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BPSC Mains GS-2 Masterclass · Indian Economy

Poverty as DeprivationMore Than a Lack of Money

Poverty is hunger, illness without a doctor, a child out of school, a job that never comes, and a voice that is never heard. This page explains what poverty means beyond income, how its incidence is measured, how India has tried to reduce it, and what more can be done.

Scale1/5th+Of world's poor

live in India.

ThresholdRs 816 / 1,000Poverty line

per month, rural / urban (Tendulkar).

Strategy3Approaches

growth, targeted programmes, basic amenities.

Rural3/4th+Poor in villages

so rural jobs are the priority.

Jobs100 daysMGNREGA work

guaranteed per rural household a year.

InclusionRs 1 lakhJan-Dhan cover

accident insurance per account holder.

Part 1 · Definitions

What Poverty Means

Poverty is a complex, multidimensional phenomenon: low income, but also low health, education, voice and security.

A village scene with a woman carrying water from a distant hand pump past a closed school and a small clinic

Definition of poverty

Poverty is a complex phenomenon and the notion of poverty has different meaning for different people.

Though there is no universally accepted definition of poverty, it is generally viewed as a state or condition in which a person or community lacks the financial resources and essentials for a minimum standard of living. Poverty means that the income level from employment is so low that basic human needs (e.g. food, cloth and house) can't be met.

A world problem

According to the 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 is not only a challenge for India, as more than one-fifth of the world's poor live in India alone; but also for the world, where about 300 million people are not able to meet their basic needs.

How institutions define poverty

The World Bank conceptualises poverty as deprivation in well-being, low income 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.
In ADB's view, poverty is a deprivation of essential assets and opportunities to which every human is entitled.
UNDP measures poverty in terms of a new parameter, namely, Multidimensional Poverty Index (MPI) which considers average value of living standard, health and education.
It is a socio-economic problem that goes beyond the boundaries of economic arena and covers other aspects such as the inability to participate in social and political life (United Nations Report, 2010).
Poverty is multidimensional in nature. Apart from the income approach to poverty, there are other ways to conceptualise poverty, i.e., deprivation in other areas such as literacy, schooling, life expectancy, child mortality, malnutrition, safe water and sanitation.
Poverty exists in all countries and in all societies and has various aspects viz., lack of income, productive resources, hunger and malnutrition, illiteracy, homelessness and inadequate housing, unsafe environment, social discrimination and exclusion. The meaning of poverty has changed over time and varies not only from society to society but it also varies within the same society at different points of time.

Types of poverty

Human poverty

It is the lack of essential human capabilities — literacy and nutrition.

Income poverty

It is lack of sufficient income to meet minimum consumption needs.

Extreme poverty

The World Bank defines extreme poverty as living on less than $1.90 a day.

Absolute poverty

It measures poverty in relation to the amount of money necessary to meet basic needs such as food, clothing, and shelter. The population whose level of income/expenditure is below this minimum necessary benchmark is considered to be below the poverty line. The concept of absolute poverty is not concerned with broader quality of life issues or with the overall level of inequality in society. The concept, therefore, fails to recognise that individuals have important social and cultural needs too.

Relative poverty

It is the condition in which people lack the minimum amount of income needed in order to maintain the average standard of living in the society in which they live. It differs between countries and over time.

Example: A family in a Bihar village that cannot afford two meals a day is in absolute poverty. A family in a Delhi colony that eats well but cannot afford a smartphone or a school trip that all its neighbours' children take is in relative poverty.

Part 4 · India's approach to poverty reduction

India's Three Approaches to Poverty

The Constitution and Five-Year Plans state social justice as the primary objective. Post independence, the government's approach to poverty reduction has had three dimensions.

The policy commitment

The Indian Constitution and five year plans state social justice as the primary objective of the developmental strategies of the government.
All policy documents emphasise on poverty alleviation and that various strategies need to be adopted by the government for the same.

The first one is growth-oriented approach. It is based on the expectation that the effects of economic growth — rapid increase in gross domestic product and per capita income — would spread to all sections of society and will trickle down to the poor sections also.
- This was the major focus of planning in the 1950s and early 1960s. It was felt that rapid industrial development and transformation of agriculture through green revolution in select regions would benefit the underdeveloped regions and the more backward sections of the community.
Example: 'Trickle down' is like pouring water on the top of a pyramid of glasses and expecting the bottom glasses to fill; often they fill last, or not at all.

Social security for specific groups

The government also has a variety of other social security programmes to help a few specific groups. e.g.

National Social Assistance Programme:
- elderly people who do not have anyone to take care of them are given pension to sustain themselves.
- Poor women who are destitute and widows are also covered under this scheme.
From 2014, a scheme called Pradhan Mantri Jan-Dhan Yojana is available in which people in India are encouraged to open bank accounts. Besides promoting savings habit, this scheme intends to transfer all the benefits of government schemes and subsidies to account holders directly.
- Each bank account holder is also entitled to Rs. 1 lakh accident insurance and Rs. 30,000 life insurance cover.
Ayushman Bharat Pradhan Mantri Jan Arogya Yojana is a scheme of the Government of India to provide free access to healthcare for 40% of people in the country.

Part 5 · Programmes and measures to reduce poverty

Programmes Today, and What More Is Needed

Key schemes in place, further measures to reduce poverty, and an honest assessment of the record.

Various poverty alleviation programmes

Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA): It aims at enhancing livelihood security of households in rural areas by providing at least 100 days of guaranteed wage employment in a financial year to every household whose adult members volunteer to do unskilled manual work with the stipulation of one-third participation of women.
Deen Dayal Antyodaya Yojana or DAY → a Government of India scheme for helping the poor by providing skill training. It includes both Deendayal Antyodaya Yojana – National Rural Livelihoods Mission (DAY-NRLM) and Deendayal Antyodaya Yojana – National Urban Livelihoods Mission (DAY-NULM).
PDS; MSP; Stand up and Start up India; Prime Minister's Employment Generation Programme; Pradhan Mantri Ujjwala Yojana.
(In the answer, write various schemes related to Health, Farmers, Migrants, etc.)

Further measures to reduce poverty

More than three-fourth of the poor in India still reside in villages ⇒ need is to generate more employment in rural areas.
Check on corruption and efficient utilization of funds. Adequate training of officials and make them sensitive towards the people's needs.
Utilizing capacities of NGOs and civil societies to supplement the initiatives of the government.
Checking Population growth.
Address the social exclusion based on caste, gender etc.
Increasing farms productivity and strengthen the marketability of the farm produce.

Conclusion on deprivation

It also reveals that high growth alone is not sufficient to reduce poverty. Without the active participation of the poor, successful implementation of any programme is not possible.

Poverty can effectively be eradicated only when the poor start contributing to growth by their active involvement in the growth process. This is possible through a process of social mobilisation, encouraging poor people to participate and get them empowered. Moreover, it is necessary to identify poverty stricken areas and provide infrastructure such as schools, roads, power, telecom, IT services, training institutions etc.

Conclusion on the programmes

We have travelled more than seven decades since independence. The objective of all our policies had been stated as promoting rapid and balanced economic development with equality and social justice. Poverty alleviation has always been accepted as one of India's main challenges by the policy makers, regardless of which government was in power. The absolute number of poor in the country has gone down and some states have less proportion of poor than the national average. Yet, critics point out that even though vast resources have been allocated and spent, we are still far from reaching the goal.

There is improvement in terms of per capita income and average standard of living; some progress towards meeting the basic needs has been made. But when compared to the progress made by many other countries, our performance has not been impressive.

Moreover, the fruits of development have not reached all sections of the population. Some sections of people, some sectors of the economy, some regions of the country can compete even with developed countries in terms of social and economic development, yet, there are many others who have not been able to come out of the vicious circle of poverty.

“Poverty can effectively be eradicated only when the poor start contributing to growth by their active involvement in the growth process.”

— BPSC Mains answer, 2007

Curated for BPSC, UPSC & State PCS Civil Services Aspirants | Indian Economy Master Module

Explore More Beyond the Book Modules

Poverty as DeprivationMore Than a Lack of Money

What Poverty Means

How institutions define poverty

Types of poverty

Poverty Is Deprivation

Poverty is a matter of deprivation from basic needs

The Incidence of Poverty

The incidence of poverty

Identify and measure first

India's Three Approaches to Poverty

The policy commitment

Social security for specific groups

Programmes Today, and What More Is Needed

Various poverty alleviation programmes

Further measures to reduce poverty

BPSC Mains Previous Year Questions

What do you mean by the concept of poverty? Explain the incidence of poverty and the various poverty alleviation programmes introduced in India.

"Poverty is a matter of deprivation from basic needs of human life." Explain it and suggest measures to reduce it.