“Fundamentally, poverty is a denial of choices and opportunities, a violation of human dignity.  It means lack of basic capacity to participate effectively in society.  It means not having enough to feed and clothe a family, not having a school or clinic to go to, not having the land on which to grow one’s food or a job to earn one’s living, not having access to credit.  It means insecurity, powerlessness and exclusion of individuals, households and communities.  It means susceptibility to violence, and it often implies living on marginal or fragile environments, without access to clean water or sanitation”-UN Statement, June 1998


Poverty is a state or condition in which a person or community lacks the financial resources and essentials for a minimum standard of living.

Poverty means that the income level from employment is so low that basic human needs can’t be met. Poverty-stricken people and families might go without proper housing, clean water, healthy food, and medical attention.

  • According to World Bank, Poverty is pronounced deprivation in well-being, and comprises many dimensions.
  • It includes low incomes and the inability to acquire the basic goods and services necessary for survival with dignity.
  • Poverty also encompasses low levels of health and education, poor access to clean water and sanitation, inadequate physical security, lack of voice, and insufficient capacity and opportunity to better one’s life.
  • Sustainable Development Goal (SDG) 1 aims to end poverty in all its forms and dimensions


  1. Situational Poverty (Transitory)
    • Situational Poverty (Transitory) is generally caused by a sudden crisis or loss and is often temporary.
    • Events connected with situational poverty include environmental disasters, divorce, or severe health problems. The fall of the economy can also be considered an event that could cause situational poverty.
    • This particular type of poverty is usually temporary as it involves a crisis or loss occurring
    • Sometimes, people can help themselves out of this situation quickly if they are given a bit of assistance, as the cause of their situations was just one unfortunate event.
  2. Generational or Chronic Poverty
    • Generational or Chronic Poverty occurs in families where at least two generations have been born into poverty.
    • Families living in this type of poverty are not equipped with the tools to move out of their situations.
    • In this type, there is usually no escape from it, as people are trapped in its causes and have no access to tools that will help them get out of it
  1. Absolute poverty
    • Absolute poverty (as defined by UN) is “a condition characterized by severe deprivation of basic human needs, including food, safe drinking water, sanitation facilities, health, shelter, education and information.”
    • Absolute poverty is the extreme kind of poverty involving the chronic lack of basic food, clean water, health and housing.
    • People in absolute poverty tend to struggle to live and experience a lot of child deaths from preventable diseases like malaria, cholera and water-contamination related diseases.
    • This type is usually long-term in nature.
    • It was first introduced in 1990, the “dollar a day” poverty line measured absolute poverty by the standards of the world’s poorest countries.
    • In October 2015, the World Bank reset it to $1.90 a day.
  2. Relative poverty
    • Relative poverty refers to the economic status of a family whose income is insufficient to meet its society’s average standard of living.
    • This kind is usually in relation to other members and families in the society.
    • Even though they have access to government support for food, water, medicine and free housing, they are considered poor because the rest of the community have access to superior services and amenities.
    • This type of poverty is known as relative because it is relative to the average standard of living in that person’s society.
    • What is considered high income in one country could be considered middle or low income in another.
    • It is defined from the social perspective that is living standard compared to the economic standards of population living in surroundings. Hence it is a measure of income inequality.
    • Usually, relative poverty is measured as the percentage of the population with income less than some fixed proportion of median income.
  1. Urban poverty
    • Urban poverty occurs in metropolitan areas.
    • The urban poor deal with a complex aggregate of chronic and acute stressors (including crowding, violence, and noise) and are dependent on often-inadequate large-city services.
    • Overcrowding, violence, noise, and poor community help programs make it even more difficult for people suffering of this type of poverty to get out of it.
    • The urban poor often find themselves in inadequate housing with poor safety and sanitation. Crime and violence are also much more rampant in urban settings than in rural ones, threatening the authority of law enforcement and the peace of mind of city dwellers.
    • In the close quarters that characterize city living, it is easy for disease to spread. In cities where many people on a daily basis use public restrooms, disease can spread rapidly and tracking down the source can be nearly impossible.
    • Over 100 million people in urban areas live below the poverty line. The United Nations estimates that most population increase in the future will be reported from the urban areas itself – by 2030, 165 million additional people are expected to be living in urban areas. What makes this statistic particularly disturbing is the fact that our colossal cities do not have the infrastructure to support such an increase in population.
    • Cities are plagued with the unavailability of affordable housing options. Urban areas offer better healthcare and education, but only to the privileged. Around 1 in 4 people live in slums in urban areas.
  2. Rural poverty
    • Like urban poverty above, rural poverty is another geographically defined form of poverty that occurs only in rural areas.
    • Rural poverty refers to poverty in rural areas caused due to factors of rural society, rural economy, and political systems that give rise to the poverty found there Rural poverty is often a product of poor infrastructure that hinders development and mobility.
    • Such condition of poverty is generally related with various forms of subjugation under social structure through which overriding social groups dictate their terms.
    • Rural areas have more single-guardian households, and families often have less access to services, support for disabilities, and quality education opportunities.
    • Lack of job opportunities only compounds the problem.
    • Poor infrastructure hinders communication, resulting in social isolation among the rural poor, many of whom have limited access to media and news outlets.
    • Political instability and corruption, customs of discrimination, unregulated landlord/tenant arrangements and outdated economic policies often make it impossible for the rural poor to rise above poverty lines.


Multidimensional Poverty

Poverty is often defined by one-dimensional measures – usually based on income. But no single indicator can capture the multiple dimensions of poverty.

  • Multidimensional poverty encompasses the various deprivations experienced by poor people in their daily lives – such as poor health, lack of education, inadequate living standards, disempowerment, poor quality of work, the threat of violence, and living in areas that are environmentally hazardous, among others.
  • A multidimensional measure of poverty can incorporate a range of indicators that capture the complexity of this phenomena in order to inform policies aimed at reducing poverty and deprivation in a country.
  • To fight poverty, one needs to know where poor people live. They are not evenly spread across a country, not even within a household.
  • Depending on the context of a country and the purpose of the measure, different indicators can be chosen to reflect the needs and priorities of a nation, as well as its constituent regions, districts, provinces, etc.

The Multidimensional Poverty Index (MPI) from the UN Development Programme (UNDP), the Oxford Poverty and Human Development Initiative (OPHI)

  • It captures poverty using 10 indicators: nutrition, child mortality, years of schooling, school attendance, ownership of assets, and access to proper house, electricity, drinking water, sanitation, and clean cooking fuel.
  • Poverty is measured in terms of deprivation in at least a third of these indicators.
  • The report said that in the 101 countries studied — 31 low income, 68 middle income and 2 high income – 1.3 billion people are “multidimensionally poor”,
  • Half of  the  3  billion  multidimensionally  poor  people  are  children  under  age  18.
  • The report underscores that the traditional concept of poverty is outdated, demonstrating more clearly than ever that labelling countries – or even households – as rich and poor is an oversimplification.
  • The report also highlighted a positive trend that those furthest behind are moving up the fastest.
  • India has reduced its poverty rate drastically from 55% to 28% in ten years. 271 million people moved out of poverty between 2005/6 and 2015/16.
  • While the overall headcount multidimensional poverty ratio for India in 2015-16 was 27.9%, the number was 36.8% for rural and 9.2% for urban India.
  • There were wide variations across states — poverty was the highest for Bihar (52.5%), followed by Jharkhand (46.5%), Madhya Pradesh (41.1%), and Uttar Pradesh (40.8%). It was the lowest for Kerala (1.1%), Delhi (4.2%), Punjab (6.1%), Tamil Nadu (7.3%) and Himachal Pradesh (8.1%).

Poverty in India

India is a developing country with poverty being a matter of serious concern for policy analysts and academic scholars because of its scope and intensity. With a growing population, this challenge is particularly intimidating for nation.

History of Poverty in India

According to Karl Marx, exploitation basically leads to poverty.

The 19th century and early 20th century saw increasing poverty in India during the colonial era.

  • Over this period, the colonial government de-industrialized India by reducing garments and other finished products manufactured by artisans in India.
  • These colonial policies moved unemployed artisans into farming, and transformed India into a region increasingly abundant in land, unskilled labour, and low productivity.
  • This consequently made India scarce in skilled labour, capital and knowledge.
  • The colonial policies on taxation and its recognition of land ownership claims of zamindars and mansabdars, or Mughal era nobility, made a minority of families wealthy.
  • Additionally, the government simultaneously encouraged the conversion of more land into farms and more agricultural exports from India.
  • These policies weakened the ability of poorer peasants to command land and credit. The resulting rising landlessness and stagnant real wages intensified poverty.
  • Eastern regions of India along the Ganges river plains, such as those now known as eastern Uttar Pradesh, Bihar, Jharkhand and West Bengal, were dedicated to producing poppy and opium. These items were then exported to southeast and east Asia, particularly China.
  • On an inflation adjusted basis, the average income of an Indian agrarian labourer was Rs. 7.20 per year in 1885, against an inflation adjusted poverty line of Rs. 23.90 per year. Thus, not only was the average income below the poverty line, but the intensity of poverty was also severe.
  • By the early 20th century, 3 out of 4 Indians were employed in agriculture, famines were common, and food consumption per capita declined in every decade.
  • Numerous famines and epidemics killed millions of people.The Lancet reported that 19 million people died from starvation and the consequences of extreme poverty in British India between 1896 and 1900.
  • In 1943, despite rising agricultural output in undivided South Asia, the Bengal famine killed millions of Indians from starvation, disease and destitution. Village artisans, along with sustenance farming families, died from lack of food, malnutrition and a wave of diseases.

Bengal famine 1943

  • The National Planning Committee defined goals in 1936 to alleviate poverty by setting targets in terms of nutrition (2400 to 2800 calories per adult worker), clothing (30 yards per capita per annum) and housing (100 sq. ft per capita).
  • But these poverty alleviation goals were theoretical, with little or no actual implementation at the ground levels.

After Independence

  • From 1951 to 1974, India’s first quarter-century of independence, the percentage of its population living in poverty rose from 47 to 56 percent.
  • The number of poor people rose gradually from 171 million in 1951 to a 321 million in 1974, before falling to 260 million in 1999-2000.
  • Between 1974 and 1999-2000, the poverty rate dropped by 53%, exceeding the millennium development goal of a 50% reduction over a 25-year period.
  • Various program conducted by government such as Green revolution, poverty reduction programmes, political will and better policy framing along with many other factors assisted in deceasing poverty.
  • Despite decline in poverty rate there is considerable movement in and out of poverty due to the year-to-year fluctuations in harvest quality, and can also be associated with momentary factors such as illness.
  • At the regional level, central and eastern India despite its rich endowment of natural resources lag behind rest of India in reducing poverty
  • Seventy per cent of India’s poor population reside in six states that include Uttar Pradesh, Bihar, Madhya Pradesh, Maharashtra, West Bengal and Orissa Uttaranchal, Jharkhand and Chattisgarh.
  • In India, 21.9% of the population lived below the national poverty line as per the 2011 census.

India lifted 271 million people out of poverty between 2006 and 2016


  1. Colonial Exploitation:
    • The British colonization and rule over India for about two centuries de-industrialized India by ruining its traditional handicrafts and textile industries.
    • Colonial Policies transformed India to a mere raw-material producer for European industries.
  2. Population Explosion:
    • Population growth rate is one of major ground of poverty in India. This has adverse effect level of illiteracy, poor health care facilities and lack of access to financial resources.
    • During the past 45 years, it has risen at a rate of 2.2% per year, which means, on average, about 17 million people are added to the country’s population each year.
    • High population growth affects the per capita income and makes per capita income even lower. This leads of unemployment and people may become poor. India’s population has steadily increased through the years.
    • Families living in poverty lack access to education and contraception but mostly they often have no pension system (they expect their children to take care of them in their old age) and they expect that many of their children die before the age of five.
  3. Low Agricultural Productivity:
    • A major reason for poverty in the low productivity in the agriculture sector.
    • The reason for low productivity is manifold such as fragmented and subdivided land holdings, lack of capital, illiteracy about new technologies in farming, the use of traditional methods of cultivation, wastage during storage, etc.
    • There is underemployment and disguised unemployment in the country, particularly in the farming sector.
    • This has resulted in low agricultural output and also led to a dip in the standard of living.
  4. Low and unequal Rate of Economic Development:
    • Economic development has been low in India especially in the first 40 years of independence before the LPG reforms in 1991.
    • Although the LPG reforms have led to a tremendous rise in Indian GDP only a few sections of Indian society have benefited from these, the lower income groups have suffered because of it, and are not even able to satisfy their basic minimum wants.
    • If the national income is not equally distributed among all communities in the country, there is a risk that poorer communities will end up poorer.
  5. Unemployment:
    • Unemployment is another factor causing poverty in India.
    • The ever-increasing population has led to a higher number of job-seekers.
    • However, there is not enough expansion in opportunities to match this demand for jobs.
    • The shortage of capital and entrepreneurship results in low level of investment and job creation in the economy.
  6. Social Factors:
    • Apart from economic factors, there are also social factors hindering the eradication of poverty in India.
    • Some of the hindrances in this regard are the laws of inheritance, caste system, certain traditions, etc.
    • Social inequality which originates from cultural ideas about the relative worth of different genders, races, ethnic groups, and social classes.
    • Poverty, inequality and growth interrelate with one another. Inequality can indirectly influence poverty as inequality affects growth and growth in turn influences poverty.
  7. Geography and Adverse ecology:
    • Geographic and ecological factors such as mountains, swamps, deserts and the like have also made living conditions unbearable in many places.
    • This is why some rural areas are poorer than others, especially in case of the Maharashtra and Rajasthan
    • In other instances, especially in the northeastern states some communities are cut off from the main economic centers of the country.
    • They find themselves located so far from roads, markets, health services, schools and economic facilities.
    • This makes it just impossible for the locals to access support and assistance, and also makes it discouraging for economic investors to consider investing there.
  8. Climatic Factors and Natural disasters:
    • Most of India’s poor belong to the states of Bihar, UP, MP, Chhattisgarh, Odisha, Jharkhand, etc.
    • Natural calamities such as frequent floods, disasters, earthquake and cyclone cause heavy damage to agriculture in these states.
  9. Conflicts and Unrests:
    • Naxalite movements in parts of north eastern states as well as parts of Jharkhand and Chhattisgarh has played an adverse role in widespread poverty in these regions.
    • Unrests result in massive loss of human lives, diseases, hunger and violence, destruction of property and infrastructure, economic investments and quality labor.
    • It is also a put-off for foreign investments. Wealth can never be created in such an environment.
  10. Disability and Disease
    • Poverty can also get worse if communities are affected by diseases such as Malaria and HIV Aids.
    • Diseases cause many deaths and children are left with no parents or caregivers.
    • Household wealth can also drain quickly from family members with disabilities.
    • In many communities, disabled members are looked down upon and not allowed to inherit assets. They are considered a stigma and excluded from public events and exposure.
    • For example, the incidence of poverty is 15-44% higher in households with a disabled head or adult.
  11. Lack of Education, Training and skills
    • People who are educated or had some training or skills are in a better position to apply ideas and knowledge into fixing basic problems and enhancing their livelihoods.
    • In the absence of training, skills or education, people cannot help themselves.
    • They cannot prevent diseases, and cannot apply new ways of doing things.
  12. Gender discrimination:
    • In many communities, girls were not allowed to be in school. Families preferred to invest in boys’ education than in girls.
    • Women were also not allowed to do major economic activity and had less ownership of lands and assets.
    • This idea negatively impacts on the well-being of women, and the development of their children is also impacted negatively.
  13. Poverty may itself be a source of poverty.
    • This is because, it denies the nation from investment, revenues for education or purchasing power for customer product, which in turn, is an inventive to effort.
    • Therefore, poverty continues itself.
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