29 August 2022 – The Indian Express

Poverty in India

What Is Poverty?

• All of India’s citizens had access to the resources they required through the public distribution system prior to the 1990s, when the country had a closed economy. The government was only able to provide the resources needed to the target population—those who were deserving of government aid—due to budgetary restrictions and policy changes brought about by India’s admission into the global market.
• As a result, the Targeted Public Distribution System was subsequently implemented by the government. In other words, people who are considered to be poor receive food that is subsidised by the government.
• It is difficult to exactly describe poverty because of the variety of its causes and traits. It differs from nation-to-nation, urban-rural, etc. Or to put it another way, there are different definitions of poverty.
• In general, nevertheless, it’s believed that someone is deemed to be poor if they have limited access to or affordability for needs like food, clothing, a place to live, healthcare, education, etc.
• Spending Power: The UN and the World Bank compute poverty using parity and nominal relative basis.
• As a result, depending on the viewpoint, poverty is judged differently.

How was the poverty in India quantified?

Analysis of poverty in British India:

• The first poverty estimate for India was created by Dadabhai Naoroji and then published in his book “Poverty and Un-British Rule in India” in 1901.
• The National Planning Committee determined the extent of poverty in colonial-era India in 1936. By linking housing, food, and clothing costs, poverty was computed. India after independence also used this tactic. According to the National Planning Committee’s estimate, British India’s economy was in dire shape.

According to estimates, Independent India has a poverty rate of:

• A working group was established in 1962 to establish the country’s poverty line.
• This assessment was based on the minimum amount of calories required to survive and the projected cost of those calories in rural India. Based on prices in 1960–1961, this shows that the typical monthly poverty threshold is Rs. 20.
• Alagh Committee: Prior to 1979, poverty levels were determined by a person’s income. Poverty levels were determined in 1979 using statistics on how many calories the general public consumed, according to a committee led by Y K Alagh. The committee asserts that how poverty is perceived in urban and rural areas differ. A rural resident is deemed BPL if they take in less than 2400 calories each day. If a person in an urban setting consumes less than 2100 calories a day, they are considered to be living in poverty. It is assumed that because city dwellers don’t participate in as many physical activities as those in rural areas, they require fewer calories. The Alagh committee first defined the poverty line in India.
• The D.T. Lakdawala-led Lakdawala Committee proposed the Lakdawala Formula. It also takes into account household spending per capita. Both the Alagh and the Lakdawala committees used the same approach. However, it did have a number of requirements that the latter did not. Both health and education were considered in the estimation. This committee used the CPI-IL (Consumer Price Index for Industrial Labourers) and CPI-AL (Consumer Price Index for Agricultural Laborers) to determine the poverty line . In order to evaluate the poor, this method computes the average of the absolute minimum per capita household spending. The BPL includes anyone who lives in a residence where the per capita expenditure is less than the national average. The poverty line is built on top of the obtained value. According to this technique, 22% of the population was estimated to be below the poverty level in 2011, down from 36% in 2004–2005. Up until 2011, this method was applied to measure poverty in India.
• The Suresh Tendulkar Committee was constituted by the Planning Commission in 2005. This group’s recommendations are still in use today. The calorie-based strategy was advised to be dropped, and monthly expenses for utilities, transportation, education, and health were added. It created the new term “Poverty Line Basket” to describe and evaluate poverty. It required that the poverty line basket in both urban and rural areas be the same. If a person does not have access to any of the items in the poverty basket, they are deemed to be living in poverty. This method determines poverty based on the cost of living. However, the estimate that was generated was horribly insufficient, which outraged the public. The Rangarajan Committee was consequently created.
• Rangarajan Committee: Rangarajan presided over this group, which was formed in 2012. Additionally, it uses calorie-based poverty estimates. Due to the fact that it only considered the very minimum criteria, this has limits. The criterion for comfortable living arrangements was not included in this.
• Current estimation of the poverty line: The aforementioned circumstances show how difficult it is to determine the poverty level. The Indian government is still unable to develop an accurate method for calculating the level of poverty in the country. The assignment was given to a 14-person task team under the direction of NITI Aayog vice chairman Aravind Panagaria. They acknowledge their own shortcomings and propose the creation of a brand-new, specialised organisation to address the issue.

What causes poverty in India?

• Exploitation by colonial powers: As a result of India’s forced de-industrialization during colonial control, raw material output increased while exports of high-value goods like textiles and traditional handicrafts decreased. Because they were forced to buy British goods, the natives were unable to produce locally. The outcome was a large unemployment rate. Diseases, droughts, and other conditions at the time made the situation for the Indians worse.
• Population growth: The Indian economy may benefit from the rapid population growth brought on by a drop in the death rate and an increase in the birth rate. This is turning out to be a problem, though, given the high unemployment that exists right now and the increasing dependency on those who are employed. The huge population must be converted into human capital in order to support economic growth.
• Natural disasters: The states of India with the greatest percentages of BPL citizens include Bihar, Jharkhand, Odisha, Madhya Pradesh, Chattisgarh, Uttar Pradesh, and Uttarakhand. This is because SC/STs make up the majority of the population in these states, which underrepresents them and makes them vulnerable to natural disasters. These states’ potential to develop economically and in terms of agriculture is hampered by the natural disasters that occur there.
• Unorganized sector growth: A significant portion of the Indian economy is made up of unorganised industries. Now, the subject of labour exploitation is brought forward. Job anxiety is exacerbated by the increased demand for jobs.
• Agriculture is failing: The Indian economy’s agricultural sector is one of the worst. Farmer protests and suicides are increasing because of the rising debt and diminishing output. They would be impacted by long-term poverty as a result of this. The majority of Indians work in this industry, which makes very little money.
• Investment: The investment increases the number of employment opportunities. To do this, the Indian economy must be open to foreign investment. However, due to militancy, corruption, and other issues, some parts of India continue to be unfavourable.
• Social factors: Caste systems, illiteracy, underrepresentation of minorities, and social standards are still evident in some areas of India.
• Lack of trained labour: The population can be an asset for the economy if it is utilised well. Utilizing human capital can help with this. Initiatives to increase population literacy are moving somewhat slowly. Some people are turned down for employment because they lack the essential skills. As a result, unemployment and poverty exist.
• Corruption: The government has made significant progress in eradicating poverty. However, there is still a dearth of political will. The corruption of individuals in positions of power also contributes to poverty.
• Waste of resources: India is a nation with a wealth of natural resources that, if utilised wisely and efficiently, can be turned into a benefit.
• Lack of entrepreneurial spirit: India has many economic-boosters. For instance, several tribes can benefit from their rich creative and cultural legacy for their development and advancement through successful business. But due to a lack of leadership and entrepreneurial energy, they are wasted. The tribes continue to be one of the most vulnerable segments of Indian society.
• Lack of infrastructure: India still has numerous isolated regions despite its impressive economic growth. In many Indian villages, access to basic services like electricity is still restricted, which decreases their standard of living. There aren’t even adequate railroads or roads. They are unable to support the economy due to accessibility concerns.

What is the current state of affairs?

• According to the 2019 Global Multidimensional Poverty Index published by the UN Development Program, India’s multidimensional poverty fell by 27.5% between 2005–2006 and 2015–16. The assessment of the poor that considers not only their level of income but also their overall health and working conditions is known as multidimensional poverty.
• According to World Poverty Clock, nearly 44 Indians are escaping from extreme poverty every minute.
• As of 2011, there were 21.9 percent of Indians living in poverty.
• The unemployment rate is 7.1% as of April 2021. Because of the strong connection between unemployment and poverty in the country, this is a serious problem. Infrastructure development initiatives, such as building new roads and housing developments, have proliferated in recent years for the benefit of the impoverished. This might promote increased foreign investment in the country, creating additional job opportunities.

People in need:

• The poverty rate in India is projected to increase to 9.7 percent in 2020, which is a dramatic contrast to the January 2020 prediction of 4.3 percent.
• India’s 340 million disadvantaged citizens decreased to 78 million between 2011 and 2019, according to estimates.
• By 2020, the amount increased by 75 million.
• People who earn $2 or less daily are considered to be poor.
• India is responsible for around 60% of the increase in poverty around the world.
• The Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) had a record rise in participants, showing that the poor were having trouble finding work.

Middle-class people:

• By 2020, the middle class in India will have shrunk by 3.2 crores, according to projections.
• Middle-class individuals make between $10 and $20 per day, or between Rs. 700 and Rs.
• The middle-income category may have decreased from around 10 crores to only 6.6 crores.

Low-Income Group:

• In India, the great majority of the population is regarded as having low income.
• From 119.7 crores to 116.2 crores per day, fewer people belonged to this group, with about 3.5 crores living in poverty.
• Low-income individuals make between Rs. 150 and Rs. 700 each day.

Privileged population:

• To 1.8 crore people, the wealthier population fell by nearly 30%.
• A person is considered “rich” if their daily income is greater than Rs. 1,500.

Reasons:

• The pandemic-induced lockdown caused businesses to close, people to lose their jobs, and revenue to decline, which plunged the Indian economy into a deep depression.

How has the government responded to the issue of poverty?

Swarnajayanti Gram Yojana, Swarozgar:

• The premiere took place on April 1st, 1999.
• The Ganga Kalyan Yojana, the Million Wells Scheme (MWS), the Supply of Improved Toolkits to Rural Artisans (SITRA), the Training of Rural Youth for Self Employment (TRYSEM), and the Development of Women and Children in Rural Areas (DWCRA) were all merged into one programme .
• To lift beneficiaries out of BPL is its main objective.
• It assists rural residents who are self-employed and from disadvantaged backgrounds.
• 75:25 is the split of funds between the State and the Center.
• By functioning in clusters, this initiative aims to provide the rural poor with inclusive and effective support.
• The rural poor are organised into SHGs to provide training, develop capacity, and supply assets to generate income.
• The National Rural Livelihood Mission was the program’s new name as of 2011.
• To help the less fortunate, this was finally coupled with the Deen Dayal Upadhyaya Antyodyaya Yojana. This strategy also provides shelters and subsidies for the homeless. To increase employment in rural regions, vendor marketplaces are being developed.

Development Initiative at the Local Level:

• In its place, the former Jawahar Rozgar Program, was replaced by this one.
• It began in April 1999 with the intention of building infrastructure to generate employment in rural areas.

Pradhan Mantri Awas Yojna:

• Its two primary components are Pradhan Mantri Awaas Yojana (Grameen) and Pradhan Mantri Awaas Yojana (Urban)
• It started back in 2015.
• It combines initiatives like Saubhagya Yojana, Ujjwala Yojana (which provides LPG to BPL), and access to amenities for bathrooms, water, and drinking water (electricity).

Mahatma Gandhi’s National Rural Employment Guarantee Act, 2005:

• It provides 100 days of guaranteed work to rural households.
• They will receive unemployment benefits if their desired jobs are not available and they have been jobless for more than 15 days.
• Because of this, the government is held responsible and the rural population has access to work opportunities.
• Sampoorna Grameen Rozgar Yojana does not provide the additional resources and assistance that the National Food for Work programme does. Under this project, the Planning Commission identified 150 districts as being behind. They gained from their effort. Based on societal, social, and economic necessity, employment and food security

Pradhan Mantri Kaushal Vikas Yojana:

• It is a programme made to help people develop their skills in line with market demands.
• This programme is run by the Nation Skill Development Corporation (NSBC).
• Costs associated with training and evaluation are covered by government funding.
• The basis for the training made accessible under this programme is the National Skill Qualification Framework and industry-level standards.
• The beneficiaries include high school and college dropouts as well as graduates.
• In Telangana, the Rythu Bandhu Scheme was implemented to provide financial assistance of Rs. 4000 per acre every season to all landowners who were farmers.
• Kisan Pradhan Nicol Samman Giving all landholding farmers financial assistance for working capital is the aim of this initiative. For Indian farmers, this introduces the idea of a universal basic income. Study more.

Post-pandemic initiatives:

• Production-related incentive scheme
• Garib Kalyan Rojgar Abhiyaan

How to Proceed:

• The government must hold the several organisations responsible with implementing the Welfare Schemes accountable and transparent.
• It is essential to place a strong priority on developing infrastructure and talent.
• More money being spent by the government on nutrition, education, and health.
• The problem of not being able to define the poverty level must be resolved in order to help the target group.
• Giving the poor direct income transfers is a quick fix. The universal basic income should also be considered.
• The government needs to make investments in agriculture to lower rural poverty. Subsidies only solve short-term issues. Technology must also be developed to allow farmers to practise all-weather agriculture.
• Growth that prioritises employment Encourage industries that require a lot of work to grow the economy today.
• Reduce corruption to make sure services are delivered effectively.
• Poor households can become resilient enough to withstand significant shocks through holistic, multifaceted interventions designed to help people lift themselves out of extreme poverty by providing them with the tools, skills, and resources necessary to deal with the challenges that keep them imprisoned in a state of destitution. The government should also offer training in economic and financial skills, one-on-one coaching to boost confidence and hope, basic health care for families, and other things to make these resources profitable in addition to resources like livestock.