Poverty In India

Poverty In India

India currently has 84 million people a year in extreme poverty and represents 6.8% of its population as of May 2021. India lifted 271 million people out of extreme poverty between 2005/06 and 2015/16. The frequency of multidimensional poverty has dramatically decreased from 51.7 percent in 2005 to 27.9 percent in 2015. In 2020 India can grow from 9.8 % in 2016 to 9.2 percent in 2020. By 2020 the government said 6.7% of the population is above its official poverty limit. A total of 1.2 lakh people living in poverty in India in 2012 had lived to be more than 2500 people, or 8.2 billion in. Here are the notes for Human Poverty Index.

Introduction To Poverty In India

What Is Poverty?

Poverty can be defined as a social phenomenon in which a section of the source is unable to fulfil even its necessities of life. When a substantial segment Ol society to deprived of the minimum level of living and continues at a bare subsistence level, that successor is said to be plagued with mass poverty. The countries of the third world exhibit invariably me existence of mass poverty, although pockets of poverty exist even in the developed countries.

In almost all underdeveloped countries where per capita income is very low, income inequality has resulted in a number of evils, of which poverty is certainly the most serious one. In India, even now in spite of all the development during the past five and a half decades, nearly forty per cent Ol the population is poor and for most of the time suffers from extreme destitution.

No one says that equitable distribution of present income in India will make everyone rich, but there must not be any doubt about the fact that it will ensure required minimum consumption to all. In India, the generally accepted definition of poverty emphasises a minimum level of living rather than a reasonable level of living. This attitude is borne out of a realization that it would not be possible to provide even a minimum quantum of basic needs for some decades and, therefore, talk about a reasonable level of living or good life may appear to be wishful thinking at the present stage.

Concept of Poverty

Two types of standards can be used to express the extent of poverty i) absolute standard; ii) relative standard. The absolute standard of poverty is calculated by first setting up certain minimum physical standards of living. This minimum standard is then converted into monetary terms. . The population whose level of income (or expenditure) is below this figure, is considered to be below the poverty line. bounties, o In the relative concept the distribution of income at different levels are calculated. A comparison of the top 5 to 10 per cent with the bottom 5 to 10 per cent of the population is supposed to reflect the relative standards of poverty. This kind of concept is not suitable for a country like ours. In India, it is more appropriate to determine the extent of poverty through absolute terms as the main concern for our country is the existence of mass poverty.

Poverty Line

The poverty line is based on the expenditure level at which a minimum calorie intake and indispensable non-food purchases are assured. The Sixth Five Year Plan defined the poverty line on the basis of an average intake of 2400 calories per person in rural and 2100 calories per person in urban areas. Given the updated State-specific poverty line the number of poor as a percentage of the total Tale population or the poverty ratio should be calculated separately for rural and urban areas.

The National Sample Survey (NSS) consumption surveys should be the basic source of information for estimating the proportion of the population below the poverty line and changes occurring in this regard. It is better to rely exclusively on the NSS for estimating the poverty ratio in rural and urban areas. Taking immediate steps by the Central Statistical Organisation to construct, the price indices representing changes in consumer prices of the poor at relevant disaggregate levels. To provide a complete picture of the state of well being of the population, we need supplementary estimates of the overall poverty ratio with the assessment. The composition of the poor population in terms of dominant characteristics. The nutritional status of the population.

The Poverty Gap Index

The poverty gap index is defined by the mean distance below the poverty line expressed as a proportion of that line (where the mean is formed over the entire population, counting the non-poor as having zero poverty gap). The poverty gap thus measures the transfer that would bring the income of every poor person exactly upto the poverty line, thereby eliminating poverty. In this way, the poverty gap reflects the depth of poverty, as well as its incidence. However, the poverty gap index is insensitive to the extent of inequality among the poor.

If income is transferred from a poor person to someone poorer, the poverty gap index will not change. This limitation notwithstanding, the poverty gap measure is definitely superior to a simple headcount index and it is this reason why of late it is in common use. Let us now consider estimates of poverty in terms of the poverty gap index. Ozler, Datt and Ravallion have compiled these estimates for the Poverty and Human Resources Division of the World Bank.

These estimates clearly indicate that from 1950-51 to 1973-74 there was no long term time trend but thereafter there was a steady decline in the poverty gap index till 1989-90. In the early 1990s, this trend was reversed and in July 1995 – December 1997, the poverty gap index was 8.21 for the rural population and 7.27 for the urban population.

The Squared Poverty Gap Index

The squared poverty gap index is defined as the mean of the squared proportionate poverty gaps. This measure reflects the severity of poverty as it is sensitive to inequality amongst the poor. In this sense, it is, without doubt, the most appropriate measure of income poverty. Estimates of the squared poverty gaps. provided by Ozlor, Datt and Ravallion clearly show that until 1973-74 the severity of poverty had not declined as compared to 1950-51. However, since 1973-74 there is a sharp decline in the squared poverty gap index for both urban and rural populations. For the rural population, the squared poverty gap index in 1997 was 2.76 against 7.13 in 1973-74. Similarly, for the urban population, the squared poverty index declined from 5.22 in 1973-74 to 2.73 in 1997.

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