Poverty

Question 1

Poverty

Answer 1

• Insecurity, powerlessness & exclusion of individuals, households, and communities. It means susceptibility to violence and it often implies living in marginal or fragile environments, without access to clean water or sanitation

Question 2

Types of Poverty

Answer 2

1. Absolute Poverty/ Extreme/ Abject poverty
2. Relative Poverty
3. Situational Poverty
4. Generational Poverty

Question 3

Absolute Poverty/ Extreme/ Abject poverty

Answer 3

Scarcity of necessities such as shelter, running water, and food. Families who live in absolute poverty tend to focus on day-to-day survival

Question 4

Relative Poverty

Answer 4

It is defined from the social perspective that is living standard compared to the economic standards of population living in surrounding. It is a measure of income inequality

Question 5

Situational Poverty

Answer 5

Temporary type of poverty based on occurrence of an adverse event like environmental disaster. job loss and severe health problem.

Question 6

Generational Poverty

Answer 6

Handed over to individual and families from one generation to the one

Question 7

Causes of poverty

Answer 7

1. Poor fiscal capacity of government (due to tax evasion & avoidance)
2. Lack of family planning
3. Agricultural distress (Unprofitable nature agriculture due to vagaries of monsoon & structural bottlenecks in the APMC Market)
4. Lack of financial planning
5. Lack of financial inclusion, debt trap by informal money lenders
6. Poor enforcement of labour law
7. Social discrimination
8. Poor Female Labour Force Participation Rate
9. Corruption/leakage in poverty alleviation programs

Question 8

Poverty Estimation

Answer 8

1. Poverty Line: MIN expenditure (or income) required to purchase a basket of goods and services necessary to satisfy basic human needs and this MIN expenditure
2. Poverty Ratio: Proportion of population BPL or HCR (Headcount Ratio)

Question 9

History: Pre-Independence Poverty Estimation

Answer 9

1. Dadabhai Naoroji through his book, “Poverty and Unbritish Rule in India” made the earliest estimation of poverty line (16- 35 Rs per capita per year)
   - The poverty line proposed by him was based on the cost of a subsistence or minimum basic diet (rice or flour, dal, mutton, vegetables, ghee, vegetable oil, and salt).
2. National Planning Committee (1938) poverty line (ranging from Rs 15 to 20 per capita per month) was also based on minimum standard of living perspective in which nutritional requirements were implicit.
   - Set up by Subhash Chandra Bose under chairmanship of Jawaharlal Nehru for purpose of drawing up an economic plan with the fundamental aim to ensure an adequate standard of living for the masses
3. The Bombay Plan (1944) proponents had suggested a poverty line of 375 per capita per year

Question 10

History: Post-Independence Poverty Estimation

Answer 10

1. Planning Commission Expert Group (1962). formulated separate poverty lines for rural and urban areas ( Rs. 20 & 25 per capita per year respectively)

2 VM Dandekar and N Rath (1971), made the first systematic assessment of poverty in India, based on National Sample Survey (NSS) data

• Considered subsistence living or basic minimum needs criteria as measure of poverty line.
• Expenditure based Poverty line estimation, generated a debate on minimum calorie consumption norms.

3 Alagh Committee (1979): Constructed a poverty line for rural and urban areas on the basis of nutritional requirements and related consumption expenditure.

-Poverty estimates for subsequent years were to be calculated by adjusting the price level for inflation.

Question 11

Poverty Estimation committee

Answer 11

Refer Acads

Question 12

SECC 2011

Answer 12

Refer Acads

Question 13

Poverty Estimation: Challenges

Answer 13

1. Components of PLB: Determining components of Poverty Line Basket (PLB) is one of the challenges of poverty line estimation because of the price differentials (of constituents of basket) which vary from state to state and period to period.
2. Demographic and Economic Dynamics: Further consumption patterns, nutritional needs and prices of components keep on changing as per dynamics of macro economy and demography,
3. Lack of consensus among the states over the acceptance of Tendulkar and Rangarajan committee report
4. Some states such as Odisha and West Bengal supported the Tendulkar Poverty Line while others such as Delhi, Jharkhand, Mizoram etc. supported Rangarajan report

Question 14

Poverty Estimation : Current Scenario

Answer 14

Poverty estimation in India is now carried out by NITI Aayog task force through calculation of poverty line based on the data captured by the National Sample Survey Office (NSSO) under Ministry of Statistics and Programme Implementation (MOSPI

Question 15

Poverty Estimation: Way Ahead

Answer 15

• Redefining Poverty lines: Poverty lines have to be recalibrated depending on changes in income, consumption patterns and prices, as India is now a middle-income country, with an estimated per capita income of around $9.000 in purchasing power parity.
• Viable Poverty line; It makes sense to set the poverty line at a level that allows households to get two square meals a day and other basic necessities of life.
• Hybrid of Absolute and Relative Measurement of Poverty: The hybrid approach which would measure poverty frame the perspective of a common global standard of living and relative poverty within countries
• Political Economic Equilibrium: Indian political policy and administrative systems have to adjust to the new realities of the transition to a middle-income country, in which poverty does not mean living at the edge of hunger but rather lack of income to take advantage of the opportunities thrown up by a growing economy
• The focus of government spending should be on the provision of public goods rather than subsidies

Question 16

Poverty Estimation: International methods

Answer 16

1. World Bank: -21.2% of Indians are poor (2011)

• World Bank’s International Poverty Line (IPL) stands at person living daily on US$1.90 (PPP exchange rate)
• In absolute terms, India was home to largest # of people below IPL BUT in 2018, Nigeria took over India.

‘Poverty & Shared Prosperity Report’ published by World Bank 2016, 2018

2. UNDP (UN Development Programme): -28% poor in India

MPI (Multidimensional Poverty Index): 3 Dimensions, 10 Indicators

Dimensions- 10 indicators

(i) Health: Nutrition, Child mortality (2)
(ii) Education: Years of schooling, School attendance (2)
(iii) Living Standards: Cooking fuel, Sanitization, Drinking water, Electricity, Housing, Assets (6)

Developed by OPHI (Oxford Poverty & Human Developement initiaives) and UNDP

Question 17

Poverty Alleviation

Answer 17

1. Employement Generation: Refer Acads
2. Social Security: Refer Acads
3. Housing- PMAY-U & G
4. Food: Refer Acads