POVERTY IN INDIA 1

Ø  POVERTY IN INDIA

Ø  INDIAN ECONOMY

Ø  SHASHI AGGARWAL ECONOMICS AND LAW CLASSES

Ø  MEANING OF THE POVERTY

• POVERTY IS THE INABILITY TO GET THE MINIMUM CONSUMPTION REQUIREMENT FOR LIFE ,HEALTH AND EFFICIENCY. IN ABILITY TO FULFILL EVEN THE BASIC REQUIREMENT OF LIFE(FOOD,SHELTER CLOTHING). THE TERM POVERTY IS USED IN TWO WAYS:-

1. ABSOLUTE POVERTY:
2. RELATIVE POVERTY

• TYPES OF POVERTY

1. ABSOLUTE POVERTY
2. RELATIVE POVERTY
3. SITUATIONAL POVERTY:-TEMPORARY TYPE OF POVERTY BASED ON THE OCCURRENCE OF AN ADVERSE EVENT LIKE ENVIRONMENTAL DISASTER,JOBLESS AND SEVERENESS HEALTH PROBLEM. PEOPLE CAN HELP THEMSELVES EVEN WITH A SMALL ASSISTANCE
4. GENERATIONAL POVERTY:-IT IS HANDED OVER TO INDIVIDUAL AND FAMILIES FROM ONE GENERATION TO THE ONE. THIS IS MORE COMPLICATED AS THERE IS NO ESCAPE .
5. RURAL POVERTY:-IT OCCURS IN RURAL AREA WITH POPULATION BELOW 50,000. IT IS THE AREA WHERE ARE LESS JOB OPPORTUNITIES.THE RURAL POVERTY RATE IS GROWING HAS EXCEEDED THE URBAN RATE.
6. URBAN POVERTY:-IT OCCURS IN THE METROPOLITAN AREA WITH POPULATION MORE THAN 50,000. MAJOR CHALLENGES FACED BY URBAN POOR LIKE LIMITED ACCESS TO HEALTH,EDUCATION,INADEQUATE HOUSING FACILITY AND UNHEALTHY ENVIRONMENT.

• ABSOLUTE POVERTY

1. ALSO KNOWN AS EXTREME POVERTY. IT INVOLVES THE SCARCITY OF BASIC FOODS,CLEAN WATER,HEALTH,SHELTER END EDUCATION AND INFORMATION. MEASURE OF POVERTY KEEPING IN VIEW THE ECONOMIC CONDITIONS OF A COUNTRY. POVERTY HAS BEEN DEFINED IN THE CONTEXT OF PER CAPITA INTAKE OF CALORIES AND MINIMUM LEVEL OF PER CAPITA CONSUMPTION EXPENDITURE.
2. FIRST INTRODUCED IN 1990 THE DOLLAR A DAY POVERTY LINE MEASURED ABSOLUTE POVERTY BY THE STANDARDS OF THE WORLD’S POOREST COUNTRY. IN OCTOBER 2015,THE WORLD BANK RESET IT DOLLAR 1.90 A DAY. THIS NUMBER IS CONTROVERSIAL,THEREFORE  EACH NATION HAS ITS OWN THRESHOLD FOR ABSOLUTE POVERTY LINE

3.     CALORIE CRITERIA:- THE ENERGY THAT AN INDIVIDUAL GETS FROM THE FOOD THAT HE EATS EVERY DAY IS MEASURED IN TERMS OF CALORIES. VIEW WAS FIRST PRESENTED BY LORD BOYOD ORR THE FIRST DIRECTOR GENERAL OF WORLD FOOD AND AGRICULTURE ORGANIZATION. ACCORDING TO HIM AN INDIVIDUAL MUST GET MINIMUM 2300 REQUIREMENT CALORIES PER DAY

IN INDIA PLANNING COMMISSION THAT AN INDIVIDUAL IN RURAL AREA MUST GET 2400 CALORIES AND IN URBAN AREA 2100 CALORIES PER DAY.

4. MINIMUM CONSUMPTION EXPENDITURE CRITERIA:-THOSE PEOPLE WILL BE TREATED AS LIVING BELOW THE POVERTY WHOSE PER CAPITA CONSUMPTION EXPENDITURE AT 2004 PRICES BELOW 368 PER MONTH IN RURAL AREA AND BELOW 559 PER MONTH IN URBAN AREA. FIXED BY NATIONAL SAMPLE SURVEY ORGANISATION IN 2004. FOR THE YEAR 2004-2005 22% OF INDIA ‘S POPULATION IS STILL LIVING BELOW POVERTY LINE.

• RELATIVE POVERY

1. IT IS DEFINED FROM THE SOCIAL PERSPECTIVE THAT IS LIVING STANDARD COMPARED TO THE ECONOMIC STANDARD OF POPULATION LIVING IN SURROUNDING.
2. RELATVE POVERTY IS MEASURED AS THE PERCENTAGE OF THE POPULATION WITH INCOME LESS THAN SOME FIXED PROPORTION OF MEDIAN INCOME.
3. REFERS TO POVERTY ON THE BASIS OF COMPARISON OF PER CAPITA INCOME OF SOME DIFFERENT COUNTRIES. THE COUNTRIES WHOSE PER CAPITA INCOME IS QUITE LESS IN COMPARISON TO OTHER COUNTRIES IS RELATIVELY POOR COUNTRY.
4.  
   

• DIFFERENCE BETWEEN ABSOLUTE AND RELATIVE DIFFERENCE
• ABSOLUTE

1. LACK OF BASIC RESOURCES
2. POVERTY LINE IS THRESHOLD LEVEL THAT DEFINES INDIVIDUAL LIVING IN ABSOLUTE POVERTY AS THE ONES LIVING BELOW IT.
3. REFERS TO SET OF CONDITION WHICH IS THE SAME IN EVERY COUNTRY AND DOES NOT CHANGE OVER A PERIOD OF TIME

• RELATIVE

1. MORE TO DO WITH THE INCOME INEQUALITY
2. IT MEASURES THE DEGREE OF POVERTY.IT IS PHENOMENON OF RELATIVE DEPRIVATION
3. RELATIVE POVERTY ON THE OTHER HAND REFERS TO CONDITION WHICH ARE SUBJECTIVE TO THE SOCIETY IN WHICH THE PERSON LIVES AND VARY BETWEEN CONTRY.

Ø  POVERTY LINE

1. POVERTY LINE IS THE LINE WHICH INDICATES THE LEVEL OF PURCHASING POWER REQUIRED TO SATISFY THE MINIMUM NEEDS OF A PERSON.
2. PURCHASING POWER CAN BE  EXPRESSED IN THE FORM OF AVERAGE PER CAPITA MONTHLY EXPENDITURE.
3. LINE DIVIDES THE POPULATION IN TWO PARTS ONE OF THOSE WHO HAVE THIS PURCHASING POWER AND THE OTHER ONE WHO DOES NOT.
4. ABOVE POVERTY LINE COVER THOSE WHO HAVE THE MINIMUM REQUIRED PURCHASING  POWER OR MORE
5. BELOW POVERTY LINE THOSE WHO DO NOT HAVE MINIMUM PURCHASING POWER TERMED AS POOR.
6. POVERTY LINE IS THE LEVEL OF INCOME TO MEET THE MINIMUM LIVING CONDITIONS.
7. POVERTY LINE IS THE AMOUNT OF MONEY NEEDED FOR A PERSON TO MEET HIS BASIC NEEDS.IT IS DEFINED AS THE MONEY VALUE OF GOODS AND SERVICES NEEDED TO PROVIDE BASIC WELFARE TO AN INDIVIDUAL.
8. IN DEVELOPED COUNTRIES WHERE THE ADVANCED STANDARD OF LIVING AND WELFARE CONCEPTS,POVERTY LINE IS HIGH AS BASIC STANDARD TO LIVE INCLUDE HIGHER CONSUMPTION REQUIREMENTS AND ACCESSIBILITY TO MANY GOODS AND SERVICES.
9. IN MANY LESS DEVELOPED COUNTRIES THE BASIC REQUIREMENT WILL BE LOW AND CONTAINS MOSTLY ESSENTIAL CONSUMPTION ITEMS NEEDED TO SUSTAIN LIFE.
10. POVERTY LINE IS SET BY THE WELFARE STANDARD IN PARTICULAR SOCIETY.

Ø  DETERMINATION OF POVERTY LINE IN INDIA

1. FIRST TIME IN 1962 BY WORKING GROUP OF EMINENT ECONOMISTS LIKE PROF D.R. GADGIL,B.N.GANGULI,DR. P.S LOKANATHAN
2. THEY TOOK THE REQUIREMENT OF MINIMUM STANDARD OF LIVING AND A DIET BASED RECOMMENDATION,THEY RECOMMENDED A MINIMUM CONSUMPTION EXPENDITURE LEVEL OF RS 20 PER CAPITA PER MONTH FOR RURAL AREA AND RS 25 PER CAPITA PER MONTH FOR URBAN AREA AT 1960-61
3. POVERTY IN INDIA IS DEFINED BY NATIONAL SAMPLE SURVEY ORGANIZATION.ONCE IN 5 YEARS NSSO CONDUCTS A LARGE SURVEY TO ESTIMATE POVERTY.AS PER NSSO REPORTS OF THE YEAR 2004-2005,POVERTY LINE IS DEFINED AS EXPENDITURE REQUIRED FOR A DAILY INTAKE OF CALORIE 2400 PER PERSON IN RURAL AREA AND 2100 PER PERSON PER MONTH IN URBAN AREA.PER MONTH THIS EXPENDITURE IS 446,48 IN RURAL AND IN URBAN IT IS 578.AS PER NSSO ESTIMATE 22% OF INDIAN POPULATION IS LIVING BELOW POVERTY LINE I.
4. PLANNING COMMISSION ESTIMATES THE LEVEL OF POVERTY IN INDIA  ON THE BASIS OF CONSUMER EXPENDITURE SURVEY CONDUCTED BY NSSO.THE METHODOLOGY FOR POVERTY ESTIMATION IS BASED ON THE RECOMMENDATION OF AN EXPERT GROUP TO REVIEW THE METHODOLOGY FOE ESTIMATION OF POVERTY( TENDULKAR COMMITTEE) ESTABLISHED IN 2005.
5. THE COMMITTEE RECOMMENDED USING MIXED REFERENCE PERIOD AS OPPOSED TO UNIFORM REFERENCE PERIOD
6. BASED ON CONSUMPTION OF THE FOLLOWING ITEMS CEREAL,PULSES,MILK,EDIBLE OIL,NON VEGETARIAN ITEM,VEGETABLES,FRESH FRUITS,DRY FRUITS,SALT AND SPICES,OTHER FOOD,INTOXICANTS,FUEL,CLOTHING,FOOTWEAR,EDUCATION,ENTERTAINMENT ETC

Ø  DEFINITION OF POVERTY LINE IN INDIA

 IN INDIA DEFINING A POVERTY LINE HAS BEEN CONTROVERSIAL SINCE MID 1970 WHEN THE FIRST SUCH POVERTY LINE WAS CREATED BY THE PLANNING COMMISSION. IT WAS BASED ON MINIMUM DAILY REQUIREMENT OF 2400 AND 2100 CALORIES REQUIREMENT OF 2400 AND 2100 CALORIES FOR AN ADULT IN RURAL AND URBAN AREA.ECONOMISTS SUCH AS DT LAKDAWALA AND LATER YK ALAGH AMONG OTHERS WERE INOVLVED IN WORKING OUT THE POVERTY LINE FROM TIME TO TIME.

1. SOME MODIFICATION WERE DONE BY SURESH TENDULKAR(2009) AND C RANGRAJAN(2014) CONSIDERING THE OTHER BASIC REQUIREMENT OF POOR SUCH AS HOUSING,CLOTHING,EDUCATION,HEALTH,SANITATION,CONVEYANCE,FUEL,ENTERTAINMENT ETC
2. THE TENDLUKAR COMMITTEE STIPULATED BENCH MARK DAILY PER CAPITA EXPENDITURE OF RS 27 IN RURAL AND RS 33 IN URBAN AREA AND ARRIVED AT CUT OFF 22% OF THE POPULATION BELOW POVERTY LINE.
3. LATER THE RANGRAJAN COMMITTEE RAISED THESE LIMITS TO RS 32 AND RS 47 IN RURAL AND URBAN RESPECTIVELY. AND WORKED OUT POVERTY 30%
4. THE DATA PEGGED THE POVERTY RATIO AT 29.8% OF THE POPULATION IN 2009-10 FROM 37.2.% IN 2004-2005.

NATIONAL POVERTY ESTIMATE( BELOW  IN % POVERTY LINE IN 1993-2012)

1.