CAUSES OF POVERTY IN INDIA

Made by: Nisarg PatelParthasarathi KhirwadkarSwetang FinviyaAarsh AgrawalSamarth ParikhMihir MadhaniRushan Mukherjee

Poverty in India Poverty in India is widespread, with the nation estimated to have a

third of the world's poor. In 2011, World Bank stated, 32.7% (39,56,70,000)of the total Indian people fall below the international poverty line of US$ 1.25 per day (PPP) while 68.7% live on less than US$ 2 per day while the estimated in 2004 was to be 24 %.

According to a new poverty Development Goals Report, as many as 320 million people in India and China are expected to come out of extreme poverty in the next four years, while India's poverty rate is projected to drop to 22% in 2015.The report also indicates that in Southern Asia, however, only India, where the poverty rate is projected to fall from 51% in 1990 to about 22% in 2015, is on track to cut poverty in half by the 2015 target date.

The latest UNICEF data shows that one in three malnourished children worldwide are found In India, whilst 42 percent of the nation's children under five years of age are underweight. It also shows that a total of 58 percent of children under five surveyed were stunted. Rohini Mukherjee, of the Naadi foundation-one of the NGO's that published the report-stated India is "doing worse than sub-Saharan Africa,".

The 2011 Global Hunger Index (GHI) Report places India amongst the three countries where the GHI between 1996 and 2011 went up from 22.9 to 23.7, while 78 out of the 81 developing countries studied, including Pakistan, Nepal, Bangladesh, Vietnam, Kenya, Nigeria, Myanmar, Uganda, Zimbabwe and Malawi, succeeded in improving hunger condition.

Tendulkar Poverty line Tendulkar was a member of the Prime Minister's

Economic Advisory Council (PMEAC) from 2004 to 2008. Suresh Tendulkar headed committee named as Suresh Tendulkar Committee to look into the people living under poverty line in India. Prof. Tendulkar's pioneering contribution was his extensive work on poverty and estimation of people below poverty line (BPL). A committee was formed by government of India in 2009, with Tendulkar as Chairman to 'report on methodology of estimation of poverty'. In 2009, this committee came out with a new method to calculate poverty. According to this method, the number of the poor in India in 2004–05 rose from 27.5 per cent of the total population to 37.2 per cent. This report has also helped strengthen the case for donating to the needy and giving In past, poverty was estimated by looking at a limited view of money required for stipulated minimum calorie intake by individuals. But the Tendulkar committee moved to a wider definition, including spending on food as well as education, health, light(electricity), clothing and footwear.

Urban Poverty

The main causes of urban poverty are predominantly due to impoverishment of rural peasantry that forces them to move out of villages to seek some subsistence living in the towns and cities. In this process, they even lose the open space or habitat they had in villages albeit without food and other basic amenities. When they come to the cities, they get access to some food though other sanitary facilities including clean water supply still elude them. And they have to stay in the habitats that place them under sub-human conditions. While a select few have standards of living comparable to the richest in the world, the majority fails to get two meals a day.

Rural Poverty

The causes of rural poverty are manifold including inadequate and ineffective implementation of anti-poverty programmes. The overdependence on monsoon with non-availability of irrigational facilities often result in crop-failure and low agricultural productivity forcing farmers in the debt-traps. The rural communities tend to spend large percentage of annual earnings on social ceremonies like marriage; feast etc. Our economic development since Independence has been lopsided .There has been increase in unemployment creating poverty like situations for many. Population is growing at an alarming rate. The size of the Indian family is relatively bigger averaging at 4.2. The other causes include dominance of caste system which forces the individual to stick to the traditional and hereditary occupations.

Causes of Poverty in India Rapidly rising population (The population during the last 45 years has increased at the rate of 2.2% per annum. On average 17 million people are added every year to its population which raises the demand for consumption goods considerably. Low Productivity in Agriculture (The level of productivityin agriculture is low due to subdivided and fragmented holdings, lack of capital, use of traditional methods of cultivation, illiteracy etc. This is the main cause of poverty in the country. Under Utilized Resources: (The existence of under employment and disguised unemployment of

human resources and under utilization of resources has resulted in low production in agricultural sector. This brought a down fall in their standard of living.)

Low Rate of Economic Development (The rate of economic development in India has been below the required level. Therefore, there persists a gap between level of availability and requirements of goods and services. The net result is poverty.)

Price Rise(The continuous and steep price rise has added to the miseries of poor. It has benefited a few people in the society and the persons in lower income group find it difficult to get their minimum needs.)

Unemployment (The continuously expanding army of unemployed is another cause of poverty. The job seeker is increasing in number at a higher rate than the expansion in employment opportunities.)

Shortage of Capital and Able Entrepreneurship (Capital and able entrepreneurship have important role in accelerating the growth. But these are in short supply making it difficult to increase production significantly.)

Social Factors (The social set up is still backward and is not conducive to faster development. Laws of inheritance, caste system, traditions and customs are putting hindrances in the way of faster development and have aggravate" the problem of poverty.)

Political Factors (The Britishers started lopsided development in India and reduced Indian economy to a colonial state. They exploited the natural resources to suit their interests and weaken the industrial base of Indian economy.

In independent India, the development plans have been guided by political interests. Hence, the planning a failure to tackle the problems of poverty and unemployment.)

Overpopulation In India Overpopulation in India is not just a myth but a crude fact to both the

nationals and the government. According to an estimation, around 53% of the below 5 years Indian population is malnourished and 37% had no access to safe drinking water. In Mumbai, about 15 million people are compelled to reside at the sidewalks and more than 25% of Indian populace falls under the poverty line. This scenario is good enough to prove that overpopulation problems in this country have become extremely concerning.

Another survey revealed that India is one country that contributes largest daily counts in the total world population which sums up to an increase of 12 million people every year. Slums of India are simply over boarded with countless children taking birth every day. People, who are unable to arrange for two times’ foods on regular basis, do not refrain from giving birth to babies. These street children simply grow up without adequate food, facilities and education. Thus they contribute to the overwhelming unemployment in India. It is almost impossible for the government to award all the young people of India with a job and sufficient food.

Low Productivity in Agriculture

The biggest challenge facing India's policy makers is the persisting high incidence of poverty.

One of the reasons for the high incidence of poverty in India is its backward agriculture,whose productivity per hectare and per capita is amongst the lowest. The low per capita production is not only due to huge population, but also due to low productivity, which is only 64 percent of the world average.

The productivity potential of Indian agriculture has been amply demonstrated in Punjab, where it is nearly equal to those of developed countries. If India attains the productivity level already achieved in Punjab, the national income of India would be more than double of what it is today. Taking into consideration the vast untapped potential of Indian agriculture, the pool of unutilized scientific knowledge and the eagerness of Indian farmers respond to opportunities, neither Indian agriculture should remain backward, nor our people should remain almost the poorest in the world.

Poverty due to Unemployment

Unemployment leads to financial crisis and reduces the overall purchasing capacity of a nation. This in turn results in poverty followed by increasing burden of debt. Now, poverty can be described in several ways. As per the World Bank definition, poverty implies a financial condition where people are unable to maintain the minimum standard of living.

In India, the problems of unemployment and poverty have always been major obstacles to economic development. Underemployment and unemployment have crippled the Indian economy from time to time. Even during the period of good harvest, the Indian farmers are not employed for the entire year. Excessive population is another major problem as far as Indian economy is concerned. Regional disparity is also crucial in this context. A part of the urban workforce in India is subjected to sub-employment. Mass migration from rural to urban regions is adding to the problems of unemployment and poverty in India

Ending Poverty The government should become more accountable, carry out labour and land

reforms, ensure higher credit flow to rural India and improve education to bring down poverty in India, according to a study carried out by London [ School of Economics."India is growing at an unprecedented rate. But there are concerns. How much of the benefits of growth are shared with the poor?" the study commissioned by World Bank and Department of International Development said.

"Given its large population, the pattern of poverty reduction in India will have a significant bearing on whether the millennium development goal of halving global poverty by 2015 is achieved," the study jointly carried out by Timothy Besley, Robin Burgess and Berta Esteve-Volart, said.

India has reduced its poverty level to less than 26 per cent but the number of people below poverty line is still a staggering 260 million (26 crore).

During the last 40 years, the study said economic growth was given more importance than income distribution and inequality. Service sector growth was one of the important source of poverty reduction, it added.

The London School of Economics mooted a five point agenda to reduce poverty in India - accountability of government, relaxation of labour laws, increasing access to bank finance to rural poor, increasing literacy level and land reforms.

Elaborating on the 5-point agenda, Besley said political economy must take centre stage in efforts to reduce poverty and government needs to be more responsive to needs of citizens.

Deregulation of labour laws to make it more pro-employer has helped some of the states to log higher economic growth and reduce urban poverty while those adopting pro-worker policies witnessed higher unemployment, he said.