Poverty In India!!

How has Poverty Increased!!!

Poverty estimates:-

There has been no uniform measure of poverty in India.The Planning Commission of India has accepted the Tendulkar Committee report which says that 37% of people in India live below the e poverty lin(BPL).
The Arjun Sengupta Report (from National Commission for Enterprises in the Unorganised Sector), based on data between the period 1993-94 and 2004–05, states that 77% of Indians live on less than 20 a day (about $0.50 per day). The N.C. Saxena Committee report states, on account of calorific intake apart from nominal income, that 50% of Indians live below the poverty line.
A study by the Oxford Poverty and Human Development Initiative using a Multi-dimensional Poverty Index 421 million of the poor are concentrated in eight North Indian and East Indian states of Bihar, Chattisgarh, Jharkhand, Madhya Pradesh, Orissa, Rajasthan, Uttar Pradesh and West Bengal. This number is higher than the 410 million poor living in the 26 poorest African nations. The states are listed below in increasing order of poverty based on the Multi-dimensional Poverty Index. (MPI) found that there were 650 million people (53.7% of population) living in poverty in India, of which 340 million people (28.6% of the population) were living in severe poverty, and that a further 198 million people (16.4% of the population) were vulnerable to poverty.

MPI rank	States	Population (in millions) 2007	MPI	Proportion of poor	Average intensity	Contribution to overall poverty	Number of MPI poor (in millions)

Estimates by NCAER (National Council of Applied Economic Research) show that 48% of the Indian households earn more than 90,000 (US$1,701) annually (or more than US$ 3 PPP per person). According to NCAER, in 2009, of the 222 million households in India, the absolutely poor households (annual incomes below 45,000) accounted for only 15.6% of them or about 35 million (about 200 million Indians). Another 80 million households are in income levels of 45,000– 90,000 per year. These numbers also are more or less in line with the latest World Bank estimates of the “below-the-poverty-line” households that may total about 100 million (or about 456 million individuals)

Impact of poverty

At the edge of a village in India

Since the 1950s, the Indian government and non-governmental organizations have initiated several programs to alleviate poverty, including subsidizing food and other necessities, increased access to loans, improving agricultural techniques and price supports, and promoting education and family planning. These measures have helped eliminate famines, cut absolute poverty levels by more than half, and reduced illiteracy and malnutrition.
Presence of a massive parallel economy in the form of black (hidden) money stashed in overseas tax havens and underutilisation of foreign aid have also contributed to the slow pace of poverty alleviation in India.
Although the Indian economy has grown steadily over the last two decades, its growth has been uneven when comparing different social groups, economic groups, geographic regions, and rural and urban areas.Gujarat, Haryana, or Delhi were much higher than for Bihar, Uttar Pradesh, or Madhya Pradesh.Poverty rates in rural Orissa (43%) and rural Bihar (41%) are among the world's most extreme. Between 1999 and 2008, the annualized growth rates for
Despite significant economic progress, one quarter of the nation's population earns less than the government-specified poverty threshold of 32 rupees per day (approximately US$ 0.6).
According to a recently released World Bank report, India is on track to meet its poverty reduction goals. However by 2015, an estimated 53 million people will still live in extreme poverty and 23.6% of the population will still live under US$1.25 per day. This number is expected to reduce to 20.3% or 268 million people by 2020.However, at the same time, the effects of the worldwide recession in 2009 have plunged 100 million more Indians into poverty than there were in 2004, increasing the effective poverty rate from 27.5% to 37.2%.
As per the 2001 census, 35.5% of Indian households availed of banking services, 35.1% owned a radio or transistor, 31.6% a television, 9.1% a phone, 43.7% a bicycle, 11.7% a scooter, motorcycle or a moped, and 2.5% a car, jeep or van; 34.5% of the households had none of these assets. According to Department of Telecommunications of India the phone density has reached 33.23% by December 2008 and has an annual growth of 40%. This tallies with the fact that a family of four with an annual income of 1.37 lakh rupees could afford some of these luxury items.

Causes:-

Lack of a market economy & over government regulation and red tape, known as License Raj is the main cause of poverty in India. While other Asian countries like China, Singapore and South Korea started with the same poverty level as India after independence, India adopted a socialist centrally planned, closed economy. Fortunately India has started to open its markets since the economic reforms in 1991 which has cut the poverty rate in half since then. Another cause is a high population growth rate, although demographers generally agree that this is a symptom rather than cause of poverty. While services and industry have grown at double digit figures, agriculture growth rate has dropped from 4.8% to 2%. About sixty percent of the population depends on agriculture whereas the contribution of agriculture to the GDP is about eighteen percent.The surplus of labour in agriculture has caused many people to not have jobs. Farmers are a large vote bank and use their votes to resist reallocation of land for higher-income industrial projects.

Caste system

Further information: Caste system in India

According to S. M. Michael, Dalits constitute the bulk of poor and unemployed. According to William A. Haviland, casteism is widespread in rural areas, and continues to segregate Dalits. Others, however, have noted the steady rise and empowerment of the Dalits through social reforms and the implementation of reservations in employment and benefits.
Caste explanations of poverty fail to account for the urban/rural divide. Using the UN definition of poverty, 65% of rural forward castes are below the poverty line.

India's economic policies

A rural worker drying cow dung in Bihar.

In 1947, the average annual income in India was US$619, compared with US$439 for China, US$770 for South Korea, and US$936 for Taiwan. By 1999, the numbers were US$1,818; US$3,259; US$13,317; and US$15,720, respectively.^[34(numbers are in 1990 international Maddison dollars) In other words, the average income in India was not much different from South Korea in 1947, but South Korea became a developed country by 2000s. At the same time, India was left as one of the world's poorer countries. License Raj refers to the elaborate licenses, regulations and the accompanying red tape that were required to set up and run business in India between 1947 and 1990.The License Raj was a result of India's decision to have a planned economy, where all aspects of the economy are controlled by the state and licenses were given to a select few. Corruption flourished under this system.

The labyrinthine bureaucracy often led to absurd restrictions - up to 80 agencies had to be satisfied before a firm could be granted a licence to produce and the state would decide what was produced, how much, at what price and what sources of capital were used.
—BBC

India had started out in the 1950s with: high growth rates, openness to trade and investment, a promotional state, social expenditure awareness and macro stability but ended the 1980s with: low growth rates, closure to trade and investment, a license-obsessed, restrictive state (License Raj), inability to sustain social expenditures and macro instability, indeed crisis.

Liberalization policies and their effects:-

Other points of view hold that the economic reforms initiated in the early 1990s are responsible for the collapse of rural economies and the agrarian crisis currently underway. As journalist and the Rural Affairs editor for The Hindu, P Sainath describes in his reports on the rural economy in India, the level of inequality neo-liberal policies of the government of India since the 1990s.The human cost of the "liberalisation" has been very high. The huge wave of farm suicides in Indian rural population from 1997 to 2007 totaled close to 200,000, according to official statistics. That number remains disputed, with some saying the true number is much higher. Commentators have faulted the policies pursued by the government which, according to Sainath, resulted in a very high portion of rural households getting into the debt cycle, resulting in a very high number of farm suicides. As professor Utsa Patnaik, India’s top economist on agriculture, has pointed out, the average poor family in 2007 has about 100 kg less food per year than it did in 1997. Government policies encouraging farmers to switch to cash crops, in place of traditional food crops, has resulted in an extraordinary increase in farm input costs, while market forces determined the price of the cash crop.Sainath points out that a disproportionately large number of affected farm As of 2006, the government spends less than 0.2% of GDP on agriculture and less than 3% of GDP on education. However, some government schemes such as the mid-day meal scheme, and the NREGA have been partially successful in providing a lifeline for the rural economy and curbing the further rise of poverty. Conclusion:-

Poverty happens everywhere. They think citiesmay offer them a better-off living. They think they'll be much better off living in the cities than in their own villages, which only offer them natural resources. Being rich and having a great sum of money instantly are often the cause of massive exodus. What happens later is beyond their expectations; they become jobless, homeless, and the worse impact is that they are unable to return to their villages for they don't evenhavemoney to return.