Reasons why Poverty still exists in India

• Heavy pressure of population
  • India’s population was 84.63 crores in 1991 and became 102.87 crores in 2001
  • Rapid population growth causes excessive sub-division and fragmentation of holdings. As a result, per capita availability of land has greatly declined and households do not have access to sufficient land to produce enough output and income for them.
  • Rapid growth in population in India since 1951 has caused lower growth in per capita income causing lower living standards of the people
• Unemployment and under employment
  • Due to continuous rise in population, there is chronic unemployment and under employment in India.
  • There is educated unemployment and disguised unemployment, and Poverty is just a reflection of this aspect
• Lack of Inclusive Economic Growth
  • The first important reason for mass poverty prevailing in India is lack of adequate economic growth in India
  • Despite increase in National Income and Savings rate since independence, poverty in India did not reduce sufficiently as:
    • industrial growth did not generate much employment opportunities
    • Growth strategy mainly benefitted the rich, than aiding the poor
    • Capital intensive and labour-displacing technology was adopted in the growing industries. As a result, unemployment and underemployment increased
    • Besides, due to the increase in income inequalities during this period, rise in average per capita income could not bring about significant rise in per capita income of the weaker sections of the society
    • Further, trickledown effect of overall economic growth was operating only to a small extent
• Sluggish Agricultural Performance and Poverty
  • The experience of Punjab and Haryana shows that, the agricultural growth through use of new high yielding technology (during Green revolution), poverty ratio can be significantly reduced
  • However, in various states of the country such as Orissa, Bihar, Madhya Pradesh, Assam, East Uttar Pradesh, where poverty ratio is still very high; new high-yielding technology has not been adopted on a significant scale and as a result agricultural performance has not been good. As a result, poverty prevails to a larger extent in them.
  • Further, Indian policy makers have neglected public sector investment in agriculture, particularly irrigation
    • As a result, irrigation facilities whose availability ensures adoption of new high-yielding technology and leads to higher productivity, income and employment, are available in not more than 33 per cent of cultivable land
    • As a result, many parts of the country remain semi-arid and rain-fed areas, where agricultural productivity, income and employment are not sufficient to ensure significant reduction in poverty
• Non-implementation of Land Reforms
  • Equitable access to land is an important measure of poverty reduction
    • Access to adequate land, a productive asset, is necessary for fuller employment of members of an agricultural household
  • Most of the rural poor are agricultural labourers (who are generally landless) and self-employed small farmers owning less than 2 acres of land
    • They also are unable to find employment throughout the year. As a result, they remain unemployed and under-employed for a large number of days in a year
• Inflation and Food Prices
  • Inflation, especially rise in food prices, raises the cost of minimum consumption expenditure required to meet the basic needs. Thus, inflation pushes down many households below the poverty line
• As assessment of Poverty Alleviation programmes, state three major areas of concern which prevent their successful implementation
  • Due to unequal distribution of land and other assets, the benefits from direct poverty alleviation programmes have been appropriated by the non-poor
  • Compared to the magnitude of poverty, the amount of resources allocated for these programmes is not sufficient
  • The programmes depend mainly on government and bank officials for their implementation. Since such officials are ill motivated, inadequately trained, corruption prone and vulnerable to pressure from a variety of local elites, the resources are inefficiently used and wasted
  • There is also non-participation of local level institutions in programme implementation
  • Overlapping of similar government schemes is a major cause of ineffectiveness as it leads to confusion among poor people and authorities and the benefits of the scheme do not reach the poor

• • • Ex: Consider the case of Karnataka, where the Suvarna Aarogya Suraksha Scheme (SASS) and the Rashtriya Swasthya Bima Yojana (RSBY) is being implemented
    • The Suvarna Aarogya Suraksha Scheme potentially overlaps with the health insurance schemes for handloom weavers and handicraft artisans supported by the Central Government.
    • It is also likely that some of the members of cooperative societies may also belong to BPL families covered under SASS and the RSBY

The poverty alleviation program may not properly identify and target the exact number of poor families in rural areas. As a result, some of the families who are not registered under these programs are benefited by the facilities rather than the eligible ones

• Shortage of Capital and Able Entrepreneurship
  • Capital and able entrepreneurship have important role in accelerating the growth. But these are in short supply making it difficult to increase production significantly, when compared to other developing countries
• Social Factors
  • The social set up is still backward and is not conducive to faster development.
  • Laws of inheritance, caste system, traditions and customs are putting hindrances in the way of faster development and have aggravated the problem of poverty