked at the various anti-poverty measures taken by the government, including MGNREGA, PM Poshan, and Pradhan Mantri Ujjwala Yojana. Finally, we understood the concept of human poverty, which goes beyond just income to include education, health, and other basic capabilities.

Students, poverty is a complex problem, but it is not insurmountable. With the right policies, economic growth, and social justice, we can definitely reduce and eventually eliminate poverty from our country. It is our collective responsibility to work towards this goal. I hope you have understood this chapter well. Thank you for your attention, and I will see you in the next class.