General Studies: Indian Economy topic Poverty in India for Competitive Exams

Poverty in India

Poverty is a social phenomenon where in section of society is unable to fulfil even its basic necessities of life. Planning Commission is the authority, which publishes the poverty estimates based on various rounds of National Sample Survey Organisation (NSSO) on monthly per capital consumption expenditure. In India, the poverty line is defined on the basis of calorie intake. According to this, 2100 calories a day has been fixed for urban areas and 2400 calories in rural areas.

Alternatively, in monthly per capita consumption expenditure terms, the poverty line is fixed at Rs. 454.0 for rural areas and Rs. 540.0 for urban areas. Based on the definition poverty line given above the percentage of people below poverty line (or poverty ratio) is provided in the table.

Since, NSSO 55th Round(1999) Planning Commission gives two poverty estimates based on Mixed Recall Period (MRP) and Universal Recall Period (URP). Mixed Recall Period, gives consumer expenditure data for five non-food items, goods, education and institutional medical expenses for 365 days and consumption data for remaining items are collected for 30 days period. Universal Recall Period, consumption data for all items  are collected for a 30 days recall period.

Causes for Rural Poverty:

• ( i ) Rapid Population growth
• ( ii ) Lack of capital
• ( iii ) Lack of alternate employment opportunities other than aggriculture
• ( iv ) Excessive population pressure on agriculture
• ( v ) Illiteracy
• ( vi ) Regional disparities
• ( vii ) Joint family system
• ( viii ) Child marriage
• ( ix ) Lack of proper implementation of PDS (Public Distribution System)

Causes for Urban Poverty:

• ( i )  Migration from rural areas
• ( ii ) Lack of skilled labour
• ( iii ) Lack of housing facilities
• ( iv ) Limited job opportunities in cities
• ( v ) Lack of vocational education or training

Estimation of Poverty by Finance Commission:

The Seventh Finance Commission attempt to inclusive concept of poverty line. Since the NSS data cover only household Consumer expenditure. thus, to get a more inclusive measure of welfare or deprivation, an estimate of the benefit of public expenditure was added to Private Consumer Expenditure norm for calculating the augmented poverty line.