Poverty as a Challenge

Poverty is the greatest challenge India has faced since independence. It is not only a shortage of money. It is a daily experience of hunger, insecurity and lack of dignity. Understanding what poverty is, how it is measured, who suffers it most, and how it can be removed is essential. It is both a deep human concern and a heavily tested topic.

Poverty means being unable to secure the minimum requirements of a decent life: enough food, clean water, shelter, clothing, education and health care.

For a poor family, poverty shows up as hunger and malnutrition, lack of shelter, no access to clean water or sanitation, children kept out of school, and a constant sense of helplessness and insecurity. The poor depend on others and have little voice. They are vulnerable to any shock, such as illness or a bad harvest. Poverty is therefore best understood not just as low income but as a deprivation of basic capabilities.

To measure poverty, economists draw a poverty line. This is a level of income or consumption below which a person is counted as poor.

In India the line is based on a minimum level of consumption. It is the money needed to buy a basket of essentials. This basket is anchored to a minimum calorie requirement, a daily norm of food energy. The norm is set higher for rural areas, where work is more physical. Anyone whose consumption falls below the value of that basket is below the poverty line.

The poverty line is useful for comparing poverty over time and between regions. But it is a blunt tool. It counts only a bare minimum and ignores other deprivations, such as a lack of education or clean water.

Poverty does not fall evenly. It strikes hardest at particular groups:

• Rural: landless agricultural labourers and small farmers.
• Urban: casual labourers and the self-employed poor.
• Social groups: the Scheduled Castes and Scheduled Tribes have far higher poverty rates than average.
• Within families: women, elderly people and girl children often bear the heaviest burden.

Poverty also varies sharply between states. States like Bihar and Odisha have had much higher poverty than Punjab or Kerala. This shows that policy and growth can make a real difference.

The deep causes of India's poverty include the low level of economic development inherited from colonial rule. Colonial rule destroyed traditional industry. Other causes include the rapid rise in population and the unequal distribution of land and resources.

India's national income has grown several fold since 1947. Yet per capita income, the income per person, has improved only modestly. Rapid population growth divided the gains among ever more people. Widespread poverty is therefore a consequence of this slow growth in per capita income, not its cause.

Rural incomes have remained lower than urban incomes for three standard reasons:

• Low investment in agriculture: investment in farming has been low compared with investment in industry.
• Adverse terms of trade: prices of primary farm products are lower than prices of manufactured products, so farmers earn less for what they sell.
• Illiteracy: widespread illiteracy among farmers limits the use of scientific agriculture, keeping yields and incomes low.

India's strategy to remove poverty rests on two legs:

• Economic growth: a faster-growing economy creates jobs and resources, which can pull people out of poverty.
• Targeted anti-poverty programmes: schemes aimed directly at the poor, such as the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), which guarantees 100 days of wage employment a year to rural households, and various schemes for food, housing and self-employment.

Two names from the second leg are tested often:

• National Rural Livelihood Mission (NRLM): aims to improve rural livelihoods by mobilising the poor into self-help groups (SHGs) and providing skill development and training. It does not set up manufacturing industries, and it does not supply free farm inputs such as seeds, fertiliser or pump-sets.
• District Rural Development Agencies (DRDAs): district-level coordinating bodies for anti-poverty programmes. They secure coordination across sectors and departments and watch over the effective utilisation of programme funds. They are coordinating agencies, not Panchayati Raj Institutions, and they do not conduct scientific studies of the causes of poverty.

Poverty has fallen over the decades. But it remains widespread, and removing it fully is still India's central challenge.