Poverty and Development Issues

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Relevance: Mains GS I- Poverty and Development Issues.


  • Poverty is a multidimensional phenomenon in which a person or community lacks the financial resources and essentials for a minimum standard of living.
  • As per the Asian Development Bank‘s figures:
  • In India, 21.9% of the population lives below the national poverty line in 2011. In India, the proportion of the employed population below $1.90 purchasing power parity a day in 2011 is 21.2%. For every 1,000 babies born in India in 2017, 39 die before their 5th birthday.

Who are poor?

The World Bank sets the international poverty line at periodic intervals as the cost of living for basic food, clothing, and shelter around the world changes. In the 2008 update, the poverty line was set at $1.25 per day. In 2015, the threshold was updated to $1.90 per pay, which is where it currently stands.


What causes poverty?

The following can be some reasons causing poverty in India:

  • Population Rise
    • India’s population was 1.21 billion as per the Census of 2011 and the projections now estimate that the population will grow by 311 million by 2036. The report projects that as much as 70% of this increase will be in urban areas. India’s urban population will increase from 377 million in 2011 to 594 million in 2036 – a growth of 57%.
  • Low Productivity in Agriculture
    • Small land holding, fragmented nature of agriculture, post-harvest losses, and lack of latest technologies in agriculture are some of the impediments causing delays in the agriculture sector to realize its full potential.
  • Low Rate of Economic Development
    • India being a developing country has made many remarkable improvements in poverty and other aspects. However, the rate of development is still low compared to other OECD countries.
  • Price Rise
    • Inflation, especially food inflation is a major problem which our country faces. Covid-19 has exacerbated this situation further. Due to price rises, the poor cannot afford food, education, health, and other life-essential services for holistic development.
  • Unemployment
    • According to monthly data from the Centre for Monitoring Indian Economy, the unemployment rate in India shot up significantly from 7.87% in June 2019 to 23.48% in May 2020.
  • Social Factors
    • People falling in the poor category, keep on falling further on this web. As they are unable to provide good health, nutrition, and education to their kids, they further grow up in the same social environment.
Multidimensional Poverty Indices (MPI)
  • The Global Multidimensional Poverty Index (MPI) is an international measure of multidimensional poverty covering 107 developing countries.
  • According to Global MPI 2020, India is 62nd among 107 countries with an MPI score of 0.123 and 27.91% headcount ratio, based on the NFHS 4 (2015/16) data.

Multi Dimensional Poverty Index

  • National multidimensional poverty index [by Niti aayog]:

  • The NMPI is calculated using 12 indicators- nutrition, child and adolescent mortality, antenatal care, years of schooling, school attendance, cooking fuel, sanitation, drinking water, electricity, housing, assets, and bank account,
  • They have been grouped under three dimensions namely, health, education, and standard of living.
  • As per the index, 51.91% of the population in Bihar is poor, followed by Jharkhand (42.16%), Uttar Pradesh (37.79%), Madhya Pradesh (36.65%), and Meghalaya (32.67%).
  • On the other hand, Kerala registered the lowest population poverty levels (0.71%), followed by Puducherry (1.72%), Lakshadweep (1.82%), Goa (3.76%), and Sikkim (3.82%).
  • Other States and UTs where less than 10% of the population are poor include Tamil Nadu (4.89%), Andaman & Nicobar Islands (4.30%), Delhi (4.79%), Punjab (5.59%), Himachal Pradesh (7.62%), and Mizoram (9.8%).

Effects of Poverty


  • Reports have shown that Women makes a greater percentage of poor people as compared to men. The main cause for this is that women have generally found less access to education and employment.
  • Many women have always performed unpaid work as mothers, housewives. Many women are employed in fewer salary jobs such as domestic and farm labour.
  • Even within poor households women usually earn less than men and property and possessions are often in the name of a man.
  • The UN has found that although women perform nearly two-thirds of the world's work, they receive only one-tenth of the world's income and they own only one-hundredth of the world's property.


  • Another group that is most affected by poverty is children. Children are very badly affected by malnutrition and it has its most severe effect on children between the ages of six months and two years.
  • Malnutrition also means that children can more easily catch diseases and either die young or have poor physical and mental development as a result.
  • Poverty restricts the access to children to get educational opportunities, especially in early childhood development.
  • Many poor children also leave school before completing elementary education. Socio-economic circumstance conditions in childhood that result in low qualifications in adulthood help transmit poverty across generations.
  • The main cause of child poverty is a lack of opportunities among parents with low skills and low qualifications. Such parents are less likely to work, and if they do work they are more likely to have low earnings.


  • Young people have to suffer a lot due to poverty because they may be deprived of education facility which in turn limits employment opportunities.
  • In India, with a high unemployment rate, many young people do not get work which degrades their standard of living and they are not being able to access numerous facilities. Urban youth are also very susceptible to getting involved in crime, gangs and drug or alcohol abuse.

The elderly

  • Older people do not have employment and have to be taken care of by the rest of society. In India, most poor older people survive on the monthly pensions paid by the state.
  • Because of high unemployment, many families share the pensions meant for the elderly and it ends up being inadequate for their needs.
  • Older people also often look after grandchildren and continue to perform unpaid domestic work for their families. This especially applies to older women.


  • It is generally accepted that environmental degradation, rapid population growth and stagnant production are closely linked with the fast spread of acute poverty.

Population explosion

  • Poverty remains a major issue where the population increases at a rapid rate. Poverty in India is common with the nation estimated to have a third of the world's poor.
  • The population growth rate is one of the major grounds of poverty in India. This has adverse effects level of illiteracy, poor health care facilities and lack of access to financial resources.

Poverty and health issues

  • The issue of poverty and health within the nation has remained predominant since Indian independence. Poverty dominant factor that leads to health-related problems in both urban and rural populace.
  • The rapid increase of the population, especially the slum inhabitants primarily suffers from Tuberculosis, Malaria and some water-borne diseases.
  • The major cause of these diseases is the unhygienic environment. In slums area, there is a lack of water, sanitation facilities that lead to the growth of deadly diseases among the dwellers.


Poverty estimation

  • The Tendulkar poverty line remains the official poverty line and is the basis of the current official poverty estimates in 1993-94, 2004-05, and 2011-12.
  • As per the Tendulkar estimation, the percentage of people living below the poverty line in India is 21.9%. However, as per Rangarajan's estimation, the percentage of people living below the poverty line in India is 29.5%.


 Challenges in Estimating Poverty
  • Components of PLB: 
    • Determining components of Poverty Line Basket (PLB) is one of the challenges of poverty line estimation because of the price differentials (of constituents of the basket) which vary from state to state and period to period.
  • Variations across states:
    • Some states such as Odisha and West Bengal supported the Tendulkar Poverty Line while others such as Delhi, Jharkhand, Mizoram etc. supported the Rangarajan report.
    • The current official measures of poverty are based on the Tendulkar poverty line, fixed at the daily expenditure of ₹27.2 in rural areas and ₹33.3 in urban areas is criticised by many for being too low.
  • Demographic and Economic Dynamics: 
    • Further, consumption patterns, nutritional needs and prices of components keep on changing as per dynamics of macroeconomy and demography.
  • Lack of consensus among the states:
    • Over the acceptance of the Tendulkar and Rangarajan committee report. Some states such as Odisha and West Bengal supported the Tendulkar Poverty Line while others such as Delhi, Jharkhand, Mizoram etc. supported the Rangarajan report.
    • Most of the governments have mothballed the reports of committees and panels à because this issue is not only politically sensitive but also has deeper fiscal ramifications.
  • The problem of determining threshold:
    • If the poverty threshold is high, it may leave out many needed people; while if it is low, then it would be bad for the fiscal health of the government.


Poverty and Development

  • Both poverty and development are interlinked with each other. The concept of growth is actually one of the major aspects of development in the country.
  • While the concept of growth is quantitative in nature, the concept of development is qualitative in nature. If a country is growing, it is not necessary that the country is developing. When growth is negative in a country, there is inadequate development. This leads to inequality in the country.
  • When inequality in the country grows, the country is said to be in a state of poverty, and with poverty comes negative development. Hence we can see that the cycle is repeating itself. This is also known as the ‘cycle of poverty.
  • Certain regions in India like those of Rajasthan, Karnataka, Jharkhand, Odisha, etc. are known to be prone to drought. These regions are also known to be poverty-stricken regions in India. This is mostly because of the lack of good governance in these areas and the lack of basic facilities. These areas do not have a basic infrastructure of effective transportation as well.
  • While on the other hand, Eastern India is rich in natural as well as energy resources, still the growth rate there is minimal and some of the poorest states like Chhattisgarh, Jharkhand is there. 

Poverty and Sustainable Development Goals (SDGs) 

  • Ending poverty in all its forms is the first of the 17 Sustainable Development Goals (SDGs) of the 2030 Agenda for Sustainable Development.
  •  The SDGs’ main reference to combatting poverty is made in target 1. A: 
  • “Ensure significant mobilization of resources from a variety of sources, including through enhanced development cooperation, in order to provide adequate and predictable means for developing countries, in particular least developed countries, to implement programs and policies to end poverty in all its dimensions.”
  •  The SDGs also aim to create sound policy frameworks at national and regional levels, based on pro-poor and gender-sensitive development strategies to ensure that by 2030 all men and women have equal rights to economic resources, as well as access to basic services, ownership and control over land and other forms of property, inheritance, natural resources, appropriate new technology, and financial services, including microfinance

Initiatives by  Government to Curb Poverty in India

  • Ending poverty in all its forms is the first of the 17 Sustainable Development Goals (SDGs) of the 2030 Agenda for Sustainable Development.
  • The government of India took several initiatives to eradicate poverty from the country. A few of them are discussed below-
  • Saansad Aadarsh Gram Yojana (SAGY) – Ministry of Rural development initiated the scheme in 2014. The scheme aims to develop five ‘Adarsh Villages’ or ‘Model Villages’ by 2024. Further details on the Saansad Aadarsh Gram Yojana (SAGY) scheme are available on the given link.
  • National Rural Livelihood Mission (NRLM) – Ministry of Rural Development started NRLM 2011 to evolve out the need to diversify the needs of the rural poor and provide them jobs with regular income on a monthly basis. Go through the National Rural Livelihoods Mission (NRLM) in detail here.
  • Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) – In 2005 Ministry of Rural Development initiated MGNEREGA to provide 100 days of assured employment every year to every rural household. One-third of the proposed jobs would be reserved for women. Read in detail about Mahatma Gandhi National Rural Employment Guarantee Act, (MGNREGA) over here.
  • National Urban Livelihood Mission (NULM) – In 2013, NULM was commenced by the Ministry of Housing and Urban Affairs focusing on organizing urban poor in Self Help Groups, creating opportunities for skill development leading to market-based employment, and helping them to set up self-employment ventures by ensuring easy access to credit. You can go through the DAY-NULM| National Urban Livelihood Mission on the given link.
  • Pradhan Mantri Jan Dhan Yojana (PMJDY) – the Ministry of Finance in 2014 initiated PMJDY that aimed at direct benefit transfer of subsidy, pension, insurance, etc., and attained the target of opening 1.5 crore bank accounts. The scheme particularly targets the unbanked poor. Further details on Pradhan Mantri Jan-Dhan Yojana (PMJDY) are available here.
  • Pradhan Mantri Kaushal Vikas Yojana: It will focus on the fresh entrant to the labour market, especially the labour market and class X and XII dropouts.
  • Food for work program: Aim is to enhance the food security of the poor with the means of waged employment.
  • PM Awas Yojana: Aims at providing affordable housing to all, with all the basic amenities like drinking water, sanitation, and electricity.
  • Other schemes like Integrated Child Development Program, Midday Meal scheme, etc are also providing food to the needy sections like children and women.


Impact of Covid-19 on poverty

  • According to the World Bank, many people who had barely escaped extreme poverty could be forced back into it by the convergence of COVID-19, conflict, and climate change.
  • Middle-income countries such as India and Nigeria will be significantly affected and these middle-income countries may become home to 82% of the new poor.
  • The goal of bringing the global absolute poverty rate to less than 3% by 2030, which was already at risk before the crisis, is now beyond reach without swift, significant, and substantial policy action. 
  • To deal with the COVID-19 crisis, India launched the Pradhan Mantri Garib Kalyan Yojana(Prime Minister’s Welfare Scheme for the poor) package of INR 1.7 trillion, targeting the poor and migrant population, which offers insurance cover of INR 5 million (USD 66.7 thousand) per health worker, free food for 800 million people, social security net of INR 6,000 (USD 80) each for 200 million women, immediate ex-gratia of INR 1,000 (USD 13) to 30 million elderly, widows and persons with disabilities, farmers and construction workers.



Poverty is the greatest violence. Pacifism that can see the cruelties only of occasional military warfare and is blind to the continuous cruelties of our social system is worthless-Mahatma Gandhi 

  • Movement in the HDI is driven by changes in health, education, and income. The schemes for these are meant for long-term improvement in human development, rural infrastructure, employment, etc., and can’t be substituted by cash transfer. Thus, a complementary and aiding income can be a balanced solution.
  • A transparent and safe financial architecture that is accessible to all is important for the success of the UBI. In other words, the success of UBI depends on the success of an efficient mode of delivery like JAM Trinity.
  • Study the efficiency of similar schemes in other countries (Finland, Kenya, and Spain, etc.) and work out the best implementation suitable for India.
  • Accelerating rural poverty reduction: Merely focusing on agriculture development would not lead to inclusive development of rural India. Many other factors affect the rural economy and the poor. Capitalizing on the growing connectivity between rural and urban areas, and between the agriculture, industry, and services sectors, has been effective in the past.
  • Creating more and better jobs: This is the key for eliminating poverty along with other dimensions of poverty like hunger, skill set, malnutrition, literacy, etc
  • Focusing on women and Scheduled Tribes: The most worrying trends are the low participation of women in the labour market and the slow progress among scheduled tribes. Feminization of women and labour is a worrying trend that needs the government's intervention.



  • The main objective of all our development policies had been aimed at promoting rapid and balanced economic development with equity and social justice.
  • But the benefits of all our policies and initiatives have not reached all the sections of people.
  • The promise of the constitution and dreams of our forefathers of an egalitarian society remains unfulfilled.
  • Time has come to think out of box solution to eliminate poverty as some sectors of the economy, some regions of the country have developed to an extent where it can compete with developed countries in terms of social and economic development, yet there are many others who have not been able to come out of the vicious circle of poverty.
  • While India’s GDP and national income is rising every year, not everyone has benefited equally from this prosperity.
  • Poverty acts as a barrier against gender development & human development.
  • Therefore, SDG Goal 1 aims to end poverty in all its forms everywhere.
  • Economic Survey 2017 gave both the pro and anti-arguments. Its intent was only to ‘generate a debate’ around the topic (without suggesting UBI for immediate implementation). However eventually, Interim-Budget 2019: PM-KISAN ₹ 6k / per year to small and marginal farmers.

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