class-2
HOW TO DETERMINE THE POVERTY LINE:
Many ways of measuring poverty.
- By the monetary value of minimum calorie intake; Means per capita expenditure: 2400 calories-R, 2100 for U; based on this 2011-12: poverty line: R-816/person/Month; U-1000.
- Because To identify poor, Govt uses MPCE as proxy for income of households,
- This method/mechanism’s CRITICIZED; ?
- It groups all the poor together.
- Takes into account expenditure on food + few select items.
- MPCE can be helpful in identifying the poor as a group but difficult to identify most need poor.
- Doesn’t consider social factors that trigger poverty like- illiteracy, ill health, lack of access to resources, discrimination or lack of civil and political freedoms.
- Other factors (Except income and assets) need to associate with poverty line: accessibility to basic education, health care, drinking water, sanitation, Social Factors etc.
- Aim of poverty alleviation schemes should be- improvements in human lives (health, well-nourished, knowledgeable, community participation) by expanding things.
- Development: Removing the obstacles to the things that a person can do in life, such as illiteracy, ill health, lack of access to resources, or lack of civil and political freedoms.
- Government’s claim: poverty declined because, Higher growth rate, agricultural production, employment in rural areas, economic reform of 1990s.
- Economist’s doubts & raise voice against official estimation on: Way of data collection, items included in basket, methodology to estimate the poverty line, manipulation in counting………alternative methods suggested by scholers: SEN INDEX (Nobel Laureate), Poverty Gap Index and Squared Poverty Gap etc.
THE NUMBER OF POOR IN INDIA
- Counted through Head Count Ratio; poor estimated as the proportion of people below the poverty line.
- total number of poor persons residing in India?
- Where do they reside?
- Where their number or proportion declined?
- poverty of people and their distribution; between states and over time?
- Data on poverty by the NITI Aayog, estimated on the basis of consumption expenditure, collected by NSSO (Now NSO).
DURING 1973-2012
- Number + proportion declined but nature of decline; not encouraging.
- ratio declining slower than no.
- Gap b/w no of poor in R & U reduced but in case ratio; until 1993-94; same & after widening.
After 1990,
- absolute poor in rural areas; declined whereas in urban- increased.
- poverty ratio declined in both R & U.
- 1973-2012: Poor come down from 55 to 22 %.
- In 1973, 6 States; TN, UP, Bihar, MP, WB, Orissa: had poor in large quantity.
- During 1973- 2012, many states reduced the poverty to a considerable extent.
- Yet, 4 states (Odisha, MP, Bihar, UP) still far above the national poverty level.
- WB, TN reduced poverty much better than others; How they could do?
CAUSES OF POVERTY?
- Institutional:
- Deprived of quality education:
- Unable to acquire skills; less Incomes.
- Unable to access health care.
- unequal distribution of wealth
- Unemployment
- Indebtedness
Social:
- Face caste, religious and other discriminatory practices.
- social, economic and political inequality
- social exclusion
Agg. Poverty=sum of individual poverty;
Poverty in general due to:
- (i) low capital formation
- (ii) lack of infrastructure
- (iii) lack of demand
- (iv) pressure of population
- (v) lack of social/ welfare nets
- Main Cause; Colonial rule: Impact on Indian’s living standards is debatable, Undoubtedly were –ve impact on Economy & living standard.
- De-industrialization;
- Imports of manufactured cotton cloth from Lancashire; Displaced local production, Exports of cotton yarn, not cloth.
- 70 % + engaged in agriculture; So living standards of farmers more affected.
- Raised rural taxes; enabled merchants and moneylenders to become large landowners.
- Exported food grains; 1875 to 1900; Famines; 26 million died.
- Main goals:
- Provide a market for British exports
- Debt payments
- Provide manpower for imperial armies.
- Impoverished millions of people.
- Natural resources plundered.
- Industries worked to produce goods at low prices for uk
- Our food grains were exported
- Many famines and hunger; many died.
- 1857-58; revolt by Indian sepoys, troops & supported by- farmers, women ;causes: resentments, racism, gunpowder cartridges for the Enfield rifle, overthrow of many local leaders.
- Agriculture was & is the principal means of livelihood & land was/is primary asset of rural people.Since independence, Land reforms; Limited successful; Causes:
- Agricultural workers were not able to farm: small holdings, No money (assets) or skills.
- Many states failed to implement land redistribution policies.
- Rural poor in India: are small farmers; Has less fertile & dependency on rain, Survival depend on subsistence or livestock crops.
- Per-head availability of land for cultivation declined: Because rapid growth of population, without alternative sources of employment; Land fragmented; family’s basic requirements not fulfill; Farmers take loan-> when enable to pay-> commit suicide.
- Most of SC,ST-Not have necessary knowledge/skills; not able to participate in emerging employment opportunities in R,U.
- overflowed rural poor migrate to urban (To search employment + livelihood); Industrialisation couldn’t absorb all-> Became urban poor; either unemployed or casual labourers (most vulnerable; NO: job security/assets, limited skills, sparse opportunities, no surplus to sustain)
- Poverty-related to nature of employment: Unemployment/under employment/casual/intermittent nature of work in both R+U compels indebtedness; reinforce poverty.
- Price of (food grains + essential goods) increasing more than (luxury goods); intensifies the hardship + deprivation of lower income groups.
- Unequal distribution of income and assets; led to the persistence of poverty.
- Gap between: Rich and Poor in India has widened so it’s a multi-dimensional challenge multi-dimensional challenge.
- These causes has created two distinct groups in society:
- who posses the means of production and earn good incomes.
- who have only their labour to trade for survival.
As Constitution + Plans had primary objectives of development; social justice.
1st Plan; To bring economic & social change, pointed out to minimize poverty & inequalities in income, wealth and opportunity.
2nd Plan; also pointed- benefits of economic development must accrue to the relatively less privileged classes.
Like this, Approx. in all policy documents, govt. emphasis on poverty alleviation & adopted various Strategies.
THREE DIMENSIONS:
- GROWTH ORIENTED APPROACH/TRICKLE DOWN: Focus on Economic growth (GDP+PCI), In 1950s, rapid industrial + transformation of agriculture (GR); would benefit the underdeveloped regions & backward sections.
-> Couldn’t trickled down to poor because: Over all growth (agriculture + Industry)- not impressive, Population growth+,PCI-, Relative poverty+, Disparities (Regional+farmers) through GR, Unsuccess of Land Reform.
- SPECIFIC POVERTY ALLEVIATION PROGRAMS:
From 3rd Plan; Govt. focused on creation of additional assets & work for increase the income and employment for poor.
Programs:
- Food for Work (1970s):