Poverty is the deprivation of food, shelter, money and clothing that occurs when people cannot satisfy their basic needs. Poverty can be understood simply as a lack of money, or more broadly in terms of barriers to everyday life. It refers to a situation where a person is unable meet the basic necessities of life. Absolute poverty or destitution refers to the state of severe deprivation of basic human needs, which commonly includes food, water, sanitation, clothing, shelter, health care, education and information. The amount of income a person or family needs to purchase an absolute amount of the basic necessities of life. These basic necessities are identified in terms of calories of food, BTUs of energy, square feet of living space, etc.
The problem with the absolute poverty level is that there really are no absolutes when in comes to consuming goods. Relative poverty views poverty as socially defined and dependent on social context, hence relative poverty is a measure of income inequality. Usually, relative poverty is measured as the percentage of population with income less than some fixed proportion of median income. There are several other different income inequality metrics, for example the Gini coefficient or the Theil Index. Relative poverty measures are used as official poverty rates in several developed countries. As such these poverty statistics measure inequality rather than material deprivation or hardship. The measurements are usually based on a person’s yearly income and frequently take no account of total wealth.
United Nations: Fundamentally, poverty is a denial of choices and opportunities, a violation of human dignity. It means lack of basic capacity to participate effectively in society. It means not having enough to food and clothing a family, not having a school or clinic to go to, not having the land on which to grow one’s food or a job to earn one’s living, not having access to credit. It means insecurity, powerlessness and exclusion of individuals, households and communities. It means susceptibility to violence, and it often implies living in marginal or fragile environments, without access to clean water or sanitation. World Bank: Poverty is pronounced deprivation in well-being, and comprises many dimensions. It includes low incomes and the inability to acquire the basic goods and services necessary for survival with dignity.
Poverty also encompasses low levels of health and education, poor access to clean water and sanitation, inadequate physical security, lack of voice, and insufficient capacity and opportunity to better one’s life. Copenhagen Declaration: Absolute poverty is a condition characterized by severe deprivation of basic human needs, including food, safe drinking water, sanitation facilities, health, shelter, education and information. It depends not only on income but also on access to social services. The term ‘absolute poverty’ is sometimes synonymously referred to as ‘extreme poverty.’ World Health Organisation: Poverty is associated with the undermining of a range of key human attributes, including health. The poor are exposed to greater personal and environmental health risks, are less well nourished, have less information and are less able to access health care; they thus have a higher risk of illness and disability.
Conversely, illness can reduce household savings, lower learning ability, reduce productivity, and lead to a diminished quality of life, thereby perpetuating or even increasing poverty. Poverty line is the minimum level of income deemed adequate in a given country. In practice, like the definition of poverty, the official or common understanding of the poverty line is significantly higher in developed countries than in developing countries. The common international poverty line has in the past been roughly $1 a day. In 2008, the World Bank came out with a revised figure of $1.25 at 2005 purchasing-power parity (PPP). Determining the poverty line is usually done by finding the total cost of all the essential resources that an average human adult consumes in one year.
Individual factors are often used to account for various circumstances, such as whether one is a parent, elderly, a child, married, etc. The poverty threshold may be adjusted annually. Below Poverty Line is an economic benchmark and poverty threshold used by the government of India to indicate economic disadvantage and to identify individuals and households in need of government assistance and aid. It is determined using various parameters which vary from state to state and within states. The present criteria are based on a survey conducted in 2002. Going into a survey due for a decade, India’s central government is undecided on criteria to identify families below poverty line.
Poverty in India
The problem of poverty and unemployment is considered as the biggest challenge to development planning in India. High poverty levels are synonymous with poor quality of life, deprivation, malnutrition, illiteracy and low human resource development. The slogan of poverty eradication has been adopted by all political parties in one form or another and there is a national agreement for the goal of poverty alleviation. The national consensus on poverty alleviation provided the necessary condition for launching various schemes and programmes aimed at achieving this objective. But the persistence of poverty during all these years suggests that the national consensus on objectives did not and could not provide sufficient conditions for poverty alleviation. The starting point for estimating the number of households below the poverty line is a nutritional requirement per person per day at some base point.
There is a debate on the minimum calorie requirement, and whether it should be the same for all parts of the country. Most acceptable figures are 2,400 calories per person per day in rural areas, and 2,200 calories per person per day in urban areas. The next step is to translate the nutrient requirement into monetary terms. The expenditure level of households which are able to spend the requisite amount to obtain the desired calories serves as the cut-off point, or the poverty line. To adjust the poverty line over a period of time, price variations have to be considered and an appropriate price deflator has to be selected. The problem arises in deciding upon such a deflator. Thus, the following elements mainly affect the magnitude of the poverty ratio: (i) the nutrition norm (translated into monetary terms);
(ii) price deflator used to update the poverty line; and
(iii) pro rata adjustment in the number of households in different expenditure classes to determine the number of households below and above the poverty line. Different assumptions and methods are used for these three purposes, which accounts for the different estimates provided by scholars. The Planning Commission has been estimating the incidence of poverty at the national and state level using the methodology contained in the report of the Expert Group on Estimation of Proportion and Number of Poor (Lakdawala Committee) and applying it to consumption expenditure data from the large sample surveys on consumer expenditure conducted by the NSSO (National Sample Survey Organisation) at an interval of approximately five years.
Estimates of Poverty (Per cent)
Year All India Rural Urban All India Poverty Ratio Rural Poverty Ratio Urban Poverty Ratio Number (per cent) Number (per cent) Number (per cent) (Million) (Million) (Million) 1973-74 321 54.9 261 56.4 60 49.0 1977-78 329 51.3 264 53.1 65 45.2 1983 323 44.5 252 45.7 71 40.8 1987-88 307 38.9 232 39.1 75 38.2 1993-94 320 36.0 244 37.3 76 32.4 1999-2000 260 26.1 193 27.1 67 23.6 2004-05 239 21.8 170 21.8 68 21.7
Problems caused due to poverty
Human poverty measures suggest even worse outcomes than for income poverty in India. India has never been a good performer in human development terms, despite the much better indicators in some states, particularly Kerala. Overall, both health and education indicators have lagged well below those in other countries at similar levels of development and with similar per capita income. But food poverty has been of particular concern. Recent studies have shown alarming levels of hunger, especially in certain states of India. Studies by IFPRI and ISHI quoted in Banerjee (2008) suggest that most states in India rank somewhere among the poor Sub-Saharan countries: Punjab, Kerala, Andhra Pradesh and Assam have a „serious‟ level of hunger; Madhya Pradesh fares worst in the „extremely alarming‟ cohort of hunger. All the other states record an „alarming‟ level of hunger, which is also the general ranking for the whole country.
More appallingly, the situation appears to have worsened in the recent period of rapid economic growth. National Sample Surveys shows declining per capita calorie consumption, not only among the entire population, but also among the bottom quartiles, for which consumption was already very inadequate by international standards. Other indicators of both nutrition and health are also extreme. The latest National Family Health Survey for 2005–06 shows that the proportion of underweight children below the age of five years was 45.6 per cent in rural India and 32.7 per cent in urban India, indicating hardly any change from the previous survey undertaken eight years previously. More than one-third of the rural population was also underweight. Anaemia often a good indicator of nutritional deprivation was also widespread: 79.2 per cent of children aged 12–23 months and 56.2 per cent of ever-married women between 15 and 59 years were found to be anaemic.
Poverty Alleviation Programmes
The poverty alleviation programme have been broadly classified into self-employment programmes, wage employment programmes, food safety programme and social security programmes. The focus is on the central government schemes only. It is not possible to map the special programmes of all the states. It must be noted here that some of the progressive states have added additional components or given further subsidy to enhance the benefits of the central schemes. For example, in the highly subsidized public distribution system of Andhra Pradesh, the BPL card holders were provided rice at Rs. 2 per kg. Self-employment programmes: This programme was started in 1970s in rural areas of the country in the name of Integrated Rural Development Programme (IRDP) to increase the source of income of small farmers and landless labourers.
The beneficiaries were given subsidized credit, training, and infrastructure, so that they could find new sources of earning. In this scheme, agricultural labourers and small farmers received new skills to involve in vocations other than cultivating land. They included fishery, animal husbandry, and forestry. In the 1980s, this scheme was extended to schedule castes and tribes, women and rural artisans. Wage employment programmes: The main purpose of the wage employment programmes is to provide a livelihood during the lean agricultural season as well as during drought and floods. Under these programmes, villagers worked to improve the village infrastructure such as deepening the village ponds, constructing village schools and improving the rural roads. Thus the programmes not only provided employment to the villagers but also improved village infrastructure and created village public assets.
A positive fall out of this programme is that it created higher demand for village labour, thereby pushing up the wage of the labourer in the villages. Food security programmes: Meeting the very basic need of access to food is a major challenge to the government in the post-economic reform era. Those who are below poverty line are faced with the problem of meeting this very basic need. Starvation and hunger have been reported in different parts of the country, even in economically advanced states like Maharashtra. There is malnutrition in all age groups, especially among children. Problem of low birth weight due to under nutrition of mother during pregnancy and underweight of children are rampant in the country.
The purchasing power of certain section of the society is so low that they cannot access food at the market price. They need the safety net of food subsidy. In this context, public distribution system or PDS assumes importance. Social security programmes: Social security programmes are meant for those who are at the bottom of the BPL facing destitution and desertion. The central government has launched the National Social Assistance Programme or NSAP in August 1995. Under NSAP, there are three schemes.
The first one is the National Old Age Pension Scheme or NOAPS. A pension amount of Rs. 75 per month is given to those who are above the age of 65 years and are destitute without any regular source of income or support from any family members or relatives. Though it is a very useful scheme for the elderly destitute, the coverage of the programme was not satisfactory. In the year 1999-2000, 8.71 million eligible elderly were identified, but the scheme could reach out to only 5 million beneficiaries. It was found that the benefits really reached the poor and the leakage rate was found to be low.