poverty and unemployment in india essay

Poverty in India Essay for Students and Children

500+ words essay on poverty in india.

Poverty refers to a situation in which a person remain underprivileged from the basic necessities of life. In addition, the person does not have an inadequate supply of food, shelter, and clothes. In India, most of the people who are suffering from poverty cannot afford to pay for a single meal a day. Also, they sleep on the roadside; wear dirty old clothes. In addition, they do not get proper healthy and nutritious food, neither medicine nor any other necessary thing.

Causes of Poverty

The rate of poverty in India is increasing because of the increase in the urban population. The rural people are migrating to cities to find better employment. Most of these people find an underpaid job or an activity that pays only for their food. Most importantly, around crores of urban people are below the poverty line and many of the people are on the borderline of poverty.

Besides, a huge number of people live in low-lying areas or slums. These people are mostly illiterate and in spite of efforts their condition remains the same and there is no satisfactory result.

Furthermore, there are many reasons that we can say are the major cause of poverty in India. These causes include corruption, growing population, poor agriculture , the wide gap of rich and poor, old customs, illiteracy, unemployment and few more. A large section of people are engaged in an agricultural activity but the activity pays very less in comparison to the work done by employees.

Also, more population needs more food, houses and money and in the lack of these facilities the poverty grows very quickly. In addition, being extra poor and extra rich also widens the gap between the rich and poor.

Moreover, the rich are growing richer and the poor are getting poorer creating an economic gap that is difficult to fill up.

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Effects of Poverty

It affects people living in a lot of ways. Also, it has various effects that include illiteracy, reduced nutrition and diet, poor housing, child labor, unemployment , poor hygiene and lifestyle, and feminization of poverty, etc. Besides, this poor people cannot afford a healthy and balanced diet, nice clothes, proper education , a stable and clean house, etc. because all these facilities require money and they don’t even have money to feed two meals a day then how can they afford to pay for these facilities.

The Solutions for Ending Poverty

For solving the problem of poverty it is necessary for us to act quickly and correctly. Some of the ways of solving these problems are to provide proper facilities to farmers . So, that they can make agriculture profitable and do not migrate to cities in search of employment.

Also, illiterate people should be given the required training so that they can live a better life. To check the rising population, family planning should be followed. Besides, measures should be taken to end corruption, so that we can deal with the gap between rich and poor.

In conclusion, poverty is not the problem of a person but of the whole nation. Also, it should be deal with on an urgent basis by the implementation of effective measures. In addition, eradication of poverty has become necessary for the sustainable and inclusive growth of people, society, country, and economy .

FAQs about Poverty in India Essay

Q.1 List some ways to end poverty in India. A.1 Some ways to end poverty in India are:

• Develop a national poverty reduction plan
• Equal access to healthcare and education
• Sanitation facility
• Food, water, shelter, and clothing facility
• Enhance economic growth with targeted action

Q.2 Which is the poorest state in India? A.2 Chhattisgarh is the poorest state of the country.

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UPSC NCERT Notes – Indian Economy – Poverty and Unemployment

UPSC NCERT Notes on Indian Economy focusing on Poverty and Unemployment serve as indispensable tools for aspirants aiming to crack the Civil Services Examination. In the vast canvas of economic studies, poverty and unemployment emerge as critical dimensions requiring thorough understanding and analysis. These notes meticulously curated from NCERT textbooks provide a comprehensive overview of the multifaceted issues plaguing India’s socio-economic landscape. From elucidating the nuanced causes and repercussions of poverty to delving into the intricate dynamics of unemployment, these notes offer invaluable insights. They navigate through statistical data, theoretical frameworks, and policy interventions, equipping aspirants with the necessary analytical tools to comprehend, critique, and propose solutions to these pressing challenges. In essence, UPSC NCERT Notes on Indian Economy, particularly focusing on poverty and unemployment, act as guiding beacons, steering aspirants towards a deeper understanding of socio-economic realities crucial for excelling in the Civil Services Examination.

Table of Contents

• Poverty is a social phenomenon where a segment of society is unable to meet even its basic life necessities. The UN Human Rights Council characterizes poverty as a human condition marked by sustained or chronic deprivation of resources, capabilities, choices, security, and power necessary for enjoying an adequate standard of living and other essential rights.
• There is no official data post-2011 to determine the country’s poor population, but the United Nations estimated in 2019 that it was 364 million (36.4 crores), constituting 28% of India’s population. Poverty, as defined by the World Bank (living on less than $1.90 a day), was reported by the Indian Government in 2019 to affect 6.7% of its population.
• According to Oxfam, the top 1% of India’s population holds 73% of the wealth, while 670 million citizens, comprising the country’s poorest half, witnessed only a 1% increase in their wealth. A recent report on rising inequality reveals that in 2020, approximately 4.6 crores Indians fell into extreme poverty, accounting for nearly half of the global new poor, as per the United Nations. Interestingly, the number of Indian billionaires grew from 102 to 143 during the pandemic period.
• India’s 100 wealthiest individuals reached a record high net worth of ₹57.3 lakh crore ($775 billion) in 2021, according to Oxfam India’s statement. This information is part of the Inequality Kills Report Thorros India Supplement, scheduled to be presented at the World Economic Forum’s virtual event, The Davos Agenda, on January 17, 2022.

Poverty comes in two forms:

Absolute poverty:.

• This occurs when people’s consumption or income falls below the minimum level required to meet basic needs according to national standards, expressed as a poverty line.
• Various definitions exist, with many countries using criteria such as calorie intake. For example, the Planning Commission in India suggested a daily intake of 2400 kilocalories in rural areas and 2100 kilocalories in urban areas.
• Another criterion is the Minimum Consumption Expenditure Criteria, which defines individuals living below the poverty line as those with per capita consumption expenditure below a specified threshold.

Relative Poverty:

• This type of poverty is determined by comparing the per capita income of different countries. A nation with significantly lower per capita income compared to others is considered relatively poor.
• In poor nations, the portion of the population with lower incomes faces challenges meeting basic needs.
• The World Bank uses multiple poverty lines, including $1.90 per day, $3.20, and $5.50, reflecting different income levels in lower-middle and upper-middle-income countries. Measurement methods include the Gini coefficient and Lorenz Curve.

Lorenz Curve

• The Lorenz Curve, developed by Max O Lorenz in 1905, illustrates income disparity between countries. The Gini coefficient, created by Corrado Gini, is a statistical measure of income or wealth inequality. A Gini coefficient of zero indicates perfect equality, while a value of one represents maximal inequality. This coefficient is often calculated based on the Lorenz curve, plotting the cumulative income proportion against the cumulative population percentage.

Gini Co-efficient

• The Gini coefficient (also known as the Gini is a measure of statistical indexion Gini rated by the Italian statistician and sociologist Corrado Gini, it measures the ans inequality among values of a frequency drumoni distribution (e.g., levels of income).
• The Gini coefficient is commonly used as a measure of inequality of income or wealth. A Gini coefficient of zero expresses perfect equality, where all values are the same (e.g., where herbs everyone has an exactly equal income).
• A Gini coefficient of one (100 on the percentile scale) expresses maximal inequality among values (e.g., where only one person has all the income).
• The Gini coefficient is usually defined mathematically based on the Lorenz curve, which plots the proportion of the total income of the population (y-axis) that is cumulatively earned by
• The Gini coefficient, measuring perfect income equality at 0 degrees, reflects the income gap within a society. Inequality, often denoting the disparity between the wealthy and the impoverished, increases with a widening gap. This disparity manifests in the distribution of economic assets and income among individuals and groups, influenced by economic systems, access to resources, education, social factors like caste and gender, and more.

Inequality in India

• In India, both overall GDP and per capita GDP have surged during the economic reform period. While the percentage of the population living in poverty has decreased, inequality has risen. The Inequality Virus Report 2021 by Oxfam highlights a 35% increase in the wealth of Indian billionaires during the lockdown, accentuating the wealth gap. The Gini coefficient of wealth in India in 2017 was 10.83, positioning India among the most unequal countries. The top 10% of the population holds 77% of the total national wealth, and the number of billionaires has increased significantly.

Adverse Impacts of Inequality

• The trickle-down theory, advocating for flourishing businesses benefiting lower-income individuals, has been critiqued. In India, the Consumer Price Index for Agricultural Labour (CPIAL) and Consumer Price Index for Industrial Workers (CPIIW) are used for poverty measurement.
• Growing inequalities can impede growth, create social unrest, and lead to the concentration of wealth in the hands of a few. Urban-centric growth in India, marked by migration and uneven investment, has sparked social friction. In such societies, there is a risk of policy capture by the wealthy, potentially undermining institutional foundations.

Poverty in India

• Regarding poverty in India, estimates suggest significant progress, with millions lifted out of poverty between 2005-06 and 2019-20. However, poverty lines vary across states due to differing price levels. Poverty estimation is conducted by NITI Aayog’s task force using data from the National Sample Survey Office. 
• The poverty line signifies the purchasing power needed to meet minimum needs and categorizes people into semicolon chronic poor, transient poor, and non-poor based on their poverty status.
• Individuals who lack sufficient purchasing power fall into two groups: those Above the Poverty Line (APL) and those Below the Poverty Line (BPL). The former, deemed not poor, possess a level of purchasing power considered adequate. Conversely, the latter, labeled as poor, lack the necessary purchasing power.
• The Asian Development Bank has established a new poverty line based on a daily expenditure of US $1.35. According to the Tendulkar Committee Report, which offers state-wise poverty estimates, Odisha, with 57.2% of BPL individuals, ranks as the poorest state, followed by Bihar, Madhya Pradesh, and Chhattisgarh.

Measures of Poverty:

Head count ratio or poverty ratio:.

• Calculated by dividing the number of people below the poverty line by the total population.
• Indicates the proportion of poor individuals in the total population.
• Poverty Gap Index (PGI): Represents the difference between the poverty line and the average income of all households living Below Poverty Line (BPL), expressed as a percentage of the poverty line.
• Provides insights into the depth and severity of poverty.
• Squared Poverty Gap Index: Represents the mean of the squared individual poverty gaps relative to the poverty line.
• Reflects the severity of poverty and inequality among the poor.
• Sen Index of Poverty: Developed by Professor Amartya Sen, it incorporates the head count ratio, poverty gap index, and Gini coefficient.
• Captures the extent, severity, and inequality of poverty.

Multidimensional Poverty Index (MPI):

• Developed in 2010 by the Oxford Poverty and Human Development Initiative and the United Nations Development Programme.
• Considers factors beyond income, assessing poverty based on education outcomes and standard of living.
• Calculated as MPI = H x A, where H is the percentage of poor people, and A is the average intensity of MPI poverty across the poor.

Human Poverty Index (HPI):

• Originally used by UNDP to measure poverty, it transitioned to the Multidimensional Poverty Index (MPI) in 2010.
• Fisher Price Index (FPI): Updates the poverty line using actual consumption data, with a 60% weightage to food articles.

Conditional Cash Transfers (CCTs):

• A mechanism to combat poverty globally, involving government cash transfers to beneficiaries contingent on specific actions.
• Actions may include enrolling children in school, regular check-ups, institutional delivery, and vaccination.
• Aims to alleviate poverty by providing cash to needy households and fostering positive behavior through conditional requirements.

Several expert groups have played a crucial role in estimating poverty in India.

Here are some notable committees:

YK Alagh Committee (1979):

• Initially focused on traditional income-based poverty measurement.
• Shifted to a precise measure of poverty related to starvation, particularly in terms of calorie consumption.
• Introduced the criterion of people consuming less than 2100 kilo calories in urban areas or less than 2400 kilo calories in rural areas being considered poor.

Lakdawala Committee (1989):

• Constituted by the Planning Commission to address methodological and computational aspects of poverty estimation.
• Submitted its report in July 1993.
• Recommended calculating consumption expenditure based on caloric consumption.
• Advocated constructing state-specific poverty lines, updated using the Consumer Price Index (CPI) for industrial workers in urban areas and CPI for agricultural labor in rural areas.

Tendulkar Committee Report (2009):

• Headed by Mr. Suresh Tendulkar, the Prime Minister’s Economic Advisor.
• Tasked with reviewing the methodology for estimating poverty in India.
• Moved beyond the calorie criterion and adopted a broader definition of poverty, considering expenditures on health, education, and clothing.
• Revised the poverty line for 2004-05, raising it to ₹447 per capita per month in rural areas and ₹579 per capita per month in urban areas.
• Estimated 37.2% of the Indian population below the poverty line in 2004-05, contrasting with the official estimate of 27.5%.
• Updated data using the 66th Round NSS (2009-10) suggested a decline in the percentage of people below the poverty line from 37.2% in 2004-05 to 21.92% in 2011-12.

NC Saxena Committee (For BPL Families in Rural Areas):

• Formed to review the methodology for conducting BPL Census in rural areas.
• Led by Dr. NC Saxena, the committee aimed to recommend a suitable methodology for identifying BPL families in rural areas.
• These expert groups have contributed significantly to shaping methodologies for poverty estimation in India, addressing various dimensions beyond income and calorie consumption.

SR hashim Committee

• The expert group, which submitted its report in August 2009, proposed significant changes in the methodology for identifying families below the poverty line (BPL) in rural areas. They recommended abandoning the score-based ranking used in the BPL Census 2002. Instead, the committee proposed an automatic exclusion of privileged sections and an automatic inclusion of deprived and vulnerable sections, with the remaining population surveyed and ranked on a scale of 10. Following this methodology, the committee estimated that 50% of the total population was below the poverty line.
• Moving to urban areas, the SR Hashim Committee, tasked with identifying BPL families, suggested that households with three of the four items (refrigerator, motorized two-wheelers, landline telephone, or washing machines) should not be considered poor. The committee proposed a three-stage approach: automatic exclusion, automatic inclusion, and a scoring index to identify urban poor. Homeless families facing social and occupation deprivations were recommended for automatic inclusion in the BPL list. The definition of a poor family included members engaged in begging, rag picking, domestic work, sweeping, or sanitation work.

Rangaranjan Commitee

• The scoring index ranged from 1 to 12, with households scoring from 1 to 12 considered eligible for inclusion in the BPL list. The Rangarajan Committee, constituted by the Planning Commission in May 2012 to review the Tendulkar Committee methodology for estimating poverty, submitted its report on July 6, 2014. The committee contested the Tendulkar Committee’s findings, stating that the population living below the poverty line decreased from 38.2% in 2009-10 to 29.5% in 2011-12. The Rangarajan report revised the poverty line, increasing it to ₹972 per month (₹32 per day) for rural areas and ₹1407 per month (₹47 per day) for urban areas, in contrast to the Tendulkar Committee’s suggestions.

Here’s a summary of the different poverty lines proposed by each committee:

• These committees played crucial roles in reshaping the criteria and approaches for identifying poverty in both rural and urban contexts in India.
• Estimation of poverty is a critical aspect, and various international organizations have provided insights into India’s poverty scenario through different reports:

UN Report on Indian Poverty (Multi-dimensional Poverty Index – MPI)

• The United Nations’ analysis on the Multi-dimensional Poverty Index (MPI) in 2021 revealed that 5 out of 6 poor people in India belong to lower tribes or castes. The Scheduled Tribe group, constituting 9.4% of the population, is the poorest, with 65 million out of 129 million people living in multi-dimensional poverty.
• Scheduled Tribes, Scheduled Castes, and Other Backward Classes collectively contribute to significant portions of multi-dimensional poverty. Globally, the MPI covers 107 developing countries, identifying 1.3 billion multi-dimensionally poor people. India tops the list with 381 million, followed by Nigeria, Pakistan, Ethiopia, and the Democratic Republic of the Congo. Bihar has the highest segment of multi-dimensionally poor population (51.91%) among states, while Kerala has the smallest (0.71%).

Poverty by UNDP

• The United Nations Development Programme (UNDP) views poverty as a multi-dimensional challenge that goes beyond income, encompassing factors like health and nutrition. 
• The World Bank uses different parameters to measure poverty globally, including those earning less than $2.15 per day (considered extreme poverty) and higher poverty lines for Low-Middle Income Countries (LMIC) and Upper-Middle Income Countries (UMIC).
• Parameters like Lorenz Curve and Gini Coefficient are also utilized to observe poverty, with varying benchmarks set by organizations like the Asian Development Bank and the Indian Government.

World Bank Report

• The World Bank’s report by the end of 2022 indicates that global extreme poverty increased to an estimated 9.3% in 2020, with a notable increase in India. The national poverty headcount rate in India was 10% in 2019, with rural areas experiencing a 12% poverty rate and urban areas at 6%. The report emphasizes that between 1981-2010, developing countries observed a decline in poverty rate from 50% to 21%. A task force, chaired by Dr. Arvind Panagariya, submitted a report focusing on poverty measurement and combating strategies.

Task Force on Elimination of Poverty in India

• The Task Force, established in 2015, under Dr. Arvind Panagariya’s leadership, finalized its report in 2016. The report, titled “Eliminating Poverty : Creating Jobs and Strengthening Social Programs,” highlights the NITI Aayog’s Poverty Index (MDPI), estimating that a quarter of India’s population (322.5 million in 2016) was multidimensionally poor in 2015-16.

BPL Population

• While Dr. NC Saxena Committee was initially set up for advising on the BPL Census methodology, its report in 2009 recommended revising upwards the percentage of people entitled to BPL status to at least 50%, suggesting a rank-based system with automatic inclusion and exclusion of poor families.

The figures for the years 2004-05, 2009-10, and 2011-12 are based on the new poverty line.

Categories of Poverty in India

• Amartya Sen, a Nobel laureate and economist, has eloquently explained that poverty encompasses more than just a lack of income, although income is a crucial factor.
• While poverty is a relative concept, in cases of absolute poverty, it becomes essential to categorize individuals based on the poverty line.
• People experience poverty differently; some are consistently poor, some are occasionally poor, and some are never poor. Therefore, categorization is crucial for a nuanced understanding of poverty.

Categorization of Poverty Based on Severity

• Individuals facing poverty can be classified into three categories: chronic poor, transient poor, and non-poor.

Chronic Poor

• Always Poor: Individuals who consistently lack sufficient funds to meet their basic needs, remaining below the poverty line.
• Usually Poor: Individuals who occasionally have slightly more money but generally struggle to fulfill their basic needs, such as casual and landless workers.

Transient Poor

• Churning Poor: Individuals who frequently move in and out of poverty, including small farmers and seasonal workers.
• Occasionally Poor: Affluent Individuals most of the time but may experience periods of financial hardship, such as those who gamble.

Non-poor or Never Poor

• Non-poor individuals are those living above the poverty line, including professionals like doctors and lawyers. The poverty line serves as the cutoff point distinguishing between the poor and non-poor.

Measuring Poverty in India

• The common method to measure poverty is based on income or consumption levels, typically using an average calorie intake of 2400 calories for rural individuals and 2100 calories for urban individuals.
• In 2011-12, the poverty line was set at ₹816 per month for rural areas and ₹1000 for urban areas. The higher urban poverty line accounts for the relatively higher prices in urban centers compared to rural areas.
• Monthly Per Capita Expenditure (MPCE) is commonly used by the government to identify poor households, although critics argue that it lumps all the poor together without differentiating their specific needs.
• Head Count Ratio, a popular measure in India, indicates the proportion of the poor in the total population, providing insight into the extent of poverty within a country.
• To calculate the absolute number of poor and identify regions with high poverty rates, alternative methods are necessary.

A New Approach to Measuring Poverty

• Globally, the United Nations Development Programme (UNDP) establishes parameters for measuring poverty, while in India, the National Institution for Transforming India (NITI Aayog), formerly the Planning Commission, sets the parameters based on committee recommendations.
• Earlier, the UNDP used the Human Poverty Index (HPI) in its Human Development Reports, but by 2010, it transitioned to new parameters.
• The transition towards a new parameter, specifically the Multi-dimensional Poverty Index (MPI) in India, marked a shift in the approach to identifying individuals below the poverty line. The Planning Commission regularly formed expert committees to propose updated formulas for this purpose.

The National Policy for Skill Development and Entrepreneurship, established in 2015

• The National Policy for Skill Development and Entrepreneurship, established in 2015, signifies a departure from the pre-independence National Policy on Skill Development (NPSD) of 2009. This new policy, integrating entrepreneurship into the framework, envisions creating an empowerment ecosystem through widespread, rapid, and high-standard skilling. It aims to foster a culture of innovation-based entrepreneurship, generating wealth and employment for sustainable livelihoods.

Employment 

• On the employment front, it involves individuals pursuing gainful activity during a reference period, classified into self-employed workers, casual wage workers, and regular wage employees. Underemployment, a prevalent issue in developing countries alongside unemployment, assesses how effectively the labor force utilizes skills, experience, and job availability.
• Underemployment manifests in two forms: visible underemployment, where individuals work fewer than normal hours, and invisible underemployment, where individuals work full time but earn low incomes or engage in jobs that underutilize their abilities (e.g., an MA degree holder working as a driver).

Key indicators for estimating underemployment in India 

• Key indicators for estimating underemployment in India include the Labor Force Participation Rate (LFPR), Worker Population Ratio (WPR), and Proportion Unemployed (PU). Underemployment becomes apparent when individuals engaged in part-time work are willing to do more, or a person’s productivity and income increase after shifting to another occupation.

Unemployment

• Unemployment, the condition where individuals are willing and able to work at prevailing wage rates but lack opportunities, is closely tied to the concept of the labor force. Unemployment rate calculations consider the number of unemployed persons per 1000 individuals in the labor force, including both employed and unemployed.
• In India, unemployment is a significant social issue, with the government reporting 31 million jobless individuals in 2018. According to the Statistics Ministry, India’s unemployment rate rose to 6.1% in the 2017-18 fiscal year, reaching the highest level in at least 45 years, although these figures are subject to dispute.
• The adoption of digital manufacturing and machinery in factories and garment production is contributing to unemployment challenges in India. Unemployment stands out as a significant issue in the country.
• Similar to other underdeveloped nations, India grapples primarily with structural unemployment, manifested in both open and disguised forms. Additionally, Keynesian involuntary unemployment exists, presenting the opportunity for resolution through the augmentation of effective demand, mirroring practices in developed countries.

The causes of unemployment in India encompass:

• Rapid population growth.
• Fragmented landholding.
• Seasonal agriculture.
• Decline of manufacturing industries.
• Inadequate employment planning and execution.
• The impact of global economic slowdown.

Various types of unemployment include:

Voluntary unemployment:.

• Occurs when an individual is unwilling to work at the prevailing wage rate or does not have the desire to work. This type is not factored into the measurement of unemployment in an economy.

Involuntary Unemployment:

• Encompasses situations where a worker is willing and able to work but is unable to secure employment, also referred to as open unemployment.

Frictional Unemployment:

• Represents temporary unemployment associated with job changes, stemming from factors like labor immobility, raw material shortages, lack of knowledge about job opportunities, and machinery breakdowns.

Structural Unemployment:

• Tied to the structural pattern of the economy, arising from factors such as shortages in production factors like land and capital, lack of skills for new industries, and decreased availability of employment when industries close down or undergo technological changes.

Seasonal Unemployment:

• Arises are due to certain occupations requiring workers only during specific parts of the year, such as agriculture.

Technical Unemployment:

• Associated with technological changes, especially in capital-intensive modern industries, leading to the replacement of labor by machines.

Educated Unemployment:

• Pertains to unemployment among individuals with standard education levels.

Disguised Unemployment:

• Occurs when more people are employed for a job that could be performed equally efficiently by a smaller workforce.
• Features of disguised unemployment include zero marginal productivity of labor, difficulty in identifying unemployed individuals, a surplus of population, and its principal association with agricultural families.

 Measure unemployment in India

• To measure unemployment in India, the National Sample Survey Office (NSSO) has conducted quinquennial surveys since 1972-73. These surveys categorize individuals based on their activities during specified reference periods, such as usual principle status, current weekly status, and current daily status, following the recommendations of the Bhagwati Committee .
• Usual Principle and Subsidiary Status (UPSS) determine a person’s employment status based on their engagement for a substantial period (over 182 days) in one or more work-related activities during the 365 days preceding the survey.
• Current Weekly Status (CWS) classifies a person as employed if engaged for at least one hour on any single day in work-related activities during the reference period, offering insights into chronic unemployment.
• Current Daily Status (CDS), measured in man-days, designates a person as unemployed if they fail to secure work on a given day or some days throughout the survey week.

Key findings from the NSSO (68th Round) on employment and unemployment include:

• The Labor Force Participation Rate (LFPR) in usual status for rural and urban males stagnated, decreased by 1% for rural females, and increased by about 1% for urban females between NSSO 66th round (2009-10) and 68th round (2011-12).
• The Unemployment Rate (UR) in usual status stood at about 2% for both rural males and females, 3% for urban males, and 5% for urban females. Among the youth (age 15-29 years), UR was notably higher compared to the overall population.
• UR in usual status among educated youth (age 15-29 years with secondary and above education) was 8.1%, 15.5%, 11.7%, and 19.8% for rural males, rural females, urban males, and urban females, respectively.
• The annual report on the Periodic Labour Force Survey (PLFS) for 2020-2021 reports an all-India UR of 4.2%, with 3.3% in rural areas and 8.6% in urban areas.

The Periodic Labour Force Survey 

• The Periodic Labour Force Survey (PLFS) 2021, conducted annually by the National Statistical Office (NSO) since 2017, provides estimates of key employment and unemployment indicators like LFPR, Worker Population Ratio (WPR), and UR in the CWS for urban areas with a duration of three months.

Employment Related Programmes

• Considering the unprecedented demographic changes in India, the government has focused on enhancing basic education, achieving some success. However, vocational education and skill development remain critical areas of concern.
• The Skill Development Programme , approved by the Union Cabinet, aims to skill 500 million individuals by 2022. This plan involves a three-tier strategy implemented by the Prime Minister’s National Council on Skill Development, National Skill Development Coordination Board, and National Skill Development Corporation.

Skill Development

• The council is led by the Prime Minister, with members including the Ministers for Human Resource Development, Finance, Heavy Industries, Rural Development, Housing and Urban Poverty Alleviation, and Labour and Employment. The Deputy Chairman of the Planning Commission, the Chairperson of the National Manufacturing Competitiveness Council, the Chairperson of the National Skill Development Corporation, and six experts in skill development are also part of the council.
• The Prime Minister’s National Council on Skill Development has embraced a vision to skill 500 million individuals by 2022 through inclusive skill systems, considering factors like gender, rural or urban backgrounds, organized or unorganized sectors, and traditional or contemporary skill sets.

National Skill Development Co-ordination Board (NSDCB)

• The NSDCB operates under the chairmanship of the Deputy Chairman of the Planning Commission, with members including secretaries from the ministries of human resource development, labor and employment, rural development, housing and urban poverty alleviation, and finance.
• Secretaries from four states, rotating every two years, three distinguished academicians, subject area specialists, and the Secretary of the Planning Commission constitute the remaining members.
• Its primary objective is to implement decisions from the Prime Minister’s National Council on skill development, along with developing operational guidelines and instructions to meet the broader skill development needs of the country.

National Skill Development Corporation

• The third tier of coordinated action on skill development is NSDC, a non-profit company under the Companies Act with an appropriate governance structure.
• The Central Government has established a National Skill Development Fund with an initial corpus of ₹995.10 crore to support the corporation’s activities. The fund’s corpus is expected to increase to about ₹15,000 crore, with contributions from governments, public and private sectors, and bilateral and multilateral sources.

Atmanirbhar Bharat Rozgar Yojana

• Launched to stimulate employment in the formal sector and incentivize the creation of new job opportunities during the COVID recovery phase under Atmanirbhar Bharat Package 3.0.
• This scheme, operational for the period 2020-2023, was unveiled by Union Finance Minister Nirmala Sitharaman on November 12, 2020.
• Eligibility criteria include employees with a monthly wage of less than ₹15,000, not working in any EPFO-registered establishment before October 1, 2020, and lacking a Universal Account Number or EPF Member Account Number before the specified date.

Pradhan Mantri Shram Yogi Maandhan

• The Government of India has introduced a pension scheme for unorganized workers called Pradhan Mantri Shram Yogi Maandhan (PM-SYM) to provide old-age protection for these workers. Unorganized workers engaged in various occupations with a monthly income of ₹15,000 or less and belonging to the age group of 18-40 years are eligible. Those not covered under the New Pension Scheme (NPS), Employees State Insurance Corporation (ESIC) scheme, or Employees Provident Fund Organisation (EPFO) are eligible for this scheme.

PM SVANidhi

• The Ministry of Housing and Urban Affairs introduced the PM Street Vendor’s Atma Nirbhar Nidhi (PM SVANidhi) on June 1, 2020, to offer affordable working capital loans to street vendors affected by the Covid-19 lockdown, enabling them to restart their livelihoods.
• Initially set until March 2022, the scheme has been extended until December 2024. The focus includes an augmented collateral-free affordable loan corpus, increased adoption of digital transactions, and comprehensive socio-economic development for street vendors and their families.

Scheme Benefits

• Street vendors can access a working capital loan of up to ₹10,000, repayable in monthly installments over a one-year tenure. Timely or early repayment entitles beneficiaries to an interest subsidy of 7% per annum, credited quarterly through Direct Benefit Transfer.
• There are no penalties for early repayment. The scheme encourages digital transactions with cashback incentives of up to ₹100 per month.
• Vendors can escalate the credit limit upon timely or early loan repayment.

AatmaNirbhar Bharat Abhiyaan

• AatmaNirbhar Bharat Abhiyaan, or the Self-reliant India campaign, is the vision for a new India announced by Prime Minister Shri Narendra Modi on May 12, 2020. The economic package of ₹20 lakh crore under this initiative aims to guide the country out of the COVID-19 crisis by fostering self-reliance.
• The five pillars of AatmaNirbhar Bharat are Economy, Infrastructure, System, Vibrant Demography, and Demand. The Finance Minister has unveiled government reforms and enablers across seven sectors as part of AatmaNirbhar Bharat Abhiyaan.

Sankalp Se Siddhi Programme

• Launched to uplift the tribal community of India, the Sankalp Se Siddhi Programme addresses the various challenges faced by tribal communities. The key initiative, Sankalp Se Siddhi-Mission Van Dhan, aims to empower tribals. TRIFED, as the nodal agency for tribal empowerment, continually launches initiatives to improve tribal income and livelihoods while preserving their way of life and traditions.

Van Dhan Internship Programme

• The Ministry of Tribal Affairs initiated the Van Dhan Internship Programme on October 17, 2019, organized by TRIFED. This program trains interns to help the tribal population become self-reliant entrepreneurs.

Solar Charkha Mission

• Former President Ram Nath Kovind launched the Solar Charkha Mission on June 27, 2018. The government provides a ₹550 crore subsidy to artisans, generating employment in rural areas. The Ministry of Micro, Small, and Medium Enterprise covers 50 identified clusters nationwide, employing 400 to 2000 artisans in each cluster.
• As part of this initiative, the government introduced the Sampark portal, a digital platform connecting five lakh job seekers with the Ministry of Micro, Small, and Medium Enterprise (MSME).

Nai Manzil Scheme

• Launched on August 8, 2015, in Patna, the Nai Manzil Scheme is a Central Sector Scheme designed for individuals aged 17 to 35 from all minority communities, including Madrasa students. The scheme aims to address the educational and livelihood needs of minority communities, particularly Muslims, who lag in educational achievements compared to other minority groups.
• This program provides a new direction and goal for out-of-school or dropped-out students, especially those in Madrasas, as they may not receive formal Class 12 and Class 10 certificates, limiting their opportunities for employment in the organized sector.

Skill Upgradation Programme for Minorities

• A skill upgradation program for minorities focuses on enhancing skills and training in ancestral arts, and preserving traditional arts and crafts, which are valuable heritage resources. An additional budget of ₹100 crore for the Modernization of Madrasas has been allocated to the Department of School Education.

Prelims Facts

• The definition of poverty in India is based on calorie intake (UPPSC (Mains) 2008).
• In which year did the UNO adopt a definition of absolute poverty?- 1995 (UPPSC (Pre) 2017)
• The concept of the ‘Vicious Circle of Poverty’ is associated with -Nurkse (UPPSC (Pre) 2014)
• Those who continuously move between being poor and non-poor are known as Cyclic poor (IPSC (Pre) 2016].
• The idea of ‘cultural poverty’ was proposed by -Oscar Lewis ( UPPSC (Pre) 2020]
• In which year was the book titled ‘Poverty and Un-British Rule in India’ published? -1901 (UPPSC (Mains) 2013
• The Multi-dimensional Poverty Index (MPI) includes -Health, Education, and Living Standard [UPPSC (Pre) 2019)
• The aim of the differentiated interest scheme was to provide concessional loans to -The weaker section of society [ UP Lower 2008]
• Which committee was constituted in India to identify families that are Below the Poverty Line (BPL)? -Hashim Committee ( UPPSC (Pre) 2018]
• According to the Planning Commission Report for the year 1999 to 2000, the highest percentage of people living Below the Poverty Line was in which state? -Odisha (UKPSC (Pre) 2002, 2006, UPPSC (Pre) 2014
• Which method is used to decide the poverty line? -Average per capita income, calories in food, headcount ratio (CGPSC (Pre) 2005)
• In a given year in India, official poverty lines are higher in some states than in others because -Price levels vary from state to state [ IAS (Pre) 2019)
• The methodology followed for poverty estimation by using 61st National Sample Survey Organization (NSSO) data in 2004 to 2005 is -Mixed Recall Method (MRM) (JPSC (Pre) 2016]
• The Tendulkar Committee has estimated that in India the percentage of the population Below the Poverty Line is -37.2% (UPPSC (Pre) 2012, UP UDA/LDA (Pre) 2013]
• The Lorenz Curve is measured by -Inequality of income [UPPSC (Pre) 2018]
• Who has given the idea of Self-Help Groups as an effective tool for poverty alleviation? -Md Yunus [BPSC (Pre) 2018
• Which committee’s recommendations are used for estimating the poverty line in India? -Lakdawala Committee [UP Lower 2013]
• The Government of India constituted a committee to set new standards for the estimation of the population living Below the Poverty Line. Who was the Chairman of this committee? -Suresh Tendulkar [UP UDA/LDA (Pre) 2013]

UPSC NCERT Practice Questions

1,which of the folowing is are the types of powery uppsc (pre) 2023.

1. Absolute poverty

2. Relative poverty

3. Subjective poverty

4. Functional poverty

Choose the correct answer by using the codes given below.

(a) 1 and 4

(b) 1, 2 and 3

(c) 3 and 4

(d) 1 and 2

2. What is the theme of the International Day for the Eradication of Poverty for 2022-23?

(a) “Dignity for all in practice.”

(b)”Coming together to end poverty and discrimination.”

(c)”Acting together to empower children, their families and communities to end poverty.”

(d)”Accelerating global actions for a world without poverty.”

3. Consider the following statements.

1. Gini co-efficient is the measure of income inequality in a country with 1 representing complete inequality and 0, as complete equality.

2. India’s Gini co-efticient is less than the US, but

more than China.

Which of the statements) given above is/are correct?

(c) Both 1 and 2

(d) Neither 1 nor 2

4. Match List I with List II and select the correct answer by using the codes given below the list.

 a 3 4 1 2

5. The Government of India has decided to measure poverty line in terms of

(a) household consumption 

(b) household savings

(c) household investment 

(d) household

6. Estimates of poverty are made by the Planning Commission based on the data provided by which of the following?

(c) Ministry of Rural Development

(d) Finance Ministry

7. Consider the following statements.

1. Assam has the highest percentage of poverty according to the Suresh Tendulkar Committee in India.

2. In India, the infant mortality rate per thousand of live births of girls is more than of boys.

8. Which one of the following indices is most suitable to assess the intensity of poverty in India?

(a) Human Development Index

(b) Gender Inequality Index

(c) Human Poverty Index

(d) Multi-dimensional Poverty Index.

9. Which among the following committee’s recommendations are used for estimating the poverty line in India?

(a) Dutt Committee

(b) Lakdawala Committee

(c) Chelliah Committee

(d) Chakravarty Committee

10.Eleventh Five Year Plan aims to reduce the poverty ratio by what percentage by the year 2012?

(a) 2.0% 

 (d) 15.0%

11. Disguised unemployment generally means IAS (Pre) 2013

(a) large number of people remain unemployed

(b) alternative employment is not available.

(c) marginal productivity of labour is zero.

(d) productivity of workers is low.

12. The mismatch in the regional or occupational pattern of job vacancies and the pattern of worker availability results in

(a) Structural unemployment

(b) disguised unemployment

(c) altered unemployment

(d) cyclical unemployment

13. Among the following who are eligible to benefit from MNREGA? IAS (Pre) 2011

(a) Adult members of only SC and ST households

(b) Adult members of BPL households

(c) Adult members of households of all backward communities

(d) Adult members of any households

14. Disguised unemployment in India is mainly related to MPPSC (Pre) 2001

1. agricultural sector

2. rural sector

4. urban area

3. factory sector

Select the correct answer using the codes given below.

(a) 1 and 2

(b) 1 and 4

(c) 2 and 4

(d) 2 and 3

15. How does the National Rural Livelihood mission seek to improve livelihood options of rural poor? IAS (Pre) 2012

1. By setting up a large number of new manufacturing industries and agribusiness centres in rural areas.

2. By strengthening Self-Help Groups and providing skill development.

3. By supplying seeds, fertilisers, diesel pump-sets and micro-irrigation equation free of cost to farmers.

(c) 1 and 3

(d) All of the above

Know Right Answer

Frequently asked questions (faqs), 1. faq: what are the main causes of poverty.

Answer: Poverty is a complex issue with multiple contributing factors. Some primary causes include lack of education, limited access to healthcare, unequal distribution of resources, economic inequality, and systemic issues such as discrimination and social exclusion. Addressing these root causes requires a comprehensive approach that involves education, healthcare reform, social policies, and economic development initiatives.

2. FAQ: How does unemployment impact poverty rates?

Answer: Unemployment significantly contributes to the perpetuation of poverty. When individuals are unemployed, they face a loss of income, which can lead to financial instability and a decline in living standards. Moreover, long-term unemployment can create a cycle of poverty by limiting access to education and job training opportunities. Effective strategies to combat poverty must include policies that address unemployment through job creation, skills development, and support for industries with growth potential.

3. FAQ: What role can governments play in reducing poverty and unemployment?

Answer: Governments play a crucial role in addressing poverty and unemployment through policy initiatives and strategic interventions. Some key measures include:

• Economic Policies: Implementing policies that promote inclusive economic growth, job creation, and equitable distribution of resources.
• Education and Training: Investing in education and vocational training programs to enhance the skills of the workforce, making them more employable in evolving industries.
• Social Safety Nets: Establishing and strengthening social safety nets such as unemployment benefits, healthcare assistance, and food support to protect vulnerable populations during economic downturns.
• Anti-discrimination Measures: Enforcing laws and policies that combat discrimination based on gender, race, or other factors, ensuring equal opportunities for all.
• Infrastructure Development: Investing in infrastructure projects that create jobs and stimulate economic activity.

In case you still have your doubts, contact us on 9811333901.  

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• Poverty in India Essay for Students in English

Essay on Poverty In India

People living in poverty do not have enough money for basic necessities such as food and shelter. An example of poverty is the state a person is in when he is homeless and does not have enough money. The rate of poverty in India is increasing because of the population in the urban areas. Most importantly, crores of peoples are below the poverty line and most of the people are on the borderline of poverty. Poverty in India is seen mainly in the rural areas because of the uneducated and unemployed and increased population. Many people do not afford to get proper foods for their daily life and even they don’t have their own homes, they sleep on the footpath or road, more populations need more food, money, and for staying houses but due to lack of this poverty grows very quickly, thus in addition rich are growing richer and the poor becoming more poorer which becomes difficult to fill the gap. Poverty has many effects like it reduces poor housing, illiteracy, increase the rate of child labour and unemployment, poor hygiene hence these poor people can not afford a balanced diet, nice clothes, well education etc. reason only because they don’t have much money to afford this. Poverty can be controlled by giving them proper education and also providing the proper facilities to the farmers so that those farmers get more profitable and do not migrate to cities in search of employment. Also, the illiterate people should get proper education to make their life better. Family planning is also essential for coming out of poverty. Poverty in our country is from ancient times. Even earlier times the poor people were not given the place that rich people used to get even if they were not allowed to enter religious places. Main causes of poverty are like unemployment, lack of education, poor utilization of resources, corruption and poor government policy.

How You Can Improve or Solve Poverty in India?

Poverty can be solved by improving food security by providing three meals a day and making them healthy and providing houses for those people at low cost and giving them proper education and facilities so that they can earn well and take care of their family and live a peaceful life. Awareness on population so that once the population is under control, the economy of the country will improve and move towards development and decrease in the poverty line. Poverty is becoming a complex problem for the people and for the government. How to overcome this, in India the poverty is high compared to other countries because the growth rate of per capita income per person is very low.

With lack of job opportunities many people move as a rickshaw puller, construction workers, domestic servants etc, with irregular small incomes hence they live in slum areas. Also, lack of land resources has been one of the major causes of poverty in India, even the small farmers of our country lead to poverty because they cultivate but do not get proper money in terms of profit and leads to poverty.

Population of India

The population has been increasing in India at a rapid speed, India’s population in 1991 was around 84.3 crores where was poverty at a high rate but now the current population of our country is around 130 crores whereas the population is almost doubled in last three decades but still not enough done for controlling the poverty in our country. Due to an increase in population, there is more unemployment, hence poverty is just the reflection of unemployment. More capital is required for making industry, giving proper transport facilities and other projects, hence the deficiency of its country is still underdeveloped and causes more poverty. Lack of skilled labor also leads to poverty because less-skilled labor have insufficient industrial education and training. Lack of infrastructure means that transport and communication have not been properly developed so that the farmers are not getting fertilizers for cultivation on time and industries do not get power supply and raw materials on time and thus end products are not marketed properly and not reachable on time. Because of poverty sometimes we don’t get those things for what we actually are. Hence to come out of poverty our government has to be more serious and also the citizens should take equal responsibilities. Remove the poverty from country governments has started many steps, in last 2-3 years we have seen that they become more serious by bringing GST in the action, demonetization so because of GST all the businessman can pay full tax and which will help to develop the country and the poverty ratio can be reduced. Steps of demonetization were taken so that black money can be utilized for the poor people and poverty can be reduced. We can overcome poverty by following all the guidelines of the government and can be free from poverty.

India's Poverty Factors

One of the biggest problems of poverty in India is the country's rapid population growth. As a result, there is a high rate of illiteracy, poor health-care facilities, and a lack of financial resources. Furthermore, the high population growth rate has an impact on individual income, making individual income much lower. By 2026, India's population is predicted to surpass 1.5 billion, making it the world's largest country. However, Economic growth is not rising at the same rate as the rest of the world. This indicates a labor shortage. About 20 million new jobs will be required to accommodate this big population. If such a vast number of people are poor, the number of poor will keep rising.

How Much Research is Important for Students to Write Good Essays?

The students must realize that brainstorming and a mind map of the essay will take them in the direction of their research. With the advent of the internet, the days are numbered for students who rely on a well-tipped encyclopedia from the school library as their only authoritative source for their story. If there is any real problem for our readers today is reducing their resources to a manageable number. At this stage, it is important to:

Make sure the research material is directly related to the essay work

Record detailed sources of information that they will use in their story

Communicate in person by asking questions and challenging their own bias

Identify the main points that will be highlighted in the story

Gather ideas, arguments, and opinions together

Identify the major issue they will discuss in their case.

Once these stages have been completed by the student, the student will be ready to make his points in a logical order and prepare an essay.

Therefore, the topic discussed on this page is poverty and poverty is not a human problem but a national one. Also, it should be addressed immediately with the implementation of effective measures. In addition, the eradication of poverty has been a prerequisite for sustainable and inclusive growth for individuals, communities, the country and the economy.

Paragraph Tips on Essay Writing

Each paragraph should focus on one main idea

The Paragraphs should follow a logical sequence, students should collect similar ideas together to avoid collisions

Paragraphs should be stated consistently, learners should be able to choose which line to reverse or skip.

Transition words and similar phrases, as a result, should instead be used to provide flow and provide a bridge between Paragraphs.

General Structure of an Essay

Introduction: Give the reader the essence of the essay. It sets out the broader argument that the story will make and informs the reader of the author's general opinion and method of questioning.

Body Paragraphs: These are the ‘flesh’ of the essay and outline the point made in the introduction by a point with supporting evidence.

Conclusion: Usually the conclusion will repeat the middle argument while providing a summary of the main reasons supporting the story even before linking everything back to the first question.

FAQs on Poverty in India Essay for Students in English

1. What are the Causes of Poverty in India?

The cause of poverty is very obvious in a country like India. The people in India are very careless about the population growth and due to which there is a lot of hassle and unnecessary elevation in population growth rate. This is automatically leading to poverty as there are fewer resources and more people to be served in each state in India. Various causes affect poverty:

Unemployment.

The intensity of population.

The high rate of inflation.

Lack of skilled labor

2. What are the Types of Poverty?

Although there are only two main types of poverty existing in India we will be learning all of them as mentioned in the following lines. The two main classifications of poverty are relative poverty and absolute poverty and both of them emphasize income and consumption. Sometimes, poverty cannot be blamed or associated with economic problems but also it must be associated with society and politics.

There are six types of poverty which are listed below:

Situational poverty.

Generation poverty.

Absolute poverty.

Relative poverty.

Urban poverty.

Rural poverty.

3. How to Reduce the Poverty Line in India?

India is a country that has been under the radar of poverty for centuries. The people of India are making efforts to take themselves out of the poverty line but there are a lot of hindrances. The lack of resources and limited alternatives have thrown the rural and urban residents below the poverty line making life unhealthy and miserable for them. 

Here are some measures listed below

Provide food, shelter and clothes facilities to poor people.

Encourage them for education either male or female. 

Give employment.

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Students should refer to Vedantu for downloading as these solutions will be filling you with the basic knowledge of writing essays. There are loads of vocabulary words and phrases which will enable the students to write high-class essays. The Vedantu website provides 100% authentic content which will lead to additional accuracy of the student’s essay. Basic concepts of writing an essay are available free of cost on the Vedantu website. Avoid problems and enjoy hassle-free preparation with the help of Vedantu.

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I.  Introduction

Ii.  the expenditure surveys, iii.  nsso versus nas expenditure estimates, iv.  the official poverty lines, v.  controversies regarding poverty lines 3, vi.  poverty at the national level, vii.  poverty in the states: rural and urban, viii.  poverty in the states by social group, ix.  poverty in the states by religious group, x.  inequality, xi.  concluding remarks, a comprehensive analysis of poverty in india.

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Arvind Panagariya , Megha Mukim; A Comprehensive Analysis of Poverty in India. Asian Development Review 2014; 31 (1): 1–52. doi: https://doi.org/10.1162/ADEV_a_00021

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This paper offers a comprehensive analysis of poverty in India. It shows that regardless of which of the two official poverty lines we use, we see a steady decline in poverty in all states and for all social and religious groups. Accelerated growth between fiscal years 2004–2005 and 2009–2010 also led to an accelerated decline in poverty rates. Moreover, the decline in poverty rates during these years has been sharper for the socially disadvantaged groups relative to upper caste groups so that we now observe a narrowing of the gap in the poverty rates between the two sets of social groups. The paper also provides a discussion of the recent controversies in India regarding the choice of poverty lines.

This paper provides comprehensive up-to-date estimates of poverty by social and religious groups in the rural and urban areas of the largest 17 states in India. The specific measure of poverty reported in the paper is the poverty rate or headcount ratio (HCR), which is the proportion of the population with expenditure or income below a pre-specified level referred to as the poverty line. In the context of most developing countries, the poverty line usually relates to a pre-specified basket of goods presumed to be necessary for above-subsistence existence.

In so far as prices vary across states and between rural and urban regions within the same state, the poverty line also varies in nominal rupees across states and between urban and rural regions within the same state. 1 Similarly, since prices rise over time due to inflation, the poverty line in nominal rupees in a given location is also adjusted upwards over time.

The original official poverty estimates in India, provided by the Planning Commission, were based on the Lakdawala poverty lines, so named after Professor D. T. Lakdawala who headed a 1993 expert group that recommended these lines. Recommendations of a 2009 expert committee headed by Professor Suresh Tendulkar led to an upward adjustment in the rural poverty line relative to its Lakdawala counterpart. Therefore, while the official estimates for earlier years were based on the lines and methodology recommended by the expert group headed by Lakdawala, those for more recent years were based on the line and methodology recommended by the Tendulkar Committee. Official estimates based on both methodologies exist for only two years, 1993–1994 and 2004–2005. These estimates are provided for the overall population, for rural and urban regions of each state, and for the country as a whole. The Planning Commission does not provide estimates by social or religious groups.

In this paper, we provide estimates using Lakdawala and Tendulkar lines for different social and religious groups in rural and urban areas in all major states and at the national level. Our estimates based on Lakdawala lines are computed for all years beginning in 1983 for which large or “thick” expenditure surveys have been conducted. Estimates based on the Tendulkar line and methodology are provided for the three latest large expenditure surveys, 1993–1994, 2004–2005, and 2009–2010.

Our objective in writing the paper is twofold. First, much confusion has arisen in the policy debates in India around certain issues regarding poverty in the country—for instance, whether or not growth has helped the poor (if yes, how much and over which time period) and whether growth is leaving certain social or religious groups behind. We hope that by providing poverty estimates for various time periods, social groups, religious groups, states, and urban and rural areas, this paper will help ensure that future policy debates are based on fact. Second, researchers interested in explaining how various policy measures impact poverty might find it useful to have the poverty lines and the associated poverty estimates for various social and religious groups and across India's largest states in rural and urban areas readily available in one place.

The literature on poverty in India is vast and many of the contributions or references to the contributions can be found in Srinivasan and Bardhan ( 1974 , 1988 ), Fields ( 1980 ), Tendulkar ( 1998 ), Deaton and Drèze ( 2002 ), Bhalla ( 2002 ), and Deaton and Kozel ( 2005 ). Panagariya ( 2008 ) provides a comprehensive treatment of the subject until the mid-2000s including the debates on whether or not poverty had declined in the post-reform era and whether or not reforms had been behind the acceleration in growth rates and the decline in poverty. Finally, several of the contributions in Bhagwati and Panagariya ( 2012a , 2012b ) analyze various aspects of poverty in India using the expenditures surveys up to 2004–2005. In particular, Cain, Hasan, and Mitra ( 2012 ) study the impact of openness on poverty; Mukim and Panagariya ( 2012 ) document the decline in poverty across social groups; Dehejia and Panagariya ( 2012 ) provide evidence on the growth in entrepreneurship in services sectors among the socially disadvantaged groups; and Hnatkovska and Lahiri ( 2012 ) provide evidence on and reasons for narrowing wage inequality between the socially disadvantaged groups and the upper castes.

To our knowledge, this is the first paper to systematically and comprehensively exploit the expenditure survey conducted in 2009–2010. This is important because growth was 2–3 percentage points higher between 2004–2005 and 2009–2010 surveys than between any other prior surveys. As such, we are able to study the differential impact accelerated growth has had on poverty alleviation both directly, through improved employment and wage prospects for the poor, and indirectly, through the large-scale redistribution program known as the National Rural Employment Guarantee Scheme, which enhanced revenues made possible. In addition, ours is also the first paper to comprehensively analyze poverty across religious groups. In studying the progress in combating poverty across social groups, the paper complements our previous work, Mukim and Panagariya ( 2012 ).

The paper is organized as follows. In Section II , we discuss the history and design of the expenditure surveys conducted by the National Sample Survey Office (NSSO), which form the backbone of all poverty analysis in India. In Section III , we discuss the rising discrepancy between average expenditures as reported by the NSSO surveys and by the National Accounts Statistics (NAS) of the Central Statistical Office (CSO). In Section IV , we describe in detail the evolution of official poverty lines in India, while in Section V we discuss some recent controversies regarding the level of the official poverty line. In Sections VI to Section IX , we present the poverty estimates. In Section X , we discuss inequality over time in rural and urban areas of the 17 states. In Section XI , we offer our conclusions.

The main source of data for estimating poverty in India is the expenditure survey conducted by the NSSO. India is perhaps the only developing country that began conducting such surveys on a regular basis as early as 1950–1951. The surveys have been conducted at least once a year since 1950–1951. However, the sample had been too small to permit reliable estimates of poverty at the level of the state until 1973–1974. A decision was made in the early 1970s to replace the smaller annual surveys by large-size expenditure (and employment–unemployment) surveys to be conducted every 5 years.

This decision led to the birth of “thick” quinquennial (5-yearly) surveys. Accordingly, the following 8 rounds of large-size surveys have been conducted: 27 (1973–1974), 32 (1978), 38 (1983), 43 (1987–1988), 50 (1993–1994), 55 (1999–2000), 61 (2004–2005), and 66 (2009–2010). Starting from the 42nd round in 1986–1987, a smaller expenditure survey was reintroduced. This was conducted annually except during the years in which the quinquennial survey was to take place. Therefore, with the exception of the 65th and 67th rounds in 2008–2009 and 2010–2011, respectively, an expenditure survey exists for each year beginning 1986–1987.

While the NSSO collects the data and produces reports providing information on monthly per-capita expenditures, it is the Planning Commission that computes the poverty lines and provides official estimates of poverty. The official estimates are strictly limited to quinquennial surveys. While they cover rural, urban, and total populations in different states and at the national level, estimates are not provided for specific social or religious groups. These can be calculated selectively for specific groups or specific years by researchers. With rare exceptions, discussions and debates on poverty have been framed around the quinquennial surveys even though the other survey samples are large enough to allow reliable estimates at the national level.

For each household interviewed, the survey collects data on the quantity of and expenditure on a large number of items purchased. For items such as education and health services, where quantity cannot be meaningfully defined, only expenditure data are collected. The list of items is elaborate. For example, the 66th round collected data on 142 items under the food category; 15 items under energy; 28 items under clothing, bedding, and footwear; 19 items under educational and medical expenses; 51 items under durable goods; and 89 in the other items category.

It turns out that household responses vary systematically according to the length of the reference period to which the expenditures are related. For example, a household could be asked about its expenditures on durable goods during the preceding 30 days or the preceding year. When the information provided in the first case is converted into annual expenditures, it is found to be systematically lower than when the survey directly asks households to report their annual spending. Therefore, estimates of poverty vary depending on the reference period chosen in the questionnaire.

Most quinquennial surveys have collected information on certain categories of relatively infrequently purchased items including clothing and consumer durables on the basis of both 30-day and 365-day reference periods. For other categories, including all food and fuel and consumer services, they have used a 30-day reference period. The data allow us to estimate two alternative measures of monthly per-capita expenditures that refer to the following: (i) a uniform reference period (URP) where all expenditure data used to estimate monthly per-capita expenditure are based on the 30-day reference period, and (ii) a mixed reference period (MRP) where expenditure data used to estimate the monthly per-capita expenditure are based on the 365-day reference period in the case of clothing and consumer durables and the 30-day reference period in the case of other items.

With rare exceptions, monthly per-capita expenditure associated with the MRP turns out to be higher than that associated with the URP. The Planning Commission's original estimate of poverty that employed the Lakdawala poverty lines had relied on the URP monthly per-capita expenditures. At some time prior to the Tendulkar Committee report, however, the Planning Commission decided to shift to the MRP estimates. Therefore, while recommending revisions that led to an upward adjustment in the rural poverty line, the Tendulkar Committee also shifted to the MRP monthly per-capita expenditures in its poverty calculations. Therefore, the revised poverty estimates available for 1993–1994, 2004–2005, and 2009–2010 are based on the Tendulkar lines and the MRP estimates of monthly per-capita expenditures.

We note an important feature of the NSSO expenditure surveys at the outset. The average monthly per-capita expenditure based on the surveys falls well short of the average private consumption expenditure separately available from the NAS of the CSO. Moreover, the proportionate shortfall has been progressively rising over successive surveys. These two observations hold regardless of whether we use the URP or MRP estimate of monthly per-capita expenditure available from the NSSO. Figure 1 graphically depicts this phenomenon in the case of URP monthly per-capita expenditure, which is more readily available for all quinquennial surveys since 1983.

NSSO Household Total URP Expenditure Estimate as % of NAS Total Private Consumption Expenditure

Precisely what explains the gap between the NSSO and NAS expenditures has important implications for poverty estimates. For example, if the gap in any given year is uniformly distributed across all expenditure classes as Bhalla ( 2002 ) assumes in his work, true expenditure in 2009–2010 is uniformly more than twice of what the survey finds. This would imply that many individuals currently classified as falling below the poverty line are actually above it. Moreover, a recognition that the proportionate gap between NSSO and NAS private expenditures has been rising over time implies that the poverty ratio is being overestimated by progressively larger margins over time. At the other extreme, if the gap between NSSO and NAS expenditures is explained entirely by underreporting of the expenditures by households classified as non-poor, poverty levels will not be biased upwards.

There are good reasons to believe, however, that the truth lies somewhere between these two extremes. The survey underrepresents wealthy consumers. For instance, it is unlikely that any of the billionaires, or most of the millionaires, are covered by the survey. Likewise, the total absence of error among households below the poverty line is highly unlikely. For example, recall that the expenditures on durables are systematically underreported for the 30-day reference period relative to that for 365-day reference period. Thus, in all probability, households classified as poor account for part of the gap so that there is some overestimation of the poverty ratio at any given poverty line. 2

The 1993 expert group headed by Lakdawala defined all-India rural and urban poverty lines in terms of per-capita total consumption expenditure at 1973–1974 market prices. The underlying consumption baskets were anchored to the per-capita calorie norms of 2,400 and 2,100 in rural and urban areas, respectively. The rural and urban poverty line baskets were based on different underlying baskets, which meant that the two poverty lines represented different levels of real expenditures.

State-level rural poverty lines were derived from the national rural poverty line by adjusting the latter for price differences between national and state-level consumer price indices for agricultural laborers. Likewise, state-level urban poverty lines were derived from the national urban poverty line by adjusting the latter for price differences between the national and state-level consumer price indices for industrial laborers. National and state-level rural poverty lines were adjusted over time by applying the national and state-level price indices for agricultural workers, respectively. Urban poverty lines were adjusted similarly over time.

Lakdawala lines served as the official poverty lines until 2004–2005. The Planning Commission applied them to URP-based expenditures in the quinquennial surveys to calculate official poverty ratios. Criticisms of these estimates on various grounds led the Planning Commission to appoint an expert group under the chairmanship of Suresh Tendulkar in December 2005 with the directive to recommend appropriate changes in methodology for computing poverty estimates. The group submitted its report in 2009.

In its report, the Tendulkar committee noted three deficiencies of the Lakdawala poverty lines (Government of India 2009 ). First, the poverty line baskets remained tied to consumption patterns observed in 1973–1974. But more than 3 decades later, these baskets had shifted, even for the poor. Second, the consumer price index for agricultural workers understated the true price increase. This meant that over time the upward adjustment in the rural poverty lines was less than necessary so that the estimated poverty ratios understated rural poverty. Finally, the assumption underlying Lakdawala lines that health and education would be largely provided by the government did not hold any longer. Private expenditures on these services had risen considerably, even for the poor. This change was not adequately reflected in the Lakdawala poverty lines.

To remedy these deficiencies, the Tendulkar committee began by noting that the NSSO had already decided to shift from URP-based expenditures to MRP-based expenditures to measure poverty. With this in view, the committee's first step was to situate the revised poverty lines in terms of MRP expenditures in some generally acceptable aspect of the existing practice. To this end, it observed that since the nationwide urban poverty ratio of 25.7%, calculated from URP-based expenditures in the 2004–2005 survey, was broadly accepted as a good approximation of prevailing urban poverty, the revised urban poverty line could be anchored to yield this same estimate using MRP-based per-capita consumption expenditure from the 2004–2005 survey. This decision led to MRP-based per-capita expenditure of the individual at the 25.7 percentile in the national distribution of per-capita MRP expenditures becoming the national urban poverty line.

The Tendulkar committee further argued that the consumption basket associated with the national urban poverty line also be accepted as the rural poverty line consumption basket. This implied the translation of the new urban poverty line using the appropriate price index to obtain the nationwide rural poverty line. Under this approach, rural and urban poverty lines became fully aligned. Applying MRP-based expenditures, the new rural poverty line yielded a rural poverty ratio of 41.8% in 2004–2005 compared with 28.3% under the old methodology.

It is important to note that even though the method of pegging the national urban poverty line in the manner done by the Tendulkar committee left the national urban poverty in 2004–2005 originally measured at the Lakdawala urban poverty line unchanged, it did impact state-level urban poverty estimates. The methodology required that the state-level rural and urban poverty lines be derived from the national urban poverty line by applying the appropriate price indices derived from the price information within the sample surveys. In some cases, the state-level shift was sufficiently large to significantly alter the estimate of urban poverty. For example, Lakdawala urban poverty line in Gujarat in 2004–2005 was Rs541.16 per-capita per month. The corresponding Tendulkar line turned out to be Rs659.18. This change led the urban poverty estimate in 2004–2005 to jump from 13.3% based on the Lakdawala line to 20.1% based on the Tendulkar line.

An important final point concerns the treatment of health and education spending by the Tendulkar Committee in recommending the revised poverty lines. On this issue, it is best to directly quote the Tendulkar Committee report (Government of India 2009 , p. 2):

Even while moving away from the calorie norms, the proposed poverty lines have been validated by checking the adequacy of actual private expenditure per capita near the poverty lines on food, education, and health by comparing them with normative expenditures consistent with nutritional, educational, and health outcomes. Actual private expenditures reported by households near the new poverty lines on these items were found to be adequate at the all-India level in both the rural and the urban areas and for most of the states. It may be noted that while the new poverty lines have been arrived at after assessing the adequacy of private household expenditure on education and health, the earlier calorie-anchored poverty lines did not explicitly account for these. The proposed poverty lines are in that sense broader in scope.

We address here the two rounds of controversies over the poverty line that broke out in the media in September 2011 and March 2012. The first round of controversy began with the Planning Commission filing an affidavit with the Supreme Court stating that the poverty line at the time had been on average Rs32 and Rs26 per person per day in urban and rural India, respectively. Being based on the Tendulkar methodology, these lines were actually higher than the Lakdawala lines on which the official poverty estimates had been based until 2004–2005. However, the media and civil society groups pounced on the Planning Commission for diluting the poverty lines so as to inflate poverty reduction numbers and to deprive many potential beneficiaries of entitlements. For its part, the Planning Commission did a poor job of explaining to the public precisely what it had done and why.

The controversy resurfaced in March 2012 when the Planning Commission released the poverty estimates based on the 2009–2010 expenditure survey. The Planning Commission reported that these estimates were based on average poverty lines of Rs28.26 and Rs22.2 per person per day in urban and rural areas, respectively. Comparing these lines to those previously reported to the Supreme Court, the media once again accused the Planning Commission of lowering the poverty lines. 4 The truth of the matter was that whereas the poverty lines reported to the Supreme Court were meant to reflect the price level prevailing in mid-2011, those underlying poverty estimates for 2009–2010 were based on the mid-point of 2009–2010. The latter poverty lines were lower because the price level at the mid-point of 2009–2010 was lower than that in mid-2011. In real terms, the two sets of poverty lines were identical.

While there was no basis to the accusations that the Planning Commission had lowered the poverty lines, the issue of whether the poverty lines remain excessively low despite having been raised does require further examination. In addressing this issue, it is important to be clear about the objectives behind the poverty line.

Potentially, there are two main objectives behind poverty lines: to track the progress made in combating poverty and to identify the poor towards whom redistribution programs can be directed. The level of the poverty line must be evaluated separately against each objective. In principle, we may want separate poverty lines for the two objectives.

With regard to the first objective, the poverty line should be set at a level that allows us to track the progress made in helping the truly destitute or those living in abject poverty, often referred to as extreme poverty. Much of the media debate during the two episodes focused on what could or could not be bought with the poverty-line expenditure. 5 There was no mention of the basket of goods that was used by the Tendulkar Committee to define the poverty line.

In Annex E of its report (Government of India 2009 ), the Tendulkar Committee gave a detailed itemized list of the expenditures of those “around poverty line class for urban areas in all India.” Unfortunately, it did not report the corresponding quantities purchased of various commodities. In this paper, we now compute these quantities from unit-level data where feasible and report them in Table 1 for a household consisting of five members. 6 Our implicit per-person expenditures on individual items are within Rs3 of their corresponding expenditures reported in Annex E of the report of the Tendulkar Committee.

Source: Authors’ calculations using unit-level data (supplied by Rahul).

We report quantities wherever the relevant data are available. In the survey, the quantities are not always reported in weights. For example, lemons and oranges are reported in numbers and not in kilograms. In these cases, we have converted the quantities into kilograms using the appropriate conversion factors. The main point to note is that while the quantities associated with the poverty line basket may not permit a comfortable existence, including a balanced diet, they allow above-subsistence existence. The consumption of cereals and pulses at 50.9 kilograms (kg) and 3.5 kg compared with 48 kg and 5.5 kg, respectively, for the mean consumption of the top 30% of the population. Likewise, the consumption of edible oils and vegetables at 2.7 kg and 23.9 kg for the poor compared with 4.5 kg and 35.5 kg, respectively, for the top 30% of the population. 7 This comparison shows that, at least in terms of the provision of two square meals a day, the poverty line consumption basket is compatible with above-subsistence level consumption.

We reiterate our point as follows. In 2009–2010, the urban poverty line in Delhi was Rs1,040.3 per person per month (Rs34.2 per day). For a family of five, this amount would translate to Rs5,201.5 per month. Assuming that each family member consumes 10 kg per month of cereal and 1 kg per month of pulses and the prices of the two grains are Rs15 and Rs80 per kilogram, respectively, the total expenditure on grain would be Rs1,150. 8 This would leave Rs4,051.5 for milk, edible oils, fuel, clothing, rent, education, health, and other expenditures. While this amount may not allow a fully balanced diet, comfortable living, and access to good education and health, it is consistent with an above-subsistence level of existence. Additionally, if we take into account access to public education and health, and subsidized grain and fuel from the public distribution system, the poverty line is scarcely out of line with the one that would allow exit from extreme poverty.

But what about the role of the poverty line in identifying the poor for purposes of redistribution? Ideally, this exercise should be carried out at the local level in light of resources available for redistribution, since the poor must ultimately be identified locally. Nevertheless, if the national poverty line is used to identify the poor, could we still defend the Tendulkar line as adequate? We argue in the affirmative.

Going by the urban and rural population weights of 0.298 and 0.702 implicit in the population projections for 1 January 2010, the average countrywide per-capita MRP expenditure during 2009–2010 amounts to Rs40.2 per person per day. Therefore, going by the expenditure survey data, equal distribution across the entire country would allow barely Rs40.2 per person per day in expenditures. Raising the poverty line significantly above the current level must confront this limit with regard to the scope for redistribution.

It could be argued that this discussion is based on data in the expenditure survey, which underestimates true expenditures. The scope for redistribution might be significantly greater if we go by expenditures as measured in the NAS. The response to this criticism is that the surveys underestimate not just the average national expenditure but also the expenditures of those identified as poor. Depending on the extent of this underestimation, the need for redistribution itself would be overestimated.

Even so, it is useful to test the limits of redistribution by considering the average expenditure according to the NAS. The total private final consumption expenditure at current prices in 2009–2010 was Rs37,959.01 billion. Applying the population figure of 1.174 billion as of 1 January 2010 in the NSSO 2009–2010 expenditure survey, this total annual expenditure translates to daily spending of Rs88.58 per person. This figure includes certain items such as imputed rent on owner-occupied housing and expenditures other than those by households such as the spending of civil society groups, which would not be available for redistribution. Thus, per-capita expenditures achievable through equal distribution, even when we consider the expenditures as per the NAS, is likely to be modest.

To appreciate further the folly of setting too high a poverty line for the purpose of identifying the poor, recall that the national average poverty line was Rs22.2 per person per day in rural areas and Rs28.26 in urban areas in 2009–2010. Going by the expenditure estimates for different spending classes in Government of India ( 2011a ), raising these lines to just Rs33.3 and Rs45.4, respectively, would place 70% of the rural population and 50% of the urban population in poverty in 2009–2010. If we went a little further and set the rural poverty line at Rs39 per day and the urban poverty line at Rs81 per day in 2009–2010, we would place 80% of the population in each region below the poverty line. Will the fate of the destitute not be compromised if the meager tax revenues available for redistribution were thinly spread on this much larger population?

Before we turn to reporting the poverty estimates, we should clarify that while we have defended the current poverty line in India for both purposes—tracking abject poverty and redistribution—in general, we believe a case exists for two separate poverty lines to satisfy the two objectives. The poverty line to track abject poverty must be drawn independently of the availability of revenues for redistribution purposes and should be uniform nationally. The poverty line for redistribution purposes would in general differ from this line and, indeed, vary in different jurisdictions of the same nation depending on the availability of revenues. This should be evident from the fact that redistribution remains an issue even in countries that have entirely eradicated abject poverty. 9

Official poverty estimates are available at the national and state levels for the entire population, but not by social or religious groups, for all years during which the NSSO conducted quinquennial surveys. These years include 1973–1974, 1977–1978, 1983, 1987–1988, 1993–1994, 2004–2005, and 2009–2010, but not 1999–2000, as that year's survey became noncomparable to other quinquennial surveys due to a change in sample design. The Planning Commission has published poverty ratios for the first six of these surveys based on the Lakdawala lines and for the last three based on the Tendulkar lines. These ratios were estimated for rural and urban areas at the national and state levels.

In this paper, we provide comparable poverty rates for all of the last five quinquennial surveys including 2009–2010 derived from Lakdawala lines. For this purpose, we update the 2004–2005 Lakdawala lines to 2009–2010 using the price indices implicit in the official Tendulkar lines for 2004–2005 and 2009–2010 at the national and state levels. We provide estimates categorized by social as well as religious groups for all quinquennial surveys beginning in 1983 based on the Lakdawala lines and for the years relating to the last three such surveys based on the Tendulkar lines at the national and state levels.

While we focus mainly on the evolution of poverty since 1983 in this paper, it is useful to begin with a brief look at the poverty profile in the early years. This is done in Figure 2 using the estimates in Datt ( 1998 ) for years 1951–1952 to 1973–1974. The key message of the graph is that the poverty ratio hovered between 50% and 60% with a mildly rising trend.

The Poverty Ratio in India, 1951–1952 to 1973–1974 (%)

This is not surprising, as India had been extremely poor at independence. Unlike economies such as Taipei, China; the Republic of Korea; Singapore; and Hong Kong, China, the country then grew very slowly. Growth in per-capita income during these years had been a mere 1.5% per year. Such low growth coupled with a very low starting per-capita income meant at best limited scope for achieving poverty reduction even through redistribution. As argued above, even today, after more than 2 decades of almost 5% growth in per-capita income, the scope for redistribution remains limited. 10

We are now in a position to provide the poverty rates for the major social groups based on the quinquennial expenditure surveys beginning 1983. The social groups identified in the surveys are scheduled castes (SC), scheduled tribes (ST), other backward castes (OBC), and the rest, which we refer to as forward castes (FC). In addition, we define the nonscheduled castes as consisting of the OBC, and FC. The NSSO began identifying the OBC beginning 1999–2000. Since we are excluding this particular survey due to its lack of comparability with other surveys, the OBC as a separate group begins appearing in our estimates from 2004–2005 only.

In Table 2 , we provide the poverty rates based on the Lakdawala lines in rural and urban areas and at the national level. Four features of this table are worthy of note. First, poverty rates have continuously declined for every single social group in both the rural and urban areas. Contrary to common claims, growth has been steadily helping the poor from every broad social group escape poverty rather than leaving the socially disadvantaged behind.

FC = forward castes, NS = non-scheduled, OBC = other backward castes, SC = scheduled castes, ST = scheduled tribes.

Source: Authors’ calculations.

Second, the rates in rural India have consistently been the highest for the ST followed by the SC, OBC, and FC in that order. This pattern also holds in urban areas but with some exceptions. In particular, in some years, poverty rates of scheduled tribes are lower than that of scheduled castes, but this is not of great significance since more than 90% of the scheduled tribe population live in rural areas.

Third, with growth accelerating to above 8% beginning 2003–2004, poverty reduction between 2004–2005 and 2009–2010 has also accelerated. The percentage point reduction during this period has been larger than during any other 5-year period. Most importantly, the acceleration has been the greatest for the ST and SC in that order so that at last, the gap in poverty rates between the scheduled and nonscheduled groups has declined significantly.

Finally, while the rural poverty rates were slightly higher than the urban poverty rates for all groups in 1983, the order switched for one or more groups in several of the subsequent years. Indeed, in 2009–2010, the urban rates turned out to be uniformly higher for every single group. This largely reflects progressive misalignment of the rural and urban poverty lines with the former becoming lower than the latter. It was this misalignment that led the Tendulkar Committee to revise the rural poverty line and realign it to the higher, urban line.

Table 3 reports the poverty estimates based on the Tendulkar lines. Recall that the Tendulkar line holds the urban poverty ratio at 25.7% in 2004–2005 when measuring poverty at MRP expenditures. Our urban poverty ratio in Table 3 reproduces this estimate within 0.1 of a percentage point.

The steady decline in poverty rates for the various social groups in rural as well as urban areas, which we noted based on the Lakdawala lines in Table 2 , remains valid at the Tendulkar lines. Moreover, rural poverty ratios turn out to be higher than their urban counterparts for each group in each year. As in Table 2 , the decline had been sharpest during the high-growth period between 2004–2005 and 2009–2010.

Finally and most importantly, the largest percentage-point decline between these years in rural and urban areas combined had been for the ST followed by the SC, OBC, and FC in that order. Given that scheduled tribes also had the highest poverty rates followed by scheduled castes and other backward castes in 2004–2005, the pattern implies that the socially disadvantaged groups have achieved significant catching up with the better-off groups. This is a major break with past trends.

Next, we report the national poverty rates by religious groups. In Table 4 , we show the poverty rates based on Lakdawala lines of rural and urban India and of the country taken as a whole. Three observations follow. First, at the aggregate level (rural plus urban), poverty rates show a steady decline for Hindus, Muslims, Christians, Jains, and Sikhs. Poverty among the Buddhists also consistently declined except for 1983 and 1987–1988. With one exception (Muslims in rural India between 1987–1988 and 1993–1994), the pattern of declining poverty rates between any two successive surveys also extends to the rural and urban poverty rates in the case of the two largest religious communities, Hindus and Muslims.

Second, going by the poverty rates in 2009–2010 in rural and urban areas combined, Jains have the lowest poverty rates followed by Sikhs, Christians, Hindus, Muslims, and Buddhists. Prosperity among Jains and Sikhs is well known, but not the lower level of poverty among Christians relative to Hindus. Also interesting is the relatively small gap of just 5.8 percentage points between poverty rates among Hindus and Muslims.

Finally, the impact of accelerated growth on poverty between 2004–2005 and 2009–2010 that we observed across social groups can also be seen across religious groups. Once again, we see a sharper decline in the poverty rate for the largest minority, the Muslims, relative to Hindus who form the majority of the population.

This broad pattern holds when we consider poverty rates by religious groups based on the Tendulkar line, as seen in Table 5 . Jains have the lowest poverty rates followed by Sikhs, Christians, Hindus, Muslims, and Buddhists. With one exception (Sikhs in rural India between 1993–1994 and 2004–2005), poverty had declined steadily for all religious groups in rural as well as urban India. The only difference is that the decline in poverty among Muslims in rural and urban areas combined between the periods 2004–2005 and 2009–2010 had not been as sharp as that estimated from the Lakdawala lines. As a result, we do not see a narrowing of the difference in poverty between Hindus and Muslims. We do see a narrowing of the difference in urban poverty but this gain is neutralized by the opposite movement in the rural areas due to a very sharp decline in poverty among Hindus, perhaps due to the rapid decline in poverty among scheduled castes and scheduled tribes.

Before we turn to poverty estimates by state, we should note that in this paper, we largely confine ourselves to reporting the extent of poverty measured based on the two poverty lines. Other than occasional references to the determinants of poverty such as growth and caste composition, we make no systematic effort to identify them. Evidently, many factors influence the decline in poverty. For instance, the acceleration in growth between 2004–2005 and 2009–2010 also led to increased revenue that made it possible for the government to introduce the National Rural Employment Guarantee Scheme under which one adult member of each rural household is guaranteed 100 days per year of employment at a pre-specified wage. The employment guarantee scheme may well have been a factor in the recent acceleration in poverty reduction.

In a similar vein, rural–urban migration may also impact the speed of decline of poverty. Once again, rapid growth, which inevitably concentrates disproportionately in urban areas, may lead to some acceleration in rural-to-urban migration. If, in addition, the rural poor migrate in proportionately larger numbers in search of jobs, poverty ratios could fall in both rural and urban areas. In the rural areas, the ratio could fall because proportionately more numerous poor than in the existing rural population migrate. In the urban areas, the decline may result from these individuals being gainfully employed at wages exceeding the urban poverty line. Migration may also reinforce the reduction in rural poverty by generating extra rural income through remittances. Evidence suggests that this effect may have been particularly important in the state of Kerala.

We now turn to the progress made in poverty alleviation in different states. Though our focus in this paper is on poverty by social and religious groups, we first consider poverty at the aggregate level in rural and urban areas. India has 28 states and 7 union territories. To keep the analysis manageable, we limit ourselves to the 17 largest states. 11 Together, these states account for 95% of the total population. We exclude all seven union territories including Delhi; the smallest six of the seven northeastern states (retaining only Assam); and the states of Sikkim, Goa, Himachal Pradesh, and Uttaranchal. Going by the expenditure survey of 2009–2010, each of the included states has a population exceeding 20 million while each of the excluded states has a population less than 10 million. Among the union territories, only Delhi has a population exceeding 10 million.

A.  Rural and Urban Populations

We begin by presenting the total population in each of the 17 largest states and the distribution between rural and urban areas as revealed by the NSSO expenditure survey of 2009–2010 (Table 6 ). 12 The population totals in the expenditure survey are lower than the corresponding population projections by the registrar general and census commissioner of India (2006) as well as those implied by Census 2011. 13 Our choice is dictated by the principle that poverty estimates should be evaluated with reference to the population underlying the survey design instead of those suggested by external sources. For example, the urban poverty estimate in Kerala in 2009–2010 must be related to the urban population in the state covered by the expenditure survey in 2009–2010 instead of projections based on the censuses in 2001 and 2011. 14

As shown in Table 6 , 27% of the national population lived in urban areas, while the remaining 73% resided in rural areas in 2009–2010. This composition understates the true share of the urban population, revealed to be 31.2% in the 2011 census. The table shows 10 states having populations of more than 50 million (60 million according to the 2011 census). We will refer to these 10 states as the “large” states. They account for a little more than three-fourths of the total population of India. At the other extreme, eleven “small” states (excluded from our analysis and therefore not shown in Table 6 ) have populations of less than ten million (13 million according to the Census 2011) each. The remaining seven states, which we call “medium-size” states, have populations ranging from 36 million in Orissa to 22 million in Chhattisgarh (42 million in Orissa to 25.4 million in Chhattisgarh, according to the 2011 census).

Among the large states, Tamil Nadu, Maharashtra, Gujarat, and Karnataka, in that order, are the most urbanized with a rate of urbanization of 35% or higher. Bihar is the least urbanized among the large states, with an urbanization rate of just 10%. Among the medium-size states, only Punjab has an urban population of 35%. The rest have urbanization rates of 30% or less. Assam and Orissa, with an urban population of just 10% and 14%, respectively, are the least urbanized medium-size states.

B.  Rural and Urban Poverty

We now turn to the estimates of rural and urban poverty in the 17 largest states. To conserve space, we confine ourselves to presenting the estimates based on the Tendulkar line. We report the estimates based on the Lakdawala lines in the Appendix. Recall that the estimates derived from the Tendulkar line are available for 3 years: 1993–1994, 2004–2005, and 2009–2010. Disregarding 1973–1974 and 1977–1978, which are outside the scope of our paper, estimates based on the Lakdawala lines are available for an additional 2 years: 1983 and 1987–1988.

Table 7 reports the poverty estimates with the states arranged in descending order of their populations. Several observations follow. First, taken as a whole, poverty fell in each of the 17 states between 1993–1994 and 2009–2010. When we disaggregate rural and urban areas within each state, we still find a decline in poverty in all states in each region over this period. Indeed, if we take the 10 largest states, which account for three-fourths of India's population, every state except Madhya Pradesh experienced a consistent decline in both rural and urban poverty. The reduction in poverty with rising incomes is a steady and nationwide phenomenon and not driven by the gains made in a few specific states or certain rural or urban areas of a given state.

Second, acceleration in poverty reduction in percentage points per year during the highest growth period (2004–2005 to 2009–2010) over that in 1993–1994 to 2004–2005 can be observed in 13 out of the total 17 states. The exceptions are Uttar Pradesh and Bihar among the large states and Assam and Haryana among medium-size states. Of these, Uttar Pradesh and Assam had experienced at best modest acceleration in gross state domestic product (GSDP) during the second period while Haryana had already achieved a relatively low level of poverty by 2004–2005. The most surprising had been the negligible decline in poverty in Bihar between 2004–2005 and 2009–2010, as GSDP in this state had grown at double-digit rates during this period.

Finally, among the large states, Tamil Nadu had the lowest poverty ratio followed by Andhra Pradesh and Gujarat. Tamil Nadu, Karnataka, and Andhra Pradesh—all of them from the south—made the largest percentage-point improvements in poverty reduction among the large states between 1993–1994 and 2009–2010. Among the medium-size states, Kerala and Haryana had the lowest poverty rates while Orissa and Jharkhand made the largest percentage-point gains during 1993–1994 to 2009–2010.

It is useful to relate poverty levels to per-capita spending. In Table 8 , we present per-capita expenditures in current rupees in the 17 states in the 3 years for which we have poverty ratios, with the states ranked in descending order of population. Ideally, we should have the MRP expenditures for all 3 years, but since they are available for only the last 2 years, we report the URP expenditures for 1993–1994. Several observations follow from a comparison of Tables 7 and 8 .

MRP = mixed reference period, URP = uniform reference period.

First, high per-capita expenditures are associated with low poverty ratios. Consider, for example, rural poverty in 2009–2010. Kerala, Punjab, and Haryana, in that order, have the highest rural per-capita expenditures. They also have the lowest poverty ratios, in the same order. At the other extreme, Chhattisgarh and Bihar have the lowest rural per-capita expenditures and also the highest rural poverty ratios. More broadly, the top nine states by rural per-capita expenditure are also the top nine states in terms of low poverty ratios. A similar pattern can also be found for urban per-capita expenditures and urban poverty. Once again, Kerala ranks at the top and Bihar at the bottom in terms of each indicator. Figure 3 offers a graphical representation of the relationship in rural and urban India in 2009–2010 using state level data.

Poverty and Per-capita MRP Expenditure in Rural and Urban Areas in Indian States, 2009–2010

One state that stands out in terms of low poverty ratios despite a relatively modest ranking in terms of per-capita expenditure is Tamil Nadu. It ranked eighth in terms of rural per-capita expenditure but fourth in terms of rural poverty in 2009–2010. In terms of urban poverty, it did even better, ranking a close second despite its ninth rank in urban per-capita expenditure. Gujarat also did very well in terms of urban poverty, ranking third in spite of the seventh rank in urban per-capita expenditure.

Finally, there is widespread belief that Kerala achieved the lowest rate of poverty despite its low per-capita income through more effective redistribution. Table 8 entirely repudiates this thesis. In 1993–1994, Kerala already had the lowest rural and urban poverty ratios and enjoyed the second highest rural per-capita expenditure and third highest urban per-capita expenditure among the 17 states. Moreover, in terms of percentage-point reduction in poverty, all other southern states dominate Kerala. For example, between 1993–1994 and 2004–2005, Tamil Nadu achieved a 27.4 percentage-point reduction in poverty compared to just 19.3 for Kerala. We may also add that Kerala experienced very high inequality of expenditures. In 2009–2010, the Gini coefficient associated with spending in the state was by far the highest among all states in rural as well as urban areas.

In this section we decompose population and poverty by social group. As previously mentioned, the expenditure surveys traditionally identified the social group of the households using a three-way classification: scheduled castes, scheduled tribes, and nonscheduled castes. However, beginning with the 1999–2000 survey, the last category had been further subdivided into other backward castes and the rest, the latter sometimes referred to as forward castes, a label that we use in this paper.

We begin by describing the shares of the four social groups in the total population of the 17 states.

A.  Population Distribution by Social Group within the States

Table 9 reports the shares of various social groups in the 17 largest states according to the expenditure survey of 2009–2010. We continue to rank the states according to population from the largest to the smallest.

Source: Authors’ calculations from the NSSO expenditure survey conducted in 2009–2010.

Nationally, the Scheduled Tribes constitute 9% of the total population of India according to the expenditure survey of 2009–2010. In past surveys and the Census 2001, this proportion was 8%. The scheduled castes form 20% of the total population according to the NSSO expenditure surveys, though the Census 2001 placed this proportion at 16%. The OBC are not identified as a separate group in the censuses so that their proportion can be obtained from the NSSO surveys only. The figure has varied from 36% to 42% across the three quinquennial expenditure surveys since the OBC began to be recorded as a separate group.

The scheduled tribes are more unevenly divided across states than the remaining social groups. In so far as these groups had been very poor at independence and happened to be outside the mainstream of the economy, ceteris paribus, states with high proportions of ST population may be at a disadvantage in combating poverty. From this perspective, the four southern states enjoy a clear advantage: Kerala and Tamil Nadu have virtually no tribal populations while Andhra Pradesh and Karnataka have proportionately smaller tribal populations (5% and 9% of the total, respectively) than some of the northern states which had high concentrations.

Among the large states, Madhya Pradesh, Gujarat, and Rajasthan have proportionately the largest concentrations of ST populations. The ST constitute 20%, 17%, and 14% of their respective populations. Some of the medium-size states, of course, have proportionately even larger concentrations. These include Chhattisgarh, Jharkhand, and Orissa with the ST forming 30%, 29%, and 22% of their populations, respectively.

Since the traditional exclusion of the SC has meant they began with a very high incidence of abject poverty and low levels of literacy, states with high proportions of these groups also face an uphill task in combating poverty. Even so, since the SC populations are not physically isolated from the mainstream of the economy, there is greater potential for the benefits of growth reaching them than the ST. This is illustrated, for example, by the emergence of some rupee millionaires among the SC but not the ST during the recent high-growth phase (Dehejia and Panagariya 2012 ).

Once again, at 9%, Kerala has proportionately the smallest SC population among the 17 states listed in Table 9 . Among the largest 10 states, West Bengal, Uttar Pradesh, Bihar, Rajasthan, and Madhya Pradesh have the highest concentrations. Among the medium-size states, Punjab, Haryana, and Orissa in that order have proportionately the largest SC populations.

The SC and ST populations together account for as much as 40% and 35%, respectively, of the total state population in Madhya Pradesh and Rajasthan. At the other extreme, in Kerala, these groups together account for only 10% of the population. These differences mean that, ceteris paribus, Madhya Pradesh, and Rajasthan face a significantly more difficult battle in terms of combating poverty than Kerala.

The ST populations also differ from the SC in that they are far more heavily concentrated in rural areas than in urban areas. Table 10 illustrates this point. In 2009–2010, 89% of the ST population was classified as rural. The corresponding figure was 80% for the SC, 75% for the OBC, and 60% for FC.

An implication of the small ST population in the urban areas in all states and in both rural and urban areas in a large number of states is that the random selection of households results in a relatively small number of ST households being sampled. The problem is especially severe in many of the smallest states where the total sample size is small in the first place. A small sample translates into a large error in the associated estimate of the poverty ratio. We will present the poverty estimates in all states and regions as long as a positive group is sampled. Nevertheless, we caution the reader on the possibility of errors in Table 11 that may be associated with the number of ST households in the 2009–2010 survey.

B.  Poverty by Social Group

We now turn to poverty estimates by social groups. We present statewide poverty ratios based on the Tendulkar line for the ST, SC, and nonscheduled castes in Table 12 . We present the ratios for the OBC and FC in Table 13 . As before, we arrange the states from the largest to the smallest according to population. Separate rural and urban poverty estimates derived from the Tendulkar lines and Lakdawala lines are relegated to the Appendix.

NS = non-scheduled, SC = scheduled castes, ST = scheduled tribes.

FC = forward castes, OBC = other backward castes.

With one exception, Chhattisgarh, the poverty ratio declines for each group in each state between 1993–1994 and 2009–1010. There is little doubt that rising incomes have helped all social groups nearly everywhere. In the vast majority of the states, we also observe acceleration in the decline in poverty between 2004–2005 and 2009–2010 compared to between 1993–94 and 2004–2005. Reassuringly, the decline in ST poverty among scheduled tribes and scheduled castes and SC poverty has sped up recently with the gap in poverty rates between these groups and the nonscheduled castes narrowing.

The negative relationship between poverty ratios and per-capita expenditures that we depicted in Figure 3 can also be observed for the social groups taken separately. Using rural poverty estimates by social group in the Appendix, we show this relationship between SC poverty and per capita rural expenditures in the left panel of Figure 4 and that between the ST poverty and per capita rural expenditures in the right panel. Figure 4 closely resembles Figure 3 . The fit in the right panel is poorer than that in the left panel as well as those in Figure 3 . This is partially because the ST are often outside the mainstream of the economy and therefore less responsive to rising per-capita incomes. This factor is presumably exacerbated by the fact that the number of observations in the case of the ST has been reduced to 11 due to the number of ST households in the sample dropping to below 100 in six of the 17 states.

Scheduled Caste and Scheduled Tribe Poverty Rates and Per-capita MRP Expenditures in Rural Areas, 2009–2010

For years 2004–2005 and 2009–2010, we disaggregate the nonscheduled castes into the OBC and FC. The resulting poverty estimates are provided in Table 13 . Taking the estimates in Tables 12 and 13 , one can see that on average poverty rates are at their highest for the ST followed by SC, OBC, and FC in that order. At the level of individual states, ranking of the poverty rates of scheduled castes and scheduled tribes is not clear-cut, but with rare exceptions, poverty rates of these two groups exceed systematically those of other backward castes, which in turn exceed rates of forward castes.

An interesting feature of the poverty rates of forward castes is their low level in all but a handful of the states. For example, in 2009–2010, the statistic computed to just 3.9% in Punjab, 5.9% in Kerala, 6.5% in Haryana, 6.9% in Tamil Nadu, and 10.5% even in Rajasthan. In 14 out of the largest 17 states, it fell below 25%. The states with low FC poverty rates generally also have low OBC poverty rates making the proportion of the SC and ST population the key determinant of the statewide rate.

This point is best illustrated by a comparison of poverty rates of Punjab and Kerala. Poverty rates for the nonscheduled caste population in 2009–2010 was 7.3% in Punjab and 10.4% in Kerala, while those for scheduled castes stood at 29.2% and 27.4%, respectively, in the two states. But since scheduled castes constitute 39% of the population in Punjab but only 9% in Kerala, statewide poverty rate turned out to be 15.8% in the former and 12% in the latter.

The caste composition also helps explain the differences in poverty rates between Maharashtra and Gujarat on the one hand and Kerala on the other. In 2009–2010, statewide poverty rates were 24.8% and 23.2%, respectively, in the former and 12% in the latter (Table 10 ). In part, the differences follow from the significantly higher per-capita expenditures in Kerala, as seen from Table 11 . 15 But Maharashtra and Gujarat also face a steeper uphill task in combating poverty on account of significantly higher proportions of the scheduled tribe and scheduled caste populations. These groups account for 17% and 11%, respectively, of the total population in Gujarat, and 10% and 15% in Maharashtra. In comparison, only 1% of the population comprises scheduled tribes in Kerala, while just 9% comprise scheduled castes (Table 9 ).

Finally, we turn to poverty estimates by religious group in the states. India is home to many different religious communities including Hindus, Muslims, Christians, Sikhs, Jains, and Zoroastrians. Additionally, tribes follow their own religious practices. Though tribal religions often have some affinity with Hinduism, many are independent in their own right.

Table 14 provides the composition of population by religious group as well as the rural–urban split of each religious group based on the expenditure survey of 2009–2010. Hindus comprise 82% of the population, Muslims 12.8%, Christians 2.3%, Sikhs 1.7%, Jains 0.3%, and Zoroastrians 0.016%. The remaining comprises just 0.3%.

Together, Hindus and Muslims account for almost 95% of India's total population. With 34% of the population in urban areas compared with 26% in the case of Hindus, Muslims are more urbanized than Hindus. Among the other communities, Jains and Zoroastrians are largely an urban phenomenon. Moreover, while Muslims can be found in virtually all parts of India, other smaller minority communities tend to be geographically concentrated. Sikhs cluster principally in Punjab, Christians in Kerala and adjoining southern states, Zoroastrians in Maharashtra and Gujarat, and Jains in Gujarat, Rajasthan, Karnataka, and Tamil Nadu.

Given their small shares in the total population and their geographical concentration, random sampling of households in the expenditure surveys yields less than 100 observations for minority religious communities other than Muslims in the vast majority of the states. Indeed, as Table 15 indicates, only 13 out of the 17 largest states had a sufficiently large number of households even for Muslims to allow poverty to be reliably estimated. Orissa, Haryana, Punjab, and Chhattisgarh each had fewer than 100 Muslim households in the survey. Thus, we attempt poverty estimates by religious groups in the states separately for Hindus and Muslims only. We do provide estimates for the catch-all “other” category but caution that, in many cases, these estimates are based on less than 100 observations and therefore subject to large statistical errors.

As before, we present the estimates for statewide poverty of the religious groups using the Tendulkar line, placing the more detailed estimates for rural and urban areas and estimates based on the Lakdawala lines in the Appendix. Table 15 reports the estimates for Hindus, Muslims, and other minority religion groups for the years 1993–1994, 2004–2005, and 2009–2010.

Religious groups replicate the broad pattern seen in the context of poverty by social group. Poverty has fallen in every single state between 1993–1994 and 2009–2010 for Hindus as well as for Muslims, though the change is not always monotonic. While the level of poverty in 2009–2010 is higher for Muslims than Hindus in the majority of the states, the reverse is true in Bihar, Tamil Nadu, Madhya Pradesh, and Karnataka. An anomaly is the marginal increase in the poverty rate between 2004–2005 and 2009–2010 in Bihar for Hindus and in Gujarat for Muslims. The observation is particularly surprising since we simultaneously observe a significant decline in poverty during the same period for Muslims in Bihar and for Hindus in Gujarat. Interestingly, as documented in the Appendix, poverty rates for both Hindus and Muslims decline in both states based on the Lakdawala lines between 2004–2005 and 2009–2010.

Although the focus of this paper is on poverty, we find it useful to briefly report the evolution of inequality at the state and national levels in rural and urban areas. At the outset, it is important to note that the issue of inequality is complex partly because it can be measured in numerous ways. 16 The potential list of measures is almost endless, and there is no guarantee that these different measures will move in the same direction. Therefore, it is quite easy to show simultaneously that inequality has risen as well as fallen depending on the choice of measure.

In this paper, we use one measure of overall inequality based on the same expenditure survey data we used to report poverty measures in the previous sections: specifically, the Gini coefficient of household expenditures in rural and urban areas in the 17 states and in India as a whole using URP expenditures in 1983, 1993–1994, 1999–2000, 2004–2005, and 2009–2010. Table 17 and Table 18 report the Gini coefficient in rural and urban areas, respectively. As before, we arrange the states in descending order of population size.

Source: Planning Commission website (accessed 4 February 2013).

An immediate observation from Tables 17 and 18 is that, with rare exceptions, rural inequality tends to be lower than urban inequality. At the national level in 2009–2010, the Gini coefficient was 0.291 in rural areas and 0.382 in urban areas. These values reflect a difference of 9 percentage points. This is not surprising. The vast majority of the villagers are small farmers or wage laborers. As a result, variation in their incomes and therefore expenditures are not large. In contrast, cities serve as home to much of the industry and formal sector services as well as to a large informal sector which attracts migrant workers. This results in greater variation in incomes and expenditures.

The tables show no clear trend in the Gini in rural areas but do show a tendency for it to rise in urban areas. At the national level, rural Gini fell between 1983 and 1999–2000, rose between 1999–2000 and 2004–2005, and fell again between 2004–2005 and 2009–2010, with a small net decline over the entire period. In contrast, the urban Gini has climbed steadily.

This is hardly surprising since rapid growth, which can produce increased inequality, is concentrated in urban areas. In the Indian case, a dualism of sorts exists within urban areas. Output growth has been concentrated in the formal sector, while employment has been disproportionately concentrated in the informal sector. Unlike the Republic of Korea and Taipei, China in the 1960s and 1970s and the People's Republic of China more recently, employment in the formal sector has not grown in India due to the poor performance of labor-intensive sectors. Growth in India has been concentrated in skilled labor and capital-intensive sectors.

The data do not support the hypothesis that high levels of poverty reflect high levels of inequality. At least in the Indian case, the two outcomes are at best unrelated and at worst negatively associated. For example, at the national level, rural inequality has remained more or less unchanged and urban inequality has risen, while both rural and urban poverty have steadily and significantly declined over time.

Looking at a cross section of the data, Kerala offers the most dramatic example. In 2009–2010, it had the lowest levels of rural and urban poverty and by far the highest rural and urban Gini coefficients. At the other extreme, Bihar had the second lowest rural Gini coefficient but the highest rural poverty ratio during the same period.

At a more aggregate level, the left panel in Figure 5 plots the rural Gini against the rural poverty ratio, while the right panel plots the urban Gini against the urban poverty ratio. The exponential trend line has a negative slope in each case, though the fit is poor. In other words, there is no evidence of a positive relationship between poverty and inequality, but there is some evidence of a negative relationship.

Gini Coefficients and Poverty Ratios in Rural and Urban Areas in Indian States, 2009–2010

In this paper, we have provided a comprehensive analysis of poverty in India along six different dimensions: across time, across states, between rural and urban areas, across social and religious groups, and based on two different poverty lines (Lakdawala and Tendulkar). To keep the exposition manageable, we have concentrated on estimates based on the Tendulkar line except when we discuss poverty at the national level. In the latter case, we report estimates in rural and urban India derived from both the Lakdawala and Tendulkar lines. Our detailed estimates by social and religious groups, by rural and urban areas, and by state based on both the Lakdawala and Tendulkar lines are provided in the Appendix.

The following are some of the key conclusions of the paper. First, poverty has declined between 1993–1994 and 2009–2010 along every dimension. Indeed, poverty has fallen for every social and religious group in every state and in rural and urban areas, separately as well as jointly. Estimates based on the Lakdawala line show that the decline can be observed steadily since 1983 for all social and religious groups in all 17 large states.

Second, acceleration in growth rates between 2004–2005 and 2009–2010 has been accompanied by acceleration in poverty reduction. Poverty rates have fallen rapidly for all major social and religious groups at the national level. This phenomenon also holds true for most states across various social and religious groups.

Third, for the first time, poverty reduction between 2004–2005 and 2009–2010 has been larger for the scheduled castes and scheduled tribes than the upper caste groups. Thus, the gap in poverty rates between the socially disadvantaged and upper caste groups has narrowed over time. This pattern provides clear evidence to refute the claim that reforms and growth have failed to help the socially disadvantaged or that they are leaving these groups behind. A continuation of this trend, bolstered by further reforms and higher growth rates, would help eliminate the difference in poverty rates between the historically disadvantaged and the privileged.

Fourth, interstate comparisons reveal that the states with large scheduled castes and scheduled tribe populations face a steeper climb in combating poverty. The point is most forcefully brought out by a comparison of Punjab and Kerala. When we compare poverty rates in 2009–2010 by social group, the two states have very similar poverty rates. But because the poverty rates for the scheduled castes are higher than those for the nonscheduled castes in both states and the scheduled castes account for a much larger proportion of the population, the aggregate poverty rate in Punjab turns out to be significantly higher.

Finally, we find that in the case of India, there is no robust relationship between inequality and poverty. Indeed, to the extent that such a relationship exists, this would suggest that more unequal states enjoy lower levels of poverty. Kerala offers the most dramatic example. It has had one of the highest Gini coefficients for rural as well as urban areas and also one of the lowest poverty ratios for both regions. In 2009–2010, its Gini coefficients were by far the highest among the large states in both rural and urban areas, while its poverty ratios were the smallest.

Given space limitations, we have deliberately limited ourselves to providing one specific indicator of poverty—the headcount ratio—in different states and for different social and religious groups based on the two official poverty lines. There are at least two broad complementary directions in which the work in this paper can be extended.

First, it may be desirable for certain purposes to estimate alternative indicators of poverty such as the poverty gap or its close cousin, the Foster-Greer-Thorbecke index. Such an index allows one to gauge the resources needed to bring all those below the poverty line to a level above it. In a similar vein, we have focused on progress in combating poverty among social and religious groups that are more vulnerable. Alternatively, we could focus on a different dimension of vulnerability such as male-headed versus female-headed households and evaluate the progress in combating poverty among female-headed households.

The second direction in which the work of this paper could be extended is towards explaining the determinants of poverty. Within this broad category, we have left many questions unanswered. For instance, it would be useful to separate the contributions of growth and redistribution policies in explaining the decline in poverty. Likewise, we may want to know what role, if any, rural-to-urban migration may have played—directly as well as through remittances. Similarly, we might ask what role the division of population among various social and religious groups plays in determining the progress in combating poverty. Finally, we might also wish to study the role that education plays in bringing down poverty. The recent work by Hnatkovska and Lahiri ( 2012 ) shows that education has indeed been pivotal in bridging the wage gap between scheduled castes and scheduled tribes on the one hand and nonscheduled castes on the other. This suggests an important role for education in eradicating poverty.

a Calculated by adjusting the 2004–2005 lines using the index implicit in the official Tendulkar lines for 2004–2005 and 2009–2010.

Source: Planning Commission, Government of India, Data Tables.

SC = scheduled castes, ST = scheduled tribes, URP = uniform reference period.

a Delhi is 95% urban. The SC and ST estimates in this case are based on too few households and therefore subject to substantial sampling errors.

FC = forward castes, NC = nonscheduled castes, OBC = other backward castes.

a Only 5% of Delhi by population is rural. SC and ST estimates in this case are based on too few households and therefore subject to substantial sampling errors.

FC = forward castes, NS = nonscheduled castes, OBC = other backward castes, URP = uniform reference period.

MRP = mixed reference period, SC = scheduled castes, ST = scheduled tribes.

Source: Authors’ calculations

FC = forward castes, MRP = mixed reference period, NS = nonscheduled castes, OBC = other backward castes.

URP = uniform reference period.

MRP = mixed reference period.

The views expressed in the paper are those of the authors and not of the World Bank. We thank an anonymous referee, P. V. Srinivasan, and participants of the first 2013 Asian Development Review conference held on 25–26 March 2013 at the Asian Development Bank headquarters in Manila, Philippines.

Prices could vary not just between urban and rural regions within a state but also across subregions within rural and subregions within urban regions of a state. Therefore, in principle, we could envision many different poverty lines within rural and within urban regions in each state. To keep the analysis manageable, we do not make such finer distinctions in the paper.

We do not go into the sources of underestimation of expenditures in NSSO surveys. These are analyzed in detail in Government of India ( 2008 ). According to the report (Government of India 2008 , p. 56), “The NSS estimates suffer from difference in coverage, underreporting, recall lapse in case of nonfood items or for the items which are less frequently consumed and increase in nonresponse particularly from affluent section of population. It is suspected that the household expenditure on durables is not fully captured in the NSS estimates, as the expensive durables are purchased more by the relatively affluent households, which do not respond accurately to the NSS surveys.” Two items, imputed rentals of owner-occupied dwellings and financial intermediation services indirectly measured, which are included in the NAS estimate, are incorporated into the NSSO expenditure surveys. But these account for only 7–9 percentage points of the discrepancy.

This section is partially based on Panagariya ( 2011 ).

See, for example, the report by the NDTV entitled “Planning Commission further lowers poverty line to Rs28 per day.” Available: http://www.ndtv.com/article/india/planning-commission-further-lowers-poverty-line-to-rs-28-per-day-187729

For instance, one commentator argued in a heated television debate that since bananas in Jor Bagh (an upmarket part of Delhi) cost Rs60 a dozen, an individual could barely afford two bananas per meal per day at poverty line expenditure of Rs32 per person per day.

We thank Rahul Ahluwalia for supplying us with Table 1 . The expenditures in the table represent the average of the urban decile class including the urban poverty line. Since the urban poverty line is at 25.7% of the population, the table takes the average over those between the 20th and 30th percentile of the urban population.

The consumption figures for the top 30% of the population are from Ganesh-Kumar et al. ( 2012 ).

These amounts of cereal and pulses equal or exceed their mean consumption levels according to the 2004–2005 NSSO expenditure survey.

Recently, Panagariya ( 2013 ) has suggested that if political pressures necessitate shifting up the poverty line, the government should opt for two poverty lines in India—the Tendulkar line, which allows it to track those in extreme poverty, and a higher one that is politically more acceptable in view of the rising aspirations of the people.

The issue is discussed at length in Bhagwati and Panagariya ( 2013 ).

Although Delhi has its own elected legislature and chief minister, it remains a union territory. For example, central home ministry has the effective control of the Delhi police through the lieutenant governor who is the de jure head of the Delhi government and appointed by the Government of India.

Our absolute totals for rural and urban areas of the states and India in Table 6 match those in Tables 1A-R and 1A-U, respectively, in Government of India ( 2011b ).

The Planning Commission derives the absolute number of poor from poverty ratios using census-based population projections. Therefore, the population figure underlying the absolute number of poor estimated by the Planning Commission are higher than those in Table 6 , which are based on the expenditure survey of 2009–2010.

This distinction is a substantive one in the case of states in which the censuses reveal the degree of urbanization to be very different from that underlying the design of the expenditure surveys. For example, the expenditure survey of 2009–2010 places the urban population in Kerala at 26% of the total in 2009–2010, but the census in 2011 finds the rate of urbanization in the state to be 47.7%.

This is true in spite of significantly higher per-capita GSDP in Maharashtra presumably due to large remittances flowing into Kerala. According to the Government of India ( 2011a ), one in every three households in both rural and urban Kerala reports at least one member of the household living abroad.

For instance, inequality could be measured as the ratio of the top 10% to bottom 10% of the population, the ratio of rural to urban per-capita incomes, the ratio of skilled to unskilled wages (or formal and informal sector wages), and through the Gini coefficient (nationally or across states).

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Poverty, Illiteracy, and Unemployment in India: Challenges and Progress

How it works

India’s rapid expansion and exponential growth prospects are facing major deep-rooted problems of poverty, inequality, and illiteracy. These are acting as hurdles in achieving its economic and social goals.

• 1 The History:
• 2 The Present:
• 3 Allocating the resources on a priority basis:
• 4 Working in synergy:
• 5 Promote education and financial literacy:
• 6 Escaping the poverty trap:

The History:

The roots of this can be traced back to British India in the near history, to the Indian kingdoms and princely states. Where there was a feeling of being superior to others creates inequality. With the end of British rule, though India gained its Independence, the aftermath was not that great; we had a country that had been dominated over its natural resources and labor.

India, which was once known as the golden sparrow after its independence, didn’t even have enough to feed its population.

The Present:

There has been an exponential improvement in the economic condition, and the major issues have been acknowledged and worked upon. The government has also managed to tackle these issues to an extent with the introduction of new policies and economic reforms, but considering the size of the population, just doing that much is not enough. Is it even possible to eradicate these issues?

A society only prospers when people become responsible and selfless. There is a linkage between the three factors that is poverty, inequality, and illiteracy. In a poor society, education is not prioritized due to the scarcity of available resources and the absence of facilities and incentives, which in turn causes illiteracy. This further affects an individual’s ability to make money, keeping him trapped in poverty, and this further creates inequality in the process. There is an interdependence between these three factors. Improvement and development in any of these could result in an overall improved picture as they have a snowball effect on one other.

Here are a few pointers that should be considered; these would help in getting to an ideal scenario where there is the minimum saddle and maximum growth and prosperity; they can be considered as follows,

Allocating the resources on a priority basis:

Due to the limitation of the available resources, the government has to find and allocate resources to the issues which are a priority. For instance, there exists extreme poverty, which is lethal. The government needs to intervene in these areas and put in place policies and schemes to ensure access to the basic essentials of life.

Working in synergy:

For India to achieve its true growth potential and achieve extensive growth, it has to consider the tradeoff between growth and reducing inequality and poverty. This cannot be achieved singlehandedly by the government or by an individual but has to be achieved in a synergy.

Promote education and financial literacy:

The one thing that has been observed in the government’s schemes is that they are only focused on the production side of things: the skilled India initiative, the upskilling platform, and many others; they, in turn, need to also focus on the saving side of things as their spending habits that indirectly affect the financial position

Escaping the poverty trap:

There are three major factors that keep a person from escaping poverty. This includes the absence of basic healthcare, no access to clean water, healthy food, and no access to education. These are the factors that are crucial to resolve, thus breaking the trap of escaping poverty, becoming literate, and achieving equality.

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Essay on Unemployment in India: Look at the Most Essential Topic of India for UPSC

Unemployment in India is proving to be the worst state for the country. It is defined under many classifications but the impact of it is that it is leading the country towards lower GDP and low living standards. Unemployment is the state of actively seeking work but not finding any paid function. Rich people in India continue to grow towards richness and the poor turn out to be poorer. All these miserable situations must be placed in your mind along with the facts and statistics. This state is making the country regressive for the people who do not have money. Are you an aspirant searching for significant topics for the UPSC exam? If you are looking for an upsc essay, you have come to the right place because here is the essay on unemployment in India. Go through this article precisely and grab all the points.

Also Read: Permanent Court of Arbitration: Important Notes for UPSC Exam

Essay on Unemployment in India

Unemployment is defined as the health of the economy of a country. It is a scenario when someone actively searches for work but does not get any paid job . The rate of unemployment in a country is measured by a certain formulation. The formula is: Unemployment rate = (Unemployed Workers / Total labour force) × 100. A national sample survey organization has been set up for calculating such situations in a country. This organization comes under MoSPI. MoSPI is abbreviated as Ministry of Statistics and Programme Implementation. It calculates the unemployment rate in India under three major approaches. These approaches are written below.

#1. Daily Status Approach

The unemployment rate of the citizens of a country is determined by this process. The unemployment status of a person is measured for each day but in a reference of a week. This is done by noticing that if any person is having no gainful work even for one hour in a day, then the person will be described as unemployed for that day.

#2. Weekly Status Approach

This approach is used effectively for measuring the unemployment rate of a nation. This approach works for highlighting the record of few people who did not have gainful or paid work even for an hour of a day. This is also valid for the unemployed people for an hour on any day of the week. This proceeds the date of the survey. A single day in the entire week is determined by this approach.

#3. Usual Status Approach

This is the most common form of reporting the number of unemployed people in a country. The approach tests the estimates of those individuals who had no gainful work or were unemployed for a major time during the whole year i.e. 365 days. It is calculated for the whole year.

Also Read: Pneumococcal Conjugate Vaccine: A Very Important Healthcare Topic for UPSC

Causes of Unemployment

Many causes are leading to the increment in the unemployment rates in India. The causes include the given points.

#1. Overpopulation is the most important cause of unemployment.

#2. Lack of education is also contributing largely to the unemployment rates. The status of ineffective educational structures,  no or low educational levels along with lesser vocational skills of the working population is a major cause.

#3. Bad quality infrastructure and inadequate growth of industries are a  cause along with very few investment rates in the sectors of manufacturing.

Also Read: Recusal of Judges: A Potential Topic for The Next UPSC Exam

Have a Look at Other Major Causes!

#1. Lower concentration towards the agriculture sector causing greater unemployment and low investment in modern agricultural technologies.

#2. The other cause is the division of the larger workforce. The workforce is working for informal functioning due to lack of education and henceforth employment measurements are less. For example, construction workers, domestic helpers, etc.

#3. The most influential cause is the regressive state of women in the country. The subservient and orthodox social norms are deteriorating women from continuing employment.

Unemployment in India Essay

The facts say that India’s unemployment rate in February 2021 was 6.9 percent. It is still very down but has turned out to be better than before considering its downfall from 7.8 percent in February 2020 . It indicates that the country is returning to the pre COVID levels in terms of unemployment. The experts from the economic department say that the labour workforce was depressed even before the outbreak of the pandemic and the situation during COVID has made it worse. The Center for Monitoring Indian Economy has claimed that participation from the labour force and employment rates have remained low. This is the data that is indicating labour fallout from labour markets due to lack of jobs.

Also Read: New IT Rules 2021: Facts to Know for UPSC about New Provisions, Patterns & Rules

People Losing Jobs!

The unemployment rate in India is touching heights because of people losing jobs. The people who had jobs are losing them due to lesser market evolution and functioning. In the metropolitan areas, people are degrading financially and losing jobs. CMIE recently claimed that the unemployment rate is dramatically rising. The post-lockdown era is marked by a noticeable drop of 2.5 percent in employment along with a drop of 6.2 percent in the count of unemployment

There has been a reduction of 2.8 percent in the labour force as well.

Types of Unemployment in India

There are different kinds of unemployment traced in India. Disguised unemployment refers to the state when more than the expected number of people are unemployed which is majorly seen in unorganized sectors and agriculture. Seasonal unemployment is a state of a person being seasonally unemployed. Structural unemployment is a factor that arises due to a lack of requisite skills for a certain organization. It is a mismatch between the individual and industry. Cyclical unemployment is something that arises due to recessions or declines in the economic conditions of the country. Vulnerable unemployment is a state where people are working without a definite income and job contact. Technological unemployment is something that occurs due to a lack of technology. It was stated by the World Bank in 2016 that 69% of jobs are threatened under this case.

Also Read: What is Mission Indradhanush: A Potential UPSC Topic Related to Covid-19 Vaccine

Impact of Unemployment

The impact of unemployment is detrimental to the people. It leads to the generation and growth of poverty. It also increases the crime rates of the nation because the young mind finds some illegal and unlawful things to do when they do not get a potential job. The people become enticed by antisocial elements and start losing faith in the democracy of India. Unemployed people who indulge in drugs and commit suicides that are a loss of resources to the nation. It is a way of decreasing and degrading the economy of the country and pushing it towards devastation.

You must keenly know this UPSC essay to upgrade your learning capabilities regarding the current issues of society.

Initiatives by the Government of India

There are many initiatives taken by the government of India for the betterment of people and giving them employment. The initiative for the rural people was taken in 1980 as Integrated Rural Development Programme (IRDP). In 1979, one scheme was launched that was primarily concerned with self-employment and SC/ST people. It was named Training of Rural Youth for Self-Employment (TRYSEM). It gave employment to youth ranging from the age of 18 to 35. RSETI/RUDSETI was launched by the government to minimize the issues of unemployment. The other schemes include PMKVY, Pradhan Mantri Kaushal Vikas Yojana which was launched in 2015 to enable the youth towards learning industry skills and getting a potential job.

Schemes Launched by the Government

The most known scheme is MNREGA which stands for Mahatma Gandhi National Rural Employment Guarantee Act. It came in 2005 for giving the right to work to all the citizens. The main aim of this scheme was to provide social security to the people for 100 days of paid work. It gave employment to many people across the nation. Start-Up India scheme and Stand Up India scheme came out in 2016 to uplift the people by developing an entrepreneurship environment for them and giving loan benefits to the SC/ST people and women respectively. The government has been making tremendous efforts to give employment to the youth and to turn the country into a larger economy and development.

Also Read: Addu Atoll UPSC Topic: Why is Addu Atoll Trending All Over India?

We hope that we have covered the essential points in this article. You must be aware of the problems faced by the country and should work appropriately to modify or upgrade the conditions. You must not read the articles for learning but you must enlighten your soul about the situations popping up before the citizens of the country.

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Shilpa is a professional web content writer and is in deep love with travelling. She completed her mass communication degree and is now dedicatedly playing with words to guide her readers to get the best for themselves. Developing educational content for UPSC, IELTS aspirants from breakthrough research work is her forte. Strongly driven by her zodiac sign Sagittarius, Shilpa loves to live her life on her own notes and completely agrees with the idea of ‘live and let live. Apart from writing and travelling, most of the time she can be seen in the avatar of 'hooman' mom to her pets and street dogs or else you can also catch her wearing the toque blanche and creating magic in the kitchen on weekends.

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POVERTY, EMPLOYMENT AND UNEMPLOYMENT SCENARIO IN INDIA

2017, isara solutions

India once called “Sone Ki Chidia” (the golden bird) is now one of the poorest countries of the world. Even after its impressive performance in the field of science and technology and agriculture during last three four decades a vast majority of Indian people is struggling with problems of poverty and under nutrition.

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The female work force participation rate of a country indicates the economic empowerment of women in the society. It is also significant for poverty reduction and enhancing their social status. In India, women constitute almost one half of the population, but only less than one‐third of total workforce. It is evident that women employment is being under enumerated and the major reason for the undercounting of women workers and under valuation of their contribution to the economy is the ‘invisibility’ of their work as well as a narrow definition of the term ‘economic activity’.A lack of information on the nature of unemployment among women has significant implications.Data inadequacies led to misconceptions about women's work roles and their employment needs. It can have serious repercussions on the effectiveness of economic resources allocated to women development schemes. Forexample,employment projects for the poor women would be misdirected ormisinformation about the availability of women for employment may lead totheir non-recruitment.

isara solutions

Urbanisation is attributed to the “Mobility Revolution”. Following this, 2011 Census reveals that the level of urbanization in the country as a whole increased from 27.7% in 2001 to 31.1% in 2011. As per 2011 census, the process of urbanization is registered a high record in the three largest cities of India, Delhi , Mumbai and Chennai. Migration helps in growing the urban informal sector assists in the process of urbanization. New industries, construction works and other opportunities of work in urban areas in the cities stimulate the shift of labour from rural to urban areas in the metropolitan cities like Delhi. The paper emphasis on the relationship between urbanization, migration and informal sector, as urbanization causes a lot of migration in the informal sector in the metropolitan cities like Delhi, caused by the factors such as easy entry, skilled and unskilled strata get the employment opportunities especially the lower strata of the society and much more benefits provide by this sector that sustain the metropolitan cities as an attractive destination for migration. The focus of the paper is to examine the key factors that influence work participation of migrants in the informal sector in Delhi and also tries to explore whether the migrants assist through the process of urbanization in breaking the spatial (Rural-Urban) and social (Caste, Gender, Ethnic, & Religion) barriers of interaction among the workers in the Informal Sector.

The study has suggested a multi-sectoral integrated strategy of promoting agricultural and non-agricultural activities in the rural areas embedded in the local conditions, resources and institutions to meet the challenge of sustainable development in the state.in this study we have tried to examine in depth of economy of the state to find some major and minor economic problem. There is cast based system, inequality, poverty, unemployment, lack of quality education system, and banking problem. Politically motivated administrative system is not working positively and not using their power to reduce inequality, poverty, and unemployment from the society.

Agriculture is the backbone of Indian Economy and important way for the survival of Farmers, while near about 70% persons is surviving with the agriculture activities. The income from the agriculture is not enough for survival and a number of farmers are bound to suicide in a number of regions in the country. Less income as well as traditional ways and techniques along with the less support from Government are responsible for this situation of farmers. One of the major problem is also connected with same issue that the farmers are not having proper means of disposing off the residues from crops. The legislature have enacted general laws for the protection of environment and these laws are also known sectorial laws also. The effect of these laws are common for all kind of acts prohibited under environmental laws. Hence the farmers are under the purview of these laws and punishments, even getting nothing as reward or monitory benefits while practicing burning of crop residue.

Urban poverty is a major challenge before the urban managers and administrators of the present time. Though the anti-poverty strategy comprising of a wide range of poverty alleviation and employment generating programmes has been implemented but results show that the situation is grim Importantly, poverty in urban India gets exacerbated by substantial rate of population growth, high rate of migration from the rural areas and mushrooming of slum pockets. Migration alone accounts for about 40 per cent of the growth in urban population, converting the rural poverty into urban one.

India is one among the countries which have least proportion of female labour force participation rate in the world. Even after having the half of the share in the total population, the share of females in the labour force is very meager in number as compared with other countries. This indicts the economic transition and development does not bring the women together (Oxfam, 2019). Vast majority of the literature are of the opinion that there was continuous fall the labour force participation rate for females since 1993. When the economy was taken shape towards next phase of development after the adoption of new economic reforms in early 1990s. There was drastic growth in the opportunities in the economy especially in service sector since the concept of liberalization, globalization and privatization was centre theme of the Indian economy. This in turn shifted the some of the labour force from agriculture to towards manufacturing and services sector. The skilled and semi-skilled labour forces were got opportunities in manufacturing sector. There was huge expansion in the manufacturing sector after reforms. Similarly the services sector, the major contributor to the Indian economy was biggest source of employment opportunities during the post reforms period. It is true that there was a huge expansion at large scale in the economy after the new economic reforms.

The article discusses how HIV/AIDS is emerging as a human security threat. It analyses how it affects the humanitarian dimensions of security and associates itself with various sectors of human security. The purpose of this article is to determine that how the rampant spread of disease is emerging as a direct and indirect threat to the life and dignity of a human being. The article also draws attention to certain factors such as ignorance, poverty and social stigma that plays a major role in the increment of rate of HIV/AIDS in India as well as it discusses the preventive measures that have been undertaken by the Government to India to curb the epidemic

Bilaspur is one among the low hill districts of Himachal Pradesh. It saw many mass migration activities due to submergence large scale agriculturally rich plates of Seer, Sukar, Ali, Saryali Khads and basins of Satluj River in the event of construction of Bhakhra Dam. The construction of Associate Cement Company's Cement Production unit at Gagal (Barmana), construction of variety of roads ranging from District to National Level Highways, further, aggravated the situation. lack of employment opportunities, loss of agriculture land due to submergence of major fertile valleys of the district in Bhakhra Reservoir, low agricultural productivity due to non-availability of irrigational facilities, ownership of small land holdings and poor infrastructural facilities till date is forcing the people of the district to stay away from their homes (place of origin) to earn their livelihood (place of destination). Present paper is an attempt to find out the relationships of prevailing employment and agricultural productivity with migration. The study was a primary study and data was collected from 188 Migrant Household Respondents. Only two blocks out of three were selected randomly. Data was analyzed through simple statistical tools. The paper is subdivided in to three parts, first part represents the overall category wise migration characteristics of migrant families, and second part is a concerned with the category wise description of relationship of migration and employment whereas the third and last part is an attempt to find out the relationship of migration with that of the agricultural productivity. Migration is a form of geographical or spatial mobility between one geographical unit and another, generally involving a change in residence from the place of origin or place of departure to the place of destination or arrival. The importance of study of population in the economic field is immense. It is with the help of population studies that the nation came to know how far rate of population growth is keeping pace with that of economic development, and in case both are not keeping pace with each other, how to adjust these so that economic problems do not seriously threat the nation, as a whole and economic growth, in particular. It is quite well known that the population growth and economic standard of the people keep pace with each other.

This paper analyzes the determinants of rural poverty in India, contrasting the situation of scheduled tribe (ST) households with the non‐scheduled population. The incidence of poverty in ST households is much higher than among non‐scheduled households. The writer focus that poverty in rural and urban areas in the country was jointly 37.7% in 2004-05 which has jointly reduced the poverty of rural and urban areas to 22.0% in 2011-12. It is find that 60% of Tribal population lives below poverty line in India in 2004-05 which was declined at 43% in 2011-12. This paper represent that in 2011-12 in rural areas 45.3% of scheduled tribe population was living below the poverty line in 3% and urban areas in India.

Why lose all these abilities because of a belief that „a woman‟s place is in the home‟. For some it is, for others, not” “If (Women) are capable …. I do not see why they should give up their position to man…..The old theory that a woman‟s place is in the home no longer exists. Those days are gone for-ever

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Home » Economy » Poverty and unemployment » Poverty

• Poverty is the state of one who lacks a usual or socially acceptable amount of money or material possessions.
• In this context, the identification of poor people first requires a determination of what constitutes basic needs
• These may be defined as narrowly as “those necessary for survival” or as broadly as “those reflecting the prevailing standard of living in the community.”
• On the basis of social, economic and Political aspects, Poverty can be classified as follows:

Absolute poverty

• Those who belong to absolute poverty tend to struggle to live and experience a lot of child deaths from preventable diseases
• Absolute Poverty is usually uncommon in developed countries .
• This number is controversial; therefore each nation has its own threshold for absolute poverty line.

Relative Poverty

• It is defined from the social perspective, that is living standard compared to the economic standards of population living in surroundings. Hence it is a measure of income inequality
• Usually, relative poverty is measured as the percentage of the population with income less than some fixed proportion of median income
• It is a widely used measure to ascertain poverty rates in wealthy developed nations.

Situational Poverty

• It is a temporary type of poverty based on occurrence of an adverse event like environmental disaster, job loss and severe health problem
• People can help themselves even with a small assistance, as the poverty comes because of unfortunate event

Generational Poverty

• It is handed over to individual and families from one generation to the one.
• This is more complicated, as there is no escape because the people are trapped in its cause and are unable to access the tools required to get out of it

Rural Poverty

• This occurs in rural areas, where there are less job opportunities, less access to services, less support for disabilities and quality education opportunities
• People here tend to live mostly on farming and other menial work available in the surroundings.

Urban Poverty

• The major challenges faced by the Urban people, because of Poverty include:
• Limited access to health and education
• Inadequate housing and services
• Violent and unhealthy environment because of overcrowding
• Little or no social protection mechanism.
• There was lack of food, of clothing, of housing and of every other essential requirement of human existence.
• At the time of Independence the incidence of poverty in India was about 80% or about 250 million
• In 1956-57, India’s poverty rates was computed to be 65%(215 million people)

Various expert groups constituted by the Planning Commission have estimated the number of people living in poverty in India

Working Group (1962)

• The poverty line in India was quantified for the first time in 1962, by this Group in terms of a minimum requirement (food and non-food) of individuals for healthy living
• The Group formulated separate poverty lines for rural and urban areas (₹20 and ₹25 per capita per month respectively in terms of 1960-61 prices) without any regional variation
• The poverty line excluded expenditure on health and education, both of which, were to be provided by the State

Study by VM Dandekar and N Rath (1971)

• Although this was not a study commissioned by the Planning Commission, the origins of India’s poverty line lie in the seminal work of these two economists
• They first established the consumption levels required to meet a minimum calorie norm,  of 2,250 calories per capita per day
• Unlike previous scholars who had considered subsistence living or basic minimum needs criteria as the measure of poverty line, they derived poverty line from the expenditure adequate to provide 2250 calories per day in both rural and urban areas
• They found poverty lines to be Rs. 15 per capita per month for rural households and Rs. 22.5 per capita per month for urban households at 1960‐61 prices

Task Force on “Projections of Minimum Needs and Effective Consumption Demand” headed by Dr. Y. K. Alagh (1979)

• Official poverty counts began for the first time in India based on the approach of this Task Force
• Poverty line was defined as the per capita consumption expenditure level to meet average per capita daily calorie requirement of 2400 kcal per capita per day in rural areas and 2100 kcal per capita per day in urban areas
• Based on 1973-74 prices, the Task Force set the rural and urban poverty lines at 49.09 and Rs.56.64 per capita per month at 1973-74 prices.

Lakdawala Expert Group (1993)

• It did not redefine the poverty line and retained the separate rural and urban poverty lines recommended by the Alagh Committee at the national level based on minimum nutritional requirements.
• However, it disaggregated them into state-specific poverty lines in order to reflect the inter-state price differentials
• Over the years, this method lost credibility. The price data were flawed and successive poverty lines failed to preserve the original calorie norms

Tendulkar Expert Group (2009)

• It recommended a shift away from basing the poverty lines from calorie norms used in all poverty estimations since 1979 and towards target nutritional outcomes instead
• Instead of two separate poverty line baskets (PLBs) for rural and urban poverty lines, it recommended a uniform all-India urban PLB across rural and urban India.
• It recommended using Mixed Reference Period (MRP) based estimates, as opposed to Uniform Reference Period (URP) based estimates used in earlier methods for estimating poverty.
• It recommended incorporation of private expenditure on health and education while estimating poverty.
• It validated the poverty lines by checking the adequacy of actual private consumption expenditure per capita near the poverty line on food, education and health by comparing them with normative expenditures consistent with nutritional, educational and health outcomes respectively.
• Instead of monthly household consumption, consumption expenditure was broken up into per person per day consumption, resulting in the figure of Rs 32 and Rs 26 a day for urban and rural areas.
• As a result, the national poverty line for 2011-12 was estimated at Rs. 816 per capita per month for rural areas and Rs. 1,000 per capita per month for urban areas

Rangrajan Committee (2014)

• Due to widespread criticism of Tendulkar Committee approach as well as due to changing times and aspirations of people of India, Rangarajan Committee was set up in 2012
• It reverted to the practice of having separate all-India rural and urban poverty line baskets and deriving state-level rural and urban estimates from these.
• It recommended separate consumption baskets for rural and urban areas which include food items that ensure recommended calorie, protein & fat intake and non-food items like clothing, education, health, housing and transport.
• This committee raised the daily per capita expenditure to Rs 47 for urban and Rs 32 for rural from Rs 32 and Rs 26 respectively at 2011-12 prices
• Monthly per capita consumption expenditure of Rs. 972 in rural areas and Rs. 1407 in urban areas is recommended as the poverty line at the all India level
• However, The government did not take a call on the report of the Rangarajan Committee
• Since the early 1950s, the government of India has initiated, sustained, and refined various planning schemes to help the poor attain self-sufficiency in acquisition of food and overcome hunger and poverty
• All the Five year plans introduced in India, had elements in them to reduce Poverty; of which the following Five year plans(FYP) had explicit provisions in them aimed at Poverty alleviation:

Fifth Plan (1974–1978)

• It laid stress on employment, poverty alleviation (Garibi Hatao) , and justice
• It also assured a minimum income of Rs. 40 per person per month calculated at 1972-73 prices

Seventh Plan (1985–1990)

• The thrust areas of the Seventh Five-Year Plan were: social justice, removal of oppression of the weak, using modern technology, agricultural development, anti-poverty programmes , full supply of food, clothing, and shelter, increasing productivity of small- and large-scale farmers, and making India an independent economy
• From perspective of Poverty, it aimed at improving the living standards of the poor with a significant reduction in the incidence of poverty.

Eighth Plan (1992–1997)

• The major objectives included, controlling population growth, poverty reduction, employment generation, etc.

Ninth Plan (1997–2002)

• It offered strong support to the social spheres of the country in an effort to achieve the complete elimination of poverty

Tenth Plan (2002–2007)

• One of the main objectives of the plan, was Reduction of poverty rate by 5% by 2007

Eleventh Plan (2007–2012)

• It aimed at Rapid and Inclusive growth(Poverty reduction)

Twelfth Plan (2012–2017)

• The government intended to reduce poverty by 10% during the tenure of the plan

The major Poverty Alleviation Programmes in India since Independence are as follows:

India embarked on economic reforms 1991 – the positive impacts of which, on poverty are as follows:

• Their study shows that among other things, urban growth is the most important contributor to the rapid reduction in poverty even though rural areas showed growth in the post-reform period
• The official estimates based on Tendulkar committee’s poverty lines shows that poverty declined only 0.74 percentage points per annum during 1993-94 to 2004-05
• But poverty declined by 2.2 percentage points per annum during 2004-05 to 2011-12. Around 138 million people were lifted above the poverty line during this period
• This indicates the success of reforms in reducing poverty
• The Rangarajan committee report also showed faster reduction in poverty during 2009-10 to 2011-12
• Consequentially, Higher economic growth, agriculture growth, rural non-farm employment, increase in real wages for rural labourers, employment in construction and programmes like the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) contributed to higher poverty reduction in the 2000s compared to the 1990s.

Other negative impacts of LPG relating to poverty, that need to be accounted for, are as follows:

• Poverty declined faster but inequality increased in the post-reform period
• India still has 300 million people below the poverty line
• There was a significant rise in the Gini coefficient for urban areas from 0.34 to 0.39 during the same period

Heavy pressure of population

• India’s population was 84.63 crores in 1991 and became 102.87 crores in 2001
• Rapid population growth causes excessive sub-division and fragmentation of holdings. As a result, per capita availability of land has greatly declined and households do not have access to sufficient land to produce enough output and income for them.
• Rapid growth in population in India since 1951 has caused lower growth in per capita income causing lower living standards of the people

Unemployment and under employment

• Due to continuous rise in population, there is chronic unemployment and under employment in India.
• There is educated unemployment and disguised unemployment , and Poverty is just a reflection of this aspect

Lack of Inclusive Economic Growth

• The first important reason for mass poverty prevailing in India is lack of adequate economic growth in India
• industrial growth did not generate much employment opportunities
• Growth strategy mainly benefitted the rich , than aiding the poor
• Capital intensive and labour-displacing technology was adopted in the growing industries. As a result, unemployment and underemployment increased
• Besides, due to the increase in income inequalities during this period, rise in average per capita income could not bring about significant rise in per capita income of the weaker sections of the society
• Further , trickledown effect of overall economic growth was operating only to a small extent

Sluggish Agricultural Performance and Poverty

• The experience of Punjab and Haryana shows that, the agricultural growth through use of new high yielding technology (during Green revolution), poverty ratio can be significantly reduced
• However, in various states of the country such as Orissa, Bihar, Madhya Pradesh, Assam, East Uttar Pradesh, where poverty ratio is still very high; new high-yielding technology has not been adopted on a significant scale and as a result agricultural performance has not been good. As a result, poverty prevails to a larger extent in them.
• As a result, irrigation facilities whose availability ensures adoption of new high-yielding technology and leads to higher productivity, income and employment, are available in not more than 33 per cent of cultivable land
• As a result, many parts of the country remain semi-arid and rain-fed areas, where agricultural productivity, income and employment are not sufficient to ensure significant reduction in poverty

Non-implementation of Land Reforms

• Access to adequate land, a productive asset, is necessary for fuller employment of members of an agricultural household
• They also are unable to find employment throughout the year. As a result, they remain unemployed and under-employed for a large number of days in a year

Inflation and Food Prices

• Inflation, especially rise in food prices, raises the cost of minimum consumption expenditure required to meet the basic needs. Thus, inflation pushes down many households below the poverty line

As assessment of Poverty Alleviation programmes , state three major areas of concern which prevent their successful implementation

• Due to unequal distribution of land and other assets, the benefits from direct poverty alleviation programmes have been appropriated by the non-poor
• Compared to the magnitude of poverty, the amount of resources allocated for these programmes is not sufficient
• The programmes depend mainly on government and bank officials for their implementation. Since such officials are ill motivated, inadequately trained, corruption prone and vulnerable to pressure from a variety of local elites, the resources are inefficiently used and wasted
• There is also non-participation of local level institutions in programme implementation
• Overlapping of similar government schemes is a major cause of ineffectiveness as it leads to confusion among poor people and authorities and the benefits of the scheme do not reach the poor.
• The poverty alleviation program may not properly identify and target the exact number of poor families in rural areas. As a result, some of the families who are not registered under these programs are benefited by the facilities rather than the eligible ones

Shortage of Capital and Able Entrepreneurship

• Capital and able entrepreneurship have important role in accelerating the growth. But these are in short supply making it difficult to increase production significantly, when compared to other developing countries

Social Factors

• The social set up is still backward and is not conducive to faster development.
• Laws of inheritance, caste system, traditions and customs are putting hindrances in the way of faster development and have aggravated the problem of poverty

More Citizen participation

• Without the active participation of the poor, successful implementation of any programme is not possible
• This is possible through a process of social mobilisation , encouraging poor people to participate to get them empowered

Accelerating Economic Growth

• Instead, we should pursue labour-intensive path of economic growth.
• Such monetary and fiscal policies should be adopted that provide incentives for using labour-intensive techniques

Agricultural Growth and Poverty Alleviation

• It is also true that, all India level employment generated by new green revolution technology has been cancelled out by increasing mechanisation of agricultural operations in various parts of a country
• Thus, in the light of the finding of zero employment elasticity of agricultural output, positive impact of agricultural growth on the incomes of small farmers and, more particularly on the wage income of agricultural labourers, cannot be denied
• Hence, the need to balance between the two aspects
• Also, there is need to increase public investment in infrastructure and ensure adequate access to credit to the small farmers

Accelerating Human Resource Development

• Focus on Education, Health and Skill development , not only generates a good deal of employment opportunities but also raises productivity and income of the poor
• Hence, the need of efficient implementation of schemes like Pradhan Mantri Kaushal Vikas Yojana, Sarva Shiksha Abhiyan (SSA) etc, going forward

Growth of Non-Farm Employment

• For reduction of poverty, growth of non-farm employ­ment in the rural areas is of special importance.
• Non-farm employment can be created in marketing (i.e., petty trade), transportation, handicrafts, dairying, and forestry, processing of food and other agricultural products, repair workshops, etc.

Providing access to more Assets to vulnerable sections

• Rapid growth of population after independence has led to greater sub- di­vision and fragmentation of agricultural holdings, and this has resulted in lack of employment opportunities for agricultural labourers
• Redistribution of land through effective measures, such as implementation of tenancy reforms so as to ensure security of tenure and fixation of fair rent could be an important measure of reducing rural poverty

Poverty alleviation has always been accepted as one of India’s main challenges by the policy makers

• There is improvement in terms of per capita income and average standard of living; even though 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
• Hence, the need of actions to enable the fruits of development to reach all sections of the population

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Tech titans love Modi's economic powerhouse India — despite mass unemployment and abject poverty

• The Indian economy has grown strongly under Narendra Modi, whose party is set to win another term.
• India's success has caught the eye of figures including Elon Musk, Jamie Dimon, and Tim Cook.
• Youth unemployment, income inequality, regional disparities, and Russian oil remain big problems.

India's powerful economic growth and blossoming middle class under Narendra Modi have caught the eye of corporate titans like Elon Musk, Jamie Dimon, and Tim Cook.

Modi is pretty much a shoo-in for a third term as prime minister after the national election now underway ends on June 1. But the work starts there, as he'll have to navigate thorny issues such as youth unemployment, income inequality, and reliance on sanctioned Russian oil.

Fueling growth and shaking hands

India's economy has more than doubled in size during Modi's decade in charge to more than $3.7 trillion last year.

The International Monetary Fund (IMF) recently upgraded its growth forecast for real Gross Domestic Product (GDP) to a robust 7.8% this year, 6.8% in 2025, and 6.5% in 2026.

India has already overtaken Britain to become the world's fifth-largest economy. It's on track to leapfrog Japan and Germany into third spot behind the US and China by 2027.

The country's flagship stock index has also tripled in value since Modi took office in May 2014, thanks to wealth gains and growing investment appetites.

Moreover, one estimate puts the percentage of the Indian population living on less than $2.15 a day at below 5%, down from 12% in 2011. However, the World Bank pegged that figure at nearly 13% in 2021.

India's middle class has also ballooned with 60 million people now earning the rupee equivalent of more $10,000 a year — about $37,200 once adjusted for purchasing power . Goldman Sachs expects the ranks of the relatively affluent to swell to 100 million by 2027.

"Modi has done an unbelievable job in India," JPMorgan's Dimon told the Economic Club of New York last month. "I know the liberal press here, they beat the hell out of him. He's taken 400 million people out of poverty."

Musk has posted on X that he's looking forward to visiting India and meeting Modi this year. He delayed his trip last month, blaming "very heavy Tesla obligations." The pair are expected to discuss Tesla building a multibillion-dollar factory in the country.

As for Apple's Cook, he hailed India on a November earnings call as an "incredibly exciting market" and a " major focus of ours " given the explosive growth in potential customers as locals get richer.

Modi has also met with Nvidia CEO Jensen Huang, Microsoft boss Satya Nadella, and Alphabet's Sundar Pichai. He's likely to be seeking to attract foreign direct investment (FDI) in India — and to capitalize on bosses' desire to hedge their bets on China given its strained relationship with the US, economic woes, and how disruptive its strict pandemic lockdowns were to global supply chains.

"India's population and economic growth numbers are causing a lot of global executives to revisit their India presence and consider scaling up," Richard Rossow, a senior advisor and chair in US-India Policy Studies at the Center for Strategic & International Studies, told Business Insider.

"Paired with increased concerns about supply chain resilience and security concerns about China, it's a very good time for a hard push to win investments."

The United Nations said that India and China both had a population of 1.426 billion in April last year, meaning India is probably now the most populous given its rising birth rate.

Change for the better — mostly

Modi has instigated a raft of major economic reforms since taking office, intended to make India more business-friendly, and boost government revenues by taxing more of the country's vast informal economy.

He rolled out a tax on goods and services, simplified bankruptcy laws, lifted FDI restrictions, cut corporate income tax, and ended retrospective taxation.

However, not all of Modi's moves spurred growth.

"Demonetisation was a key economic policy which had negative effects on the economy," Kunal Sen, a director of the United Nations University World Institute for Development Economics, told BI.

Sen is the author of several books about India's economy and a professor of development economics at the University of Manchester.

He was referring to Modi's sudden declaration in November 2016 that all 500 and 1,000-rupee bills — 86% of Indian currency in circulation — would no longer be accepted as legal tender .

The government's goals were to capture undeclared income, get rid of counterfeit currency, broaden the tax base, and bring more activities into the formal economy.

"The other key economic policy was JAM — the trinity of bank accounts for the poor, mobile numbers and a biometric card. This last economic policy has been revolutionary," Sen said.

He was hailing a broader digitization drive under Modi that has transformed how Indians bank, invest, pay their taxes, and conduct business.

Prosperity for all

Modi's efforts have helped to usher in a more prosperous era for some Indians, but many have been left behind.

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Young people are India's beating heart, with about half its population under 25 and almost two-thirds under 35. Matching those hundreds of millions of people with jobs has proven a challenge, with youth unemployment almost tripling from below 6% in 2000 to about 18% in 2019. It still stands at a hefty 10% in 2023, per the International Labor Organization .

The report found that nearly 30% of India's graduates were unemployed in 2022, and only about 10% of the working-age population was formally employed.

"Unemployment is a big issue," Rossow said, emphasizing this isn't just a problem with recent graduates but a "much, much larger bubble: the underemployed farm laborers."

Rising agricultural productivity is likely to help farm workers make a faster transition to city life in the years ahead, but they'll struggle to secure modern jobs in the services industry "without significant reskilling and education," Rossow said.

As a result, lower-skilled manufacturing and assembly jobs and lower-end services jobs will be needed, he added.

Another major challenge will be tackling a widening wealth divide. The richest 10% of the population hold more than 72% of the nation's wealth, per an Oxfam report published last year.

Business tycoons Mukesh Ambani and Gautam Adani both rank among the world's 15 richest people, per the Bloomberg Billionaires Index . Luxury-goods sales are booming with long waitlists for flashy purchases like the Mercedes "G Wagon."

The lavish pre-wedding party thrown by the Ambani family earlier this year was singled out by some as an affront to the huge number of Indians living in poverty.

Almost 1.3 billion people live on less than $3,500 a year by one estimate, and India ranks 111th on the Global Hunger Index , below even North Korea.

Rising equality is partly explained by a "capital-intensive mode of economic growth along with increasing power of business conglomerates," Sen told BI, referring to how huge companies like the Adani Group secure huge government contracts to build ports, bridges, highways, and other infrastructure.

A third challenge is regional inequality, as some states like Bihar and Uttar Pradesh haven't experienced the same growth and modernization of their economies as others, Rossow said.

The Russia riddle

One striking aspect of Modi's economic boom has been its reliance on Russia since it invaded Ukraine in early 2022.

India went from getting 2% of its crude oil from Russia before the war, to 35% last year. During that period, the US and Europe slapped sanctions on Russian oil to defund Putin's military machine and punish Moscow for attacking a sovereign nation.

Despite that, India purchased an estimated $37 billion of Moscow's oil in 2023 — 13 times the amount it bought annually prior to the conflict. Its buying helped Russia rake in a record $320 billion of federal revenue last year.

Indian demand for Russian oil has cooled in recent months as new sanctions have made it more expensive , but the buying remains controversial.

Officials in India have defended the purchases, saying that if they'd bought Middle Eastern oil instead, global crude prices would have shot up.

India is also one of the world's largest oil refiners and has helped Western nations to maintain access to refined petroleum products even as they're refraining from buying Russian crude directly.

Yet the country imports 85% of its oil, so its overriding interest is securing the cheapest oil possible to support its development, said Neelima Jain, a senior fellow and chair in US India Policy Studies at CSIS.

"India will continue to buy Russian oil if the price remains favorable and allows for firm volume guarantees, as the country prioritizes energy affordability and accessibility during its rapid rural-to-urban transition, which has led to a 6% year-on-year growth in energy demand," she told BI.

"In an inflationary environment, economics [rather] than geopolitics will drive India's energy choices."

India the IT hub

Under Modi, India has made big strides in modernizing its economy, combating bureaucracy, and appealing to foreign investors.

Big Tech stalwarts like Microsoft have a long history of outsourcing to India, but recent efforts to cut red tape and slash corporate taxes appear to have fueled fresh interest.

Sweeping layoffs at Alphabet, Amazon, Meta, Salesforce and other US tech titans in the past few years could presage a large exodus of jobs to India.

Sanjay Shetty of Randstad India told The Economic Times last summer that he expected 30% to 40% of the tech jobs eliminated globally to move to India by 2025.

"India is going to be the biggest gainer in the medium to long term, as almost every company that we speak to is looking at expanding its India base," Shetty said.

Even if that pans out, it won't be a panacea for a country facing not just unemployment and underemployment, but also stark income inequality, regional disparities, and the risk of alienating Western allies by continuing to buy Russian oil.

Yet overall, India appears to be headed in the right direction.

"The growth is real, if focused on a few key states," Rossow said. "India's dynamic technology services sector is to IT services what China is to manufacturing. So there is much to cheer, even as the reform agenda seems to never end."

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