INTRODUCTION

Poverty is one of the most important problems facing

Indian economy today. It is a socio-economic problem.
The concept of poverty differs from country to country
depending upon what a particular country accepts as a
reasonable standard of living of its people. Poverty is
defined as the lack of basic necessities of material well
being. It is synonymous with deprivation, malnutrition,
illiteracy, ill health and poor quality of life.

CONCEPT OF POVERTY AND POVERTY LINE

Poverty is defined as the situation in which an

individual fails to earn income sufficient to buy him
minimum means of subsistence.
Minimum means of subsistence means:
A reasonable satisfactory level of nutritional diet.
Minimum required clothing, housing and furniture.
Minimum level of health facilities, clean water and
education.

POVERTY LINE
It is the estimated minimum level of
income needed to secure the
necessities of life. The poverty line is
not the same in all countries.
Below Poverty Lineis an economic
benchmarkused by thegovernmentto
identify individuals and households in
need of government assistance and aid.

THERE ARE TWO TYPES OF POVERTY WHICH IS

EXPLAINED BELOW WITH THE HELP OF DIFFERENCE :

Relative
Poverty

Absolute
Poverty

1. It refers to poverty of people

relative other people, regions or
nations.

1. It refers to total number of

people living below poverty line.

2. When we say India is relatively

poor, then it is comparison with
other countries.

2. The concept has relevance for

less developed countries and the
concept has no relevance for
developed countries.

3. India is relatively one of the

3. In India, 29.8% of the total
poorest countries of the world as its population is absolutely poor.
per capita income is less than
dollar.

VICIOUS CIRCLE OF POVERTY

Vicious circle of poverty is defined as a
circular constellation of forces tending
to act and react upon one another in
such a way to keep a poor country in a
state of poverty. Two main vicious
circles are shown below :

PANEL A

DEMAND SIDE OF
CAPITAL
Under Development

Low Capital Formation

Productivity

Low

Low Investment

Low Real

Income

Low Demand,
Limited Size Of Market

EXPLANATION TO PANEL A
Panel A shows vicious circle of poverty from
demand side of capital. It shows that in an
underdeveloped country total output is low. It
shows in low real income. Consequently, people
are able to save less which implies low demand.
Low demand requires low investment. It means
low capital formation. A country with low capital
investment will be underdeveloped and process
gets repeated again.

PANEL B
SUPPLY SIDE OF
CAPITAL
Under Development

Low Capital
formation

Low Productivity

Low Investment

Low Real Income

Low Saving

EXPLANATION TO PANEL B
Panel B shows vicious circle of poverty from
supply side of capital. It shows that in an
underdeveloped country, productivity is low
which results in low real income. When people
have less real income, demand falls.
Consequently, investment falls as size of market
has reduced. It results in low capital formation,
low productivity and low level of income.

CAUSES OF POVERTY
Rapid population growth among the poor: A high rate
of population growth in India, particularly among poor,
is responsible for the problem of poverty in the country.
Population growth among poor people is high because
illiteracy, traditional attitudes, lack of family planning
practices, preference to the male child, etc. Clearly, with
large sized families and low income, they are unable to
meet the basic minimum needs of the family members.

Unemployment and Indebtedness: with 28

million unemployed people, India is in the grip of
chronic, unemployment and underemployment. It leads
to lower output and hence, lower income and heavy
indebtedness. The problem of unemployment and
indebtedness is making the problem of poverty more
acute.

Low Rate of Economic Development: Low rate of

economic development is a very important factor that
has led to poverty. Low rate of economic development
implies low per capita income, which implies low
standard of living. Low growth rate of per capita income
has tended to sustain poverty.

Low Education: Another major cause of poverty is

low level of education of the poor. Poor people are
illiterate or semi- educated and, therefore, they can do
only low paid jobs. This explains low levels of income
among poor. Illiterate farmers are not able to use modern
techniques of farming.

Inflationary pressures: the steep and continuous

rises in prices, particularly of essential commodities like
vegetables, fruits, medicines etc., has added to the
miseries of the poor. Sharp rise has led to fall in real
income of fixed and low income earners. This has led to
the fall in the purchasing power. This in turn, has led to
low standard of living.

Social Factors: Various Social factors, like caste

system, joint family system, religious beliefs, law of
inheritance, etc. have hindered the process of
economic growth. For eg. Farmers are orthodox and
want to use primitive methods of farming.

Capital

Deficiency: Capital formation is a very

important factor that can lead to economic growth

and fall in poverty. In India, capital deficiency exists.
It results in low capacity and poverty.

POLICIES AND PROGRAMMES TO ALLEVIATE POVERTY.

GENERAL MEASURES

The growth of economic growth should be raised :

economic growth can be helpful in removing poverty. It was felt
that raised economic growth would benefit the underdeveloped
region and more backward sections of the society.

Various Beneficiary- Oriented programmes need to be

strengthened: for this, local institutions have to involved in
alleviation programmes. The activities should be organized on
the operative basis. Major training programmes should be taken
up to improve the skills of potential workers.

To provide minimum basic amenities: the provision of

basic amenities should be made available to the people like water
supply, sanitation, nutrition, etc.

SPECIAL PROGRAMMES TO FIGHT POVERTY

AND UNEMPLOYMENT.
1) To create wage or self employment for the poor.
It calls for policies that eradicate poverty through employment
generation.
These programmes were:
(a) Integrated Rural Development Programme ( IRDP ): The target group
consists largely of small and marginal farmers, agricultural labourers
and rural artisans living below the Poverty line. Its sub scheme are
Training Rural Youth For Self Employment (TRYSEM) and
Development of Women and Children In Rural Areas ( DWCRA).

(b) Jawahar Rozgar Yojna (JYR) : JRY was formed in 1st April 1989
by amalgamating two wage employment programs viz., National
Rural Employment Program (NREP) and Rural Employee
Guarantee Program (RLEGP).
(c) Employment Assurance Scheme: Employment Assurance Scheme
was launched on 2nd October, 1993 for backward blocks of
different States. The block selected were in the drought prone
areas, desert areas, tribal areas and hilly areas.
(d) Nehru Rozgar Yojna (NRY) : The Nehru Rozgar Yojana has been
designed to provide employment to the urban unemployed and
under-employed poor.
(e) Prime Minister Rozgar Yojna: This scheme has been launched by
the Govt. of India in 1993 to provide self employment
opportunities to the unemployed youth and women.

(f) Jawahar Gram Samridhi Yojna: this scheme was a scheme

launched by the government of India to attain the objective of
providing gainful employment for the rural poor. The
programme is implemented by the District Panchayats,
Intermediate Panchayats and Gram Panchayats.
(g) Swarnajayanti Gram Swarozgar Yojna ( SGSY) : Swarnajayanti
Gram Swarojgar Yojana (SGSY) is an initiative launched by
the Government of India to provide sustainable income to poor
people living in rural areas of the country. The scheme was
launched on April 1, 1999.The SGSY aims at providing selfEmploymant to villagers through the establishment of Self-helpgroups. Funds are provided by NGOs, banks and financial
institutions.

(h) Sampoorna Grameen Rozgar Yojna: this was a scheme launched

by the government of India to attain the objective of providing
gainful employment for the rural poor. was launched on 25
September 2001 by merging the provisions of Employment
Assurance Scheme (EAS) and Jawahar Samridhi Yojana (JGSY).
(i) Swarnajayanti Shahri Rozgar Yojna: Swarna Jayanti Shahari
Rozgar Yojna (SJSRY) in India is a Centerally Sponsored
Scheme which came into effect on 1 December 1997. The scheme
strives to provide gainful employment to the urban unemployed
and underemployed poor, through encouraging the setting up of
self-employment ventures by the urban poor living below the
poverty line.

(j) National Food for Work Programme (NFPW): this was launched
on 14 November 2004 in 150 of the most backward districts
of India with the objective of generating supplementary wage
employment. The programme is open to all rural poor who are
prepared to do manual, unskilled poor.
(k) Mahatma Gandhi National Rural Employment Guarantee Act
( MGNREGA) : MGNREGA is an India Labor Law and Social
security measure that aims to guarantee the right to work' and
ensure livelihood security in rural areas by providing at least
100 days of guaranteed wage employment in a financial year to
every household.

2. To provide Basic Social Services to the poor and have well Targeted
Transfers and Safety Nets.
(a) Pradhan Mantri Gramodya Yojna which include PMGSY, Grameen
Awaas and rural drinking water projects.
(b) Indira Awaas Yojna (IAY) : IAY is a social welfare programme,
created by the Indian Government, to provide housing for the rural
poor in India.
(c) Annapurna: this was launched on 1 st April, 2000. It aims at providing
food security to meet the requirements of those senior citizens who
have remained uncovered under the National Old Age Pension
Scheme.
(d) Shiksha Sahayog Yojna: The scheme was launched on 31 December
2001, with the object to lessen the burden of parents in meeting the
educational expenses of their children. It provides scholarships to
students of parents living below or marginally above poverty line.

(e) Krishi Shramik Surksha Yojna: provides life insurance protection,

periodical lump sum survival benefit and pension to those who were
between the age of 18-50 years.

FLAWS IN ANTI-POVERTY PROGRAMMES

Inadequate financial limits. Financial limits of investment in different

schemes are fixed without reference to actual.
Lack of interest: Schemes are administered by over burdened
development officers who were unable to fulfill the scheme.
Lack of accountability: accountability for proper use funds remains a
serious problem.

CONCLUSION
The positive results of eradication measures have been:
Increase in per capita income.
Fall in percentage of absolute poor in some states.
Rise in wages.
Rise in nutritional level of the food of the poor.
There is an immense scope for improving the efficiency of poverty
alleviation programmes. According to the planners of 12th five
year plan, this can be done by :
Achieving higher level of human capital.
Creating coordination.
Better designing
Avoiding duplication and overlapping of programmes.

Presented
by:
Sarthi Saini
Geetika Duneja
Himanshi
Aggarwal
Anjali Pandey