Poverty in India

Poverty is defined as a lack of material goods or a low level of income. In India, the Planning Commission was the nodal agency for estimating Poverty. It had set up various expert committees from time to time for setting the poverty line in India and methodology for constructing it. Presently the responsibility is entrusted with the NITI Aayog based on the data captured by the National Sample Survey Office (NSSO) under the Ministry of Statistics and Programme Implementation (MOSPI).

Poverty is an underlying cause of many social issues in this article we will discuss different dimensions of it including its :

• Causes
• Widespread impact on the society
• Calculation methods(poverty line, headcount method)
• Various reports on the declining poverty rate

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Types of Poverty

There are two types of Poverty and multiple approaches to study this topic. The kinds of Poverty are absolute Poverty and relative Poverty. 

Absolute poverty

It can be defined as the inability to procure items for the basic sustenance of life such as food, clothing, housing etc. A person is considered to be poor if they are unable to satisfy their basic needs. Based on a list of essential sustenance items, countries assign a particular amount of money needed to procure these items. If individuals cannot procure these items, they are considered poor and below the poverty line (those below the minimum amount assigned towards the procurement of these items). This is called absolute Poverty.

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Relative Poverty

On the contrary, Poverty in India is compared to individuals. For example, I earn Rs 100 whereas my neighbour earns Rs 200, and then I am relatively poorer than my neighbour.

Capabilities Approach: This theory has been propounded by Nobel Laureate Amartya Sen. It studies Poverty from the standpoint of an individual’s abilities. An individual has to be healthy and educated to lead a promising professional career and earn his income. If there are no opportunities to acquire educational qualifications and good health, it can impair an individual’s working, leading to Poverty. Therefore, Sen calls on the government to focus its investments and policy decisions on improving public health and education.

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Despite massive growth since independence, why has Poverty persisted? 

• The Colonial Legacy: After several centuries of colonial penetration and rule, India attained independence as one of the poorest nations in the world. The poverty rate in India and The distribution of income and wealth in India at the end of the colonial period were unequal, both by class and region, which is persisting in India
• Correlation of Poverty with other problems: High poverty levels are synonymous with other issues like poor quality of life, deprivation, malnutrition, low human development 
• Presence of the vicious cycle of Poverty: In this cycle, lifelong barriers and troubles are passed on from one generation to the next. Moreover, the vicious cycle of Poverty prevents most from escaping it unless adequate and sustained aid is provided
• Policy Failure: The ‘Trickle-down effect of growth’ has been relatively weak. Further, lack of assets such as land, capital, and skills constrain prevent the poor from participating and benefiting from growth
• Issues in the Agriculture sector: The agricultural industry’s poor productivity and causes of poverty in India is a significant cause of Poverty. A variety of factors can cause low productivity. It is primarily due to scattered and subdivided landholdings, a lack of resources, illiteracy about modern farming technology, conventional farming methods, wastage during storage, etc
• Other factors: Apart from economic factors, social factors often obstruct India’s eradication efforts. The laws of inheritance, the caste system, and some other traditions are obstacles in this regard. These factors are responsible for rampant Poverty among women and lower caste people

Committee reports in India on Poverty:

Some of the critical committees set up by the government after independence to tackle Poverty were the following: 

• YK Alagh Committee (1979): It established a poverty line for urban and rural regions based on nutritional needs and assigned a consumption expenditure figure. This line was updated every year to account for inflation
• Lakdawala Committee (1993): The poverty line and dietary needs methodology were retained by this committee. However, it is critical that each state establishes a poverty limit that is based on variety and distinguishes between poverty in rural and urban regions
• Rangarajan Committee report (2012): As an airline, it established a poverty level of Rs 47 per person per day in urban regions and Rs 32 in rural areas. The World Bank has established a daily worldwide poverty limit of USD 1.90 per person

Suresh Tendulkar Committee report (2009): The following were the recommendations: 

• Change from a consumption-based strategy to a more inclusive approach to poverty measurement. People’s eating patterns have evolved, and it was necessary to include more elements than just calories for basic nourishment, according to the committee
• It also suggested that various intoxicants, education, fuel, medical, and cleanliness be added to the mix
• It abolished the disparities between urban and rural areas in other states by establishing a uniform poverty level
• Health and education spending by individuals

Government intervention

• The government has actively alleviated Poverty in recent times. As a result, about 271 million people were lifted out of Poverty in India in a decade (2005-15). The Multi-Dimensional Poverty Index released by Oxford Institute and the United Nations Development Program (UNDP) acknowledges this. However, many individuals are still living a life in Poverty

Here are some of the government schemes that have helped the people: 

• National Mission on Foundational literacy and numeracy
• Ayushman Bharat Scheme
• Skill India Mission
• PM Awaas Yojana
• MGNREGA

Policy recommendations on reducing Poverty: 

Universal Basic Income (UBI): 

• UBI, also known as citizen’s income, guaranteed minimum income, or basic income, is a government-guaranteed payment that each citizen gets. The UBI payment is based on the core premise of providing enough to cover the necessary critical significance. The agricultural cost of living gives financial stability to all citizens, regardless of their birth circumstances
• Because of the possibility of job losses caused by automation, the concept of a universal basic income has gained traction in the West
• According to the Economic Survey 2016-17, universal basic income should be used to replace all present cash handouts. According to the survey, UBI should be used to replace existing social assistance and anti-poverty programmes such as MGNREGA, PMJSY, and others
• According to the survey, a working JAM (Jan Dhan, Aadhar, and Mobile) system is one of the two criteria for a successful UBI. It guarantees that the cash transfer is sent directly to the beneficiary’s account and that the program’s cost-sharing is negotiated between the Centre and the States

Conditional Cash Transfer Schemes for Human Poverty Alleviation: These schemes are designed to alleviate extreme poverty in the near term while preserving the long-term development of human capacities. This initiative marks a shift in the government’s emphasis from supply to demand.

Public investments in human capital and public goods have large beneficial effects on private-sector productivity, with estimated rates of return ranging from 15% to upwards of 45%.

Multidimensional Poverty Index (MDP)

• To tackle the drawbacks associated with the poverty line, UNDP, in association with Oxford Poverty and Human Development Initiative (OPHI), has developed the Multidimensional Poverty Index (MDP) for the 107 developing countries. MDP uses Health, Education and Standard of Living indicators to determine the incidence and intensity of Poverty experienced by a population
• Dimensions (Indicators)

o Health (Child Mortality, Nutrition)

o Education (Years of Schooling, School Attendance)

o Standard of living (Cooking Fuel Sanitation, Drinking Water, Electricity, Housing Assets)

•  Each indicator is given a specific weight. A person is multidimensional poor if they are deprived of one-third or more (33% minimum) of the arrows
•  According to global MPI 2020, India’s rank is 62nd among 107 developing countries with 0.123. India’s neighbours are ranked as Sri Lanka (25th), Bhutan (68th), Nepal (65th), Bangladesh (58th), China (30th), Myanmar (69th) and Pakistan (73rd)

Conclusion

Finally, poverty is a problem that affects the whole nation, not just one person. It should also be dealt with as soon as possible by putting in place appropriate solutions. Furthermore, poverty eradication is now a must for people’s, society’s, country’s, and economy’s long-term and inclusive development.