How well is India dealing with poverty?


  • India needs to build social infrastructure capable of providing quality education, health, and nutrition to buck the trend.

What is the current scenario?

  • According to a recent Indian government committee constituted to estimate poverty, nearly 38% of India’s population (380 million) is poor.
  • 60% of the poor still reside in the states of Bihar, Jharkhand, Odisha, Madhya Pradesh, Chattisgarh, Uttar Pradesh and Uttarakhand.
  • The reason for these states to be in the category of the poorest state is because 85% of tribal people live there.
  • International poverty line stands at $ 1.25 per day and in 2010, 32.7% of the total population in India was below this line.

What are the causes of Poverty in India?

  • High population growth rate is one of major reasons of poverty in India.
  • It is expected that population in India will reach 1.5 billion by 2026 and then India will be the largest nation in the world.
  • Ever increasing prices of even basic commodities is another reason of poverty.
  • The problem lies with the unorganized sector as owners do not bother the way their workers live and the amount they earn.

How is India’s record of reducing poverty compared to other nations?

  • India extricated 120 million people from extreme poverty between 1990 and 2013.
  • Over the same period, China reduced the number of people living in extreme poverty from 756 million to 25 million.
  • The economic growth, between 1995 and 2012, the growth elasticity of poverty reduction for India is just over 0.12.
  • By contrast, countries such as Brazil, Mexico, Ecuador, and Thailand that witnessed relatively low economic growth rates emerge as positive outliers
  • The growth elasticity of poverty reduction for China is a little over 0.28, the numbers for Mexico and Brazil are 3.28 and 1.14 respectively.

What are the ways which may encouragereducing poverty in India?

Accelerating rural poverty reduction:

  • With four out of every five of India’s poor living in rural areas, progress will need to focus on the rural poor.
  • Capitalizing on growing connectivity between rural and urban areas, and between the agriculture, industry and services sectors, has been effective in the past two decades and holds promise for the future.

Creating more and better jobs:

  • The road out of poverty in India has been built on the performance of the labour market, but also benefitted from rising transfers and remittances, and favourable demographics among other factors.
  • Future efforts will need to address job creation in more productive sectors, which has until now been tepid and has yielded few salaried jobs that offer stability and security.

Focusing on women and Scheduled Tribes:

  • Two of the most worrying trends are the low participation of women in the labour market and the slow progress among Scheduled Tribes.
  • India today ranks last among BRICS countries, and close to the bottom in South Asia in female labour force participation.
  • Scheduled Tribes started with the highest poverty rates of all of India’s social groups, and have progressed more slowly than the rest.

Creating more ‘good’ locations:

  • India’s states continue to see large and growing differences in poverty levels and basic opportunities.
  • More and more of India’s poor are concentrated in the poorest states, and even within relatively prosperous states

Improving human development outcomes for the poor:

  • The recent past shows that some problems, such as undernutrition and open defecation, are endemic and not confined to the poor, and have not improved with economic growth.


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