Poverty amidst plenty (2)

8/7/2019 Poverty amidst plenty (2)

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Poverty AmidstPlenty


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The economic condition of lacking these essential goods andservices to meet basic needs of life is called poverty.

Poverty is -

hunger,

lack of shelter,

being unhealthy & sick

A state of powerlessness,

lack of representation and freedom.

While poverty exists everywhere, it is most severe indeveloping countries, where more than one person in fivelives on less than $1 a day the threshold, which is beingused by the World Bank to define extreme poverty.

Poverty..


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Poverty line & its measurement-

The poverty threshold, or poverty line

Below Poverty Line is an economic benchmark andpoverty threshold used by the government of India to

indicate economic disadvantage and to identify individualsand households in need of government assistance and aid.

Measurement

Criteria are different for rural and urban areas.

The degree of deprivation is measured with the help of 13parameters.


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The Rosy side of the

equation Solid economic growth

Low inflation

Low unemployment

Low interest rates Increased productivity

Warehouses are full tooverflowing

Increased wealthaccumulation &increased per capitaincome

More millionaires percapita than any othercountry


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The dark side of boom. Inadequate housing,

Homelessness

Hunger

Poor nutrition Poor education

No proper health andhygiene.

Poor infrastructure


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Poverty is a vicious Circle


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1st World v/s 3rd World

EuropeanN

ations

African Nations


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Measures of the Inequality of

Income


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How much it is applicable to India ?

- when the income is not proportionally distributed.

INEQUALITY

Inequality Ratio 8.64

Top 10% ofPopulation 31.1 % of countrys income

Bottom 10% of Population 3.6 % of countrys income


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Cause of Inequality

Specific localization of economic growth

Income classification -

Inferences


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80 % of the wealth is acquired by 20 % of the population

Pareto principle

Paretos Law for income

distribution

fraction of population with

income greater than x

P(>=x) ~ x^(-)

Where, (Pareto Exponent)

= 1.5


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IncomeClass

Yearly family income(in Rs.)

population(in %) FY (04)

population(in %) FY (10)

Poor (destitute) < 16,000 35 22

Lower (aspirant) 16,000 22,000 43 36

Middle (climber) 22,000 45,000 19 32

Upper (consuming) 45,000 2,15,000 17 9Higher (rich) > 2,15,000 1 2

Population (in %) Income (in %)

Rich (20%) 82.70

Second (20%) 11.75

Third (20%) 2.30

Fourth (20%) 1.85

Poor (20%) 1.40

Distribution of World GDP -

Distribution of income in India -


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Gini coefficient

Measure of the inequality of the distribution

Applications

Val

ue of 0 total eq

uality

Value of 1 total inequality

to measure of income or wealth

to compare income and other ratios over countries


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Gini coefficient curve -

Income Gini coefficient of India is 36.8

G = A / (A + B)


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Human Development Index

a composite statistic used to rank countries by

level ofhuman development

Focuses on national performance and rankings

Not paying much attention to global perspectiveand including ecological considering


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3D Model


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HDI Report 2010US Japan Brazil China India

HDI Rank 2010 4 11 73 89 119

HDI Rank 2009 13 10 75 92 134

Population 308 million 127 million 180 million 1340 million 1190 million

GDP per capita $47,094 $34,692 $10,607 $7,258 $3,337

Life Exp. at

birth

79.6 83.2 72.9 73.5 64.4

Mean yrs. ofschooling

12.4 11.5 7.2 7.5 4.4

Exp. yrs of

schooling

15.7 15.1 13.8 11.4 10.3

Gini Index 40.8 24.9 55.0 41.5 36.8


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Recent Trends in HDI

HDI has resulted in more focused policy making

Millennium Development Goals(???)

As against the convention, economic prosperity and humandevelopment do not always coincide.

Multidimensional Approach of HDI

1. Multi-Dimensional Poverty Index

2. Inequality adjusted HDI

3. Gender Inequality Index


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Multi-Dimensional Poverty Index


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Inequality Adjusted Index


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Gender Inequality Index


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Competitive Advantage of Poverty

Globalization obliges companies to search the globe

for way to cut costs.

Lower wages in a country has provided with morecompetitive advantage.

So poverty becomes an advantage, and global jobsand production shift to it.

Eg: China


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Solutions1.Urban Poverty

Elevation

Inclusive Growth

Govt. Programmes -JNNURM

a) Urban Infrastructureand Governance

b) Basic Services to

Urban Poor


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2. Investment in ruralinfrastructure

Solutions need to be locationspecific.

Bihar, West Bengal, UP

Requires investment in ruralinfrastructure and education and

implementation of land reforms. Himachal Pradesh, Gujarat,

Maharashtra

Investment in education andexposure to non-farm activities

Jharkhand, Rajasthan, AssamReduction in food insecurity and

agriculture expansion andintervention.


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3. Investment in Health,

Water and Sanitation.

Essential to reap thebenefits of demographicdividend.

4. Investment in HumanCapital

Qualitative developmentof human capital


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5. Environmental Conservation

Poverty and Environmental degradation interlinked

Dependence on natural resources to be reduced.

Sustainable development to be encouraged.


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Presented by Shubha Mishra

Somik Sen

Shrinantu Ghosh

Sharvari Khandeparkar

Poverty amidst plenty (2)

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