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UNIT III : CURRENT CHALLENGES FACING THE INDIAN ECONOMY
Chapter 4: POVERTY
- Most challenging issues facing India- poverty, development of rural India and building infrastructure.
- Our human capital is the biggest asset; India needs investment in health and education, need for creating more employment, sustainable development.
- Government initiatives.
In this Chapter:
- Various attributes of poverty.
- dimensions relating to the concept of poverty.
- Criticized of measurement techniques.
- existing poverty alleviation programmes.
Introduction:
- One major aim of independent India was Providing minimum basic needs to the people and reduction of poverty.
- For development 5 year plan emphasis on upliftment of the poorest of the poor (Antyodaya), integrating the poor into the mainstream, achieving a minimum standard of living for all.
- Nehru accepted in Constituent Assembly (1947) independence as a step achievement & an opening of opportunities (Ending of poverty, ignorance, disease, inequality of opportunities)
Poverty as a challenge (India + world): 1/5 + world’s poor in India, 300 million in world are not able to meet their basic needs.
FACES OF POVERTY: Many, change place to place, time, describe as many ways.
- Often; it’s a situation that people want to escape.
- Poverty is a call to action for both poor & wealthy people: so that maximum people may have enough to eat, adequate shelter, education, health, protection from violence, and a voice for their communities.
- To measure, indicators like: Income, consumption, social, vulnerability to risks and of socio-political access etc.
WHO ARE THE POOR?
Poor in Urban: Have few assets, reside in kutcha hutments with baked mud walls & roof made of grass, thatch, bamboo and wood. But other poorest even not had such dwellings.
Poor in Rural: Landless, or have dry/waste land, not afford two meals a day, face Starvation, hunger; malnutrition, have basic literacy & skills, limited economic opportunities, unstable employment, Ill health, disability or serious illness; physically weak.
Situation of poor in Rural & Urban:
- Borrow assist from moneylenders, charge high interest -> chronic indebtedness.
- chronic indebtedness, not able to negotiate their legal wages.
- Many of them have no access to electricity, LPG (So use firewood and cow dung cake), safe drinking water.
- Situation of Women in poor society: extreme gender inequality; employment, education, decision-making in family, less care in all stages; childhood, teen, after marry, motherhood.
- Situation of child: Unhealthy,
Classification of poor:
- On the bases of occupation:
- Rural poor; work mainly as landless agricultural labourers, cultivators, non-agricultural jobs, tenant cultivators.
- Urban poor; largely the overflow of the rural poor; Migrate for employment and livelihood; does casual jobs or self employed; sell things on roadsides and engage in various activities.
- Ownership of assets: (i) Rural Poor, (ii) Urban Poor
What is Poverty?
- Shaheen Rafi Khan and Damian Killen: Define conditions of the poor: Poverty is hunger, being sick but not able to see a doctor, Unable to go school, unable to read, not having a job.
Why POOR PEOPLE IDENTIFIED ?
To solve the problem of poverty-> to design schemes-> sustainable & viable strategies required-> government needs to identify the poor.
For this, government needs to be able to identify who the poor?
- In pre-independent India, Firstly Dada bhai Naroji discussed Poverty Line: He used jail cost of living for adult prisoners + 1/3 children’s consumption & adjusted at the poverty line.
For example; out of 100 people, 9 are in jail and per person’s living cost is 20 Rs then poverty line will be: 20 * ¾ = 15Rs. ?
If 1/3 are children (33):
- out of 1/3 * ½ = 1/6 ; consume very less (Nill); So 1/3 * ½ * 0= 0;
- Out of 1/3 * ½ =1/6 have half diet so; 1/6* ½= 1/12 and
- Remaining persons 2/3 consumes full diet.
- SO total consumption [including children]= (1/6)(0) + (1/6)(1/2) + (2/3)(1) = (3/4) (Full)
- Naroji weighted average of consumption of three segments (nill, half & full consumption) gives the average poverty line.
- IN POST-INDEPENDENT INDIA:
Several attempts to identify the number of poor.
1962, Planning Commission formed a study group:
1979, ‘Task Force on Projections of Minimum Needs and Effective Consumption Demand’ formed.
1989, 2005: ‘Expert Groups’ were constituted.
Many individual economists also attempted to find poverty line.
For Defining Poverty; NITI Commission fix line & divide people into two categories;
- Poor: BPL but can be classify as (i) absolutely poor, (ii) very poor, (iii) Poor.
- Non-Poor: APL but can be classify as (i) Middle class, (ii) Upper middle (iii) Rich (iV) very rich (V) absolutely rich.
CATEGORISING POVERTY:
- Chronic poor: who are always poor + usually poor but sometimes gain money. Like- casual workers.
- Churning poor: regularly move in and out of poverty like- small farmers, seasonal workers.
- Occasionally/transient Poor: Most of the time rich but sometimes patch of bad luck.