Introduction to Poverty
Poverty, a multifaceted phenomenon, transcends mere economic deprivation, encompassing social, political, and cultural dimensions. It signifies a state where individuals or communities lack the financial resources and essentials for a minimum standard of living. In the Indian context, understanding and alleviating poverty has been a central objective of developmental planning since independence. This involves defining and measuring poverty accurately, identifying its complex causes, analyzing its far-reaching consequences, and implementing effective alleviation strategies. The approach to poverty has evolved from a unidimensional income/consumption focus to a multidimensional perspective, acknowledging deprivations in health, education, and living standards.
Concepts of Poverty
Absolute Poverty
Definition: A condition characterized by severe deprivation of basic human needs, including food, safe drinking water, sanitation facilities, health, shelter, education, and information. It depends not only on income but also on access to services. (Source: UN definition, World Summit on Social Development, Copenhagen, 1995)
It is a fixed standard, defined in terms of a minimum level of income or consumption basket required for survival.
Poverty Line Concept
The poverty line is the minimum level of income or consumption expenditure deemed necessary to achieve an adequate standard of living in a given country. It is often based on the cost of a minimum basket of goods and services (food and non-food items) required for basic sustenance. Individuals or households falling below this line are considered poor. In India, the poverty line has traditionally been linked to minimum calorie intake requirements and subsequently expanded to include other essential non-food items.
Relative Poverty
Definition: Poverty defined in relation to the economic status of other members of the society. It reflects the extent of inequality in income or consumption distribution within a country.
A person is considered relatively poor if their income or consumption level is significantly lower than the average or median level in their society. Even if absolute poverty is eradicated, relative poverty can persist as long as inequality exists.
Gini Coefficient
A statistical measure of income or wealth inequality within a nation or social group. It ranges from 0 (perfect equality), where everyone has the same income, to 1 (perfect inequality), where one person has all the income. A higher Gini coefficient indicates greater inequality. (Source: World Bank)
Lorenz Curve
A graphical representation of income or wealth distribution. It plots the cumulative percentage of total income received against the cumulative percentage of recipients, starting with the poorest individuals/households. The line of perfect equality is a 45-degree diagonal. The farther the Lorenz curve is from this diagonal, the greater the inequality. (Source: NCERT Class 11 Indian Economic Development - "Poverty")
Measurement of Poverty in India
Historical Committees & their Recommendations
Working Group (1962)
First attempt to define a poverty line, setting it at ₹20 per capita per month for rural areas and ₹25 for urban areas (at 1960-61 prices), excluding health and education.
Alagh Committee (1979)
Chaired by Dr. Y.K. Alagh. Recommended poverty line based on nutritional requirements (calorie intake): 2400 kcal per person per day for rural areas and 2100 kcal for urban areas. Poverty lines were to be updated using state-specific price indices.
Lakdawala Committee (1993)
Chaired by Prof. D.T. Lakdawala. Retained Alagh Committee's calorie norms. Recommended use of state-specific poverty lines and their updating using CPI-AL (rural) and CPI-IW (urban). Suggested disaggregation to state-level estimates.
Tendulkar Committee (2009)
Chaired by Prof. Suresh Tendulkar. Shifted from Calorie-based to Consumption Expenditure. Included non-food items (education, health, clothing). Poverty Line (2011-12): ₹816 (rural) & ₹1000 (urban). Estimated 21.9% poverty.
Rangarajan Committee (2014)
Chaired by Dr. C. Rangarajan. Critiqued Tendulkar for underestimation. Revised Poverty Lines (2011-12): ₹972 (rural) & ₹1407 (urban). Estimated 29.5% poverty. (Note: Not officially adopted by the government.)
Multidimensional Poverty Index (MPI)
Global MPI (UNDP & OPHI)
Acknowledges that poverty is not just about income but also about deprivations in other areas. It comprises 3 dimensions and 10 indicators:
- Health (1/3 weight): Nutrition, Child Mortality.
- Education (1/3 weight): Years of Schooling, Child Enrolment.
- Living Standards (1/3 weight): Cooking Fuel, Sanitation, Drinking Water, Electricity, Housing, Assets.
A person is identified as multidimensionally poor if they are deprived in at least one-third (33.33%) of the weighted indicators.
National MPI (NITI Aayog)
Developed by NITI Aayog, aligned with Global MPI, but with Indian context adaptations. It retains the three dimensions but includes 12 indicators.
Additional indicators under Health: Maternal Health & Bank Account.
Recent Reports: NITI Aayog's MPI Progress Review 2023
India's multidimensional poverty declined significantly from 24.85% (2015-16) to 14.96% (2019-21), a reduction of 9.89 percentage points.
135 million people exited poverty between 2015-16 and 2019-21. Rural areas saw the fastest decline. Improvement driven by gains in sanitation, cooking fuel, housing, and nutrition.
Global MPI 2023 (UNDP & OPHI) also noted India's remarkable progress, with 415 million people exiting multidimensional poverty in 15 years (2005/06–2019/21).
Causes of Poverty in India
Demographic Factors
- Population Growth: Pressure on resources, dilutes per capita benefits.
- High dependency ratio.
Economic Factors
- Unemployment & Underemployment.
- Low Agricultural Productivity.
- Inflation: Erodes purchasing power.
- Slow Industrial/Service Sector Growth (historically).
- Low Rate of Capital Formation.
Structural Factors
- Landlessness & Unequal Distribution of Assets.
- Inadequacies in Infrastructure.
- Colonial Exploitation (historical legacy).
Social Factors
- Caste System: Social exclusion, discrimination.
- Gender Inequality: Limited access to resources/opportunities.
- Lack of Quality Education & Skills.
- Poor Health & Malnutrition.
Regional Disparities
- Concentration of poverty in certain states (e.g., Bihar, UP historically).
- Lack of development in backward regions.
Consequences of Poverty
Social Impacts
- Malnutrition & Ill-health, high mortality.
- Lack of Education, intergenerational poverty.
- Poor Living Conditions (housing, sanitation).
- Social Exclusion & Discrimination.
- Increased Crime Rates, Child/Bonded Labour.
Economic Impacts
- Low Productivity, reduces work capacity.
- Low Savings & Investment.
- Reduced Demand in economy.
- Indebtedness from informal loans.
- Underutilization of Human Resources.
Political Impacts
- Vulnerability to Exploitation (vote-bank politics).
- Lack of Political Voice/Influence.
- Social Unrest & Instability.
Poverty Alleviation Programmes in India
Livelihood & Employment Generation
- Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), 2005: Guarantees 100 days of wage employment in a financial year to every rural household whose adult members volunteer to do unskilled manual work. Focuses on creation of durable assets.
- Deendayal Antyodaya Yojana-National Rural Livelihoods Mission (DAY-NRLM): Aims to reduce poverty by promoting diversified and sustainable livelihoods for the rural poor, primarily women, through Self-Help Groups (SHGs). Focuses on financial inclusion, skill development, market linkages.
- PM-SVANidhi (Prime Minister Street Vendor's AtmaNirbhar Nidhi): Launched in 2020 to provide affordable working capital loans to street vendors.
Food Security & Nutrition
- National Food Security Act (NFSA), 2013: Legally entitles up to 75% rural and 50% urban population to subsidized foodgrains under TPDS. Nutritional support for pregnant women, lactating mothers, children.
- POSHAN Abhiyaan (National Nutrition Mission): Launched in 2018 to reduce stunting, under-nutrition, anemia, and low birth weight.
Housing & Infrastructure
- Pradhan Mantri Awaas Yojana (PMAY) - Rural & Urban: Aims for "Housing for All." PMAY-G for rural pucca houses; PMAY-U addresses urban housing shortage.
- Swachh Bharat Mission (SBM) - Gramin & Urban: Launched in 2014 to achieve universal sanitation coverage and ODF status. SBM 2.0 focuses on ODF Plus and waste management.
Health & Social Security
- Ayushman Bharat (PM-JAY): World's largest government-funded health assurance scheme. Provides health cover of ₹5 lakhs per family per year for secondary/tertiary care to 10 crore+ poor and vulnerable families.
- National Health Mission (NHM): Encompasses NRHM & NUHM. Aims to provide accessible, affordable, quality healthcare.
- Atal Pension Yojana (APY): Provides a defined pension for citizens, especially unorganized sector workers, after 60 years of age.
Financial Inclusion
- Pradhan Mantri Jan Dhan Yojana (PMJDY): Ensures access to financial services like banking accounts, remittance, credit, insurance, pension.
- MUDRA Yojana: Provides loans up to ₹10 lakhs to non-corporate, non-farm small/micro enterprises.
Prelims-ready Notes
Core Concepts
- Absolute Poverty: Deprivation of basic needs; measured by Poverty Line (PL).
- Relative Poverty: Poverty in relation to others; measured by Gini Coefficient & Lorenz Curve.
- Gini Coefficient: 0 (perfect equality) to 1 (perfect inequality).
- Lorenz Curve: Graphical representation of income distribution; deviation from 45-degree line shows inequality.
Poverty Estimation Committees
| Committee | Year | Key Focus/Recommendation | Poverty % (Est.) |
|---|---|---|---|
| Alagh Committee | 1979 | Calorie intake (2400 rural, 2100 urban) | - |
| Lakdawala Committee | 1993 | State-specific PLs; CPI-AL (Rural) & CPI-IW (Urban) for updation | - |
| Tendulkar Committee | 2009 | Shift from calorie; Uniform PLB; Included health & education expenditure | 21.9% (2011-12) |
| Rangarajan Committee | 2014 | Higher calorie, protein, fat norms; Higher non-food exp.; MMRP data | 29.5% (2011-12 - Not adopted) |
Multidimensional Poverty Index (MPI)
| MPI Type | Agency | Dimensions | Indicators | Deprivation Threshold | India's MPI (2019-21) |
|---|---|---|---|---|---|
| Global MPI | UNDP & OPHI | Health, Education, Living Standards | 10 | 1/3 of weighted ind. | 16.4% (Headcount) |
| National MPI | NITI Aayog | Health, Education, Living Standards | 12 (adds Maternal Health & Bank Account) | 1/3 of weighted ind. | 14.96% (Headcount) |
Key Poverty Alleviation Programmes & Objectives
MGNREGA: Guaranteed rural wage employment
DAY-NRLM: Rural livelihoods, SHGs
PM-SVANidhi: Loans to street vendors
NFSA: Subsidized foodgrains
POSHAN Abhiyaan: Nutrition (stunting, anemia reduction)
PMAY (R & U): Housing for All
Mains-ready Analytical Notes
Major Debates/Discussions
- Poverty Line Debate: Adequacy of Tendulkar vs. Rangarajan lines. Should it be a "starvation line" or a "decent standard of living"? Highlights political sensitivity of poverty numbers.
- Unidimensional vs. Multidimensional Poverty: Income-based measures are partial. MPI (Amartya Sen's "capability approach") offers holistic view (health, education, living standards), but has data/weightage limitations.
- Targeting vs. Universalism: Debates on whether schemes should be narrowly targeted (reduce leakages/costs) or universal (wider coverage, avoid exclusion errors).
- Welfare vs. Empowerment: Are schemes merely providing doles or genuinely empowering by building capabilities (e.g., DAY-NRLM, skill development, asset creation)?
Historical/Long-term Trends & Changes
- Poverty Reduction Trend: Significant long-term decline in absolute poverty since 1970s, accelerated post-1991 reforms.
- Continuity: Persistence of regional disparities, vulnerability of specific social groups (SCs, STs, female-headed households), dependence on agriculture for rural poor.
- Changes: Shift from calorie-based to broader consumption baskets (Tendulkar), increasing adoption of MPI, focus shifting to asset creation/skill development/financial inclusion, greater use of technology (DBT, JAM trinity) to reduce leakages.
Contemporary Relevance & Impact
- SDG Goal 1: No Poverty: Central to achieving Sustainable Development Goals.
- Economic Growth & Poverty: Growth is necessary but quality (inclusive, job-creating) matters.
- Social Justice: High poverty levels deny social justice and basic human rights.
- Impact of COVID-19: Led to temporary surge, highlighted need for social safety nets. Uneven recovery.
- Climate Change Vulnerability: Poor disproportionately affected, potentially reversing gains.
Real-world/Data-backed Recent Examples
- India's MPI Progress: NITI Aayog's Progress Review 2023: 13.5 crore Indians escaped multidimensional poverty (2015-16 to 2019-21). Headcount fell from 24.85% to 14.96%.
- Global MPI 2023 (UNDP/OPHI): India saw 415 million people exit poverty (2005/06 and 2019/21).
- Effectiveness of PMGKAY: Widely acknowledged for preventing surge in hunger/extreme poverty during COVID-19. (IMF Working Paper, April 2022, suggested extreme poverty <1% in 2020 due to PMGKAY).
Current Affairs & Recent Developments
- NITI Aayog's National MPI Progress Review 2023 (July 2023): Highlighted that 135 million people exited multidimensional poverty between 2015-16 and 2019-21. Rural poverty declined faster. Key improvements in sanitation, cooking fuel, and housing.
- Global MPI 2023 (July 2023 by UNDP & OPHI): Showcased India's significant achievement in lifting 415 million people out of poverty in 15 years (2005/06–2019/21).
- Continuation of Free Foodgrains: Union Cabinet decision to provide free foodgrains under NFSA for one year from Jan 1, 2023 (subsuming PMGKAY).
- Budgetary Allocations: Union Budget 2023-24 continued allocations for schemes like MGNREGA, Jal Jeevan Mission, PMAY, NHM.
- Focus on Vulnerable Tribal Groups: Pradhan Mantri PVTG Development Mission announced in Budget 2023-24.
- World Bank Report "Poverty and Shared Prosperity 2022" (Oct 2022): Noted global poverty reduction had stalled due to COVID-19, Ukraine war, and inflation.
- Performance of MGNREGA: Ongoing discussions around budget allocation, wage rates, and its role as a safety net post-pandemic.
UPSC Previous Year Questions
Prelims MCQs
1. Q. The multi-dimensional poverty index developed by Oxford Poverty and Human Development Initiative with UNDP support covers which of the following? (UPSC 2012)
- (a) Deprivation of education, health, assets and services at household level
- (b) Purchasing power parity at national level
- (c) Extent of budget deficit and GDP growth rate at national level
Answer: (a)
Hint/Explanation: MPI focuses on deprivations in health, education, and living standards (which includes assets and services like sanitation, drinking water, electricity).
2. Q. With reference to the provisions made under the National Food Security Act, 2013, consider the following statements: (UPSC 2018)
1. The families coming under the category of ‘below poverty line (BPL)’ only are eligible for subsidized food grains.
2. The eldest woman in a household, of age 18 years or above, shall be the head of the household for the purpose of an issue of ration cards.
3. Pregnant women and lactating mothers are entitled to a ‘take-home ration’ of 1600 calories per day during pregnancy and for six months thereafter.
Which of the statements given above is/are correct?
- (a) 1 and 2 only
- (b) 2 only
- (c) 1 and 3 only
- (d) 3 only
Answer: (b)
Hint/Explanation: Statement 1 is incorrect (NFSA covers priority households, broader than BPL). Statement 3's calorie norm is incorrect (600 calories for take-home ration). Statement 2 is correct.
Mains Questions
1. Q. "An essential condition to eradicate poverty is to liberate the poor from the process of deprivation." Substantiate this statement with suitable examples. (UPSC 2016, 12.5 marks)
- Define poverty beyond income: deprivation in health, education, opportunities, voice (Amartya Sen's capability approach).
- Explain how deprivation perpetuates poverty (vicious cycle): Lack of education -> low-skill jobs -> low income. Poor health -> inability to work -> poverty. Social exclusion -> denial of opportunities.
- Government initiatives aimed at tackling deprivation: Sarva Shiksha Abhiyan/Samagra Shiksha (education), NHM/Ayushman Bharat (health), MGNREGA (livelihood security), PMAY (assets), Financial Inclusion (empowerment).
- Conclude by emphasizing that true poverty eradication requires addressing root causes of deprivation, not just income support.
2. Q. ‘Despite implementation of various programmes for eradication of poverty by the government in India, poverty is still existing’. Explain by giving reasons. (UPSC 2018, 15 marks)
- Acknowledge government efforts and some success (declining poverty ratios).
- Reasons for persistence: Implementation gaps (leakages, corruption, poor targeting), structural issues (unequal land distribution, informal jobs), resource constraints, lack of effective convergence, demographic pressures, social factors (caste, gender), quality issues (education, healthcare), external shocks (pandemic), lack of community participation.
- Suggest measures: Better governance, focus on capability building, job creation, effective monitoring.
Original MCQs for Prelims
1. Q. Which of the following committees recommended using state-specific poverty lines updated by CPI-AL for rural areas and CPI-IW for urban areas, while retaining the calorie norms of the Alagh Committee?
- (a) Tendulkar Committee
- (b) Rangarajan Committee
- (c) Lakdawala Committee
- (d) Alagh Committee
Answer: (c) Lakdawala Committee
Explanation: The Lakdawala Committee (1993) endorsed the Alagh Committee's calorie norms and consumption basket but suggested state-specific poverty lines and specific price indices for updating them.
2. Q. Consider the following statements regarding the National Multidimensional Poverty Index (MPI) by NITI Aayog:
1. It uses the same 10 indicators as the Global MPI developed by UNDP and OPHI.
2. A household is considered multidimensionally poor if it is deprived in at least half of the weighted indicators.
3. The latest NITI Aayog MPI Progress Review (2023) showed a decline in India's multidimensional poverty between 2015-16 and 2019-21.
Which of the statements given above is/are correct?
- (a) 3 only
- (b) 1 and 2 only
- (c) 2 and 3 only
- (d) 1, 2 and 3
Answer: (a) 3 only
Explanation: Statement 1 is incorrect (National MPI uses 12 indicators). Statement 2 is incorrect (MPI poor if deprived in at least one-third/33.33% of weighted indicators). Statement 3 is correct.
Original Descriptive Questions for Mains
1. Q. While India has made significant strides in reducing multidimensional poverty, regional and social disparities persist. Analyze the key drivers behind these persisting disparities and suggest targeted policy interventions to ensure more inclusive poverty reduction. (15 marks, 250 words)
- Introduction: Acknowledge MPI progress, then highlight persistent disparities.
- Drivers of Regional Disparities: Historical, geographical, unequal resource distribution, varying governance, industry concentration.
- Drivers of Social Disparities: Caste-based discrimination, gender inequality, exclusion of tribal/minority communities.
- Analysis of Interplay: How social factors exacerbate regional disparities.
- Targeted Policy Interventions: Special Area Development, investment in backward regions, infrastructure, local governance, fiscal transfers; anti-discrimination laws, affirmative action, women's empowerment, targeted schemes for SCs/STs/PVTGs, quality education/healthcare for all.
- Conclusion: Emphasize inclusive growth for equitable and sustainable eradication, aligning with "Sabka Saath, Sabka Vikas."
2. Q. The transition from consumption-based poverty measurement to multidimensional poverty indices marks a significant evolution in understanding deprivation. Discuss the advantages and limitations of the Multidimensional Poverty Index (MPI) in the Indian context. How can MPI data be more effectively utilized for policy formulation and monitoring poverty alleviation efforts? (15 marks, 250 words)
- Introduction: Briefly explain consumption-based poverty's limits; introduce MPI as holistic alternative.
- Advantages of MPI: Holistic view, policy focus (identifies specific deprivations), disaggregation (regional, social group analysis), monitoring progress, complements income poverty.
- Limitations of MPI: Data lags, debate on equal weightage, intra-household disparities not captured, quality aspect (access vs. quality), exclusion of some indicators (vulnerability to shocks).
- Effective Utilization: Granular analysis (district/block level), resource allocation, scheme design/targeting, SDG monitoring, feedback mechanism, capacity building for local officials.
- Conclusion: MPI is valuable, acknowledge limits; effective use with other data enhances strategies.