Poverty is Widespread in India

7/31/2019 Poverty is Widespread in India

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Poverty is widespread inIndia, with the nation estimated to have a third of the world's poor.According to a 2005World Bankestimate, 41.6% of the total Indian population falls below theinternational poverty lineof US$ 1.25 a day (PPP, in nominal terms 21.6 a day in urban areasand 14.3 in rural areas).[1]According to 2010 data from theUnited Nations DevelopmentProgramme, an estimated 37.2% of Indians live below the country's national poverty line.[2]A

recent report by the Oxford Poverty and Human Development Initiative (OPHI) states that 8Indian states have more poor than 26 poorest African nations combined which totals to morethan 410 million poor in the poorest African countries.[3][4]According to a new UN MillenniumDevelopment Goals Report, as many as 320 million people in India and China are expected tocome out of extreme poverty in the next four years, while India's poverty rate is projected to dropto 22% in 2015.[5]The report also indicates that in Southern Asia, however, only India, where thepoverty rate is projected to fall from 51% in 1990 to about 22% in 2015, is on track to cutpoverty in half by the 2015 target date.[5]

The latest UNICEF data shows that one in three malnourished children worldwide are found InIndia 42 percent of children under five were underweight. It also showed that A total of 58

percent of children under five surveyed were stunted. Rohini Mukherjee Of the Naadi foundationone of the Ngos which published the report stated India is "doing worse than sub-SaharanAfrica,".[6]The 2011Global Hunger Index(GHI) Report ranked India 45th, amongst leadingcountries withhungersituation. It also places India amongst the three countries where the GHIbetween 1996 and 2011 went up from 22.9 to 23.7, while 78 out of the 81 developing countriesstudied, including Pakistan, Nepal, Bangladesh, Vietnam, Kenya, Nigeria, Myanmar, Uganda,Zimbabwe and Malawi, succeeded in improving hunger condition.[7]

Contents

[hide]

1 Poverty estimates 2 Impact of poverty 3 Causes

o 3.1 Caste systemo 3.2 India's economic policieso 3.3 Liberalization policies and their effects

4 Reduction in poverty 5 Efforts to alleviate poverty

o 5.1 Outlook for poverty alleviationo 5.2 Controversy over extent of poverty reductiono 5.3 Persistence of malnutrition among children

6 See also 7 References 8 Further reading 9 External links
http://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/World_Bankhttp://en.wikipedia.org/wiki/World_Bankhttp://en.wikipedia.org/wiki/World_Bankhttp://en.wikipedia.org/wiki/International_poverty_linehttp://en.wikipedia.org/wiki/International_poverty_linehttp://en.wikipedia.org/wiki/Purchasing_power_parityhttp://en.wikipedia.org/wiki/Purchasing_power_parityhttp://en.wikipedia.org/wiki/Purchasing_power_parityhttp://en.wikipedia.org/wiki/Poverty_in_India#cite_note-WB_Poverty-0http://en.wikipedia.org/wiki/Poverty_in_India#cite_note-WB_Poverty-0http://en.wikipedia.org/wiki/Poverty_in_India#cite_note-WB_Poverty-0http://en.wikipedia.org/wiki/United_Nations_Development_Programmehttp://en.wikipedia.org/wiki/United_Nations_Development_Programmehttp://en.wikipedia.org/wiki/United_Nations_Development_Programmehttp://en.wikipedia.org/wiki/United_Nations_Development_Programmehttp://en.wikipedia.org/wiki/Poverty_in_India#cite_note-1http://en.wikipedia.org/wiki/Poverty_in_India#cite_note-1http://en.wikipedia.org/wiki/Poverty_in_India#cite_note-1http://en.wikipedia.org/wiki/Poverty_in_India#cite_note-2http://en.wikipedia.org/wiki/Poverty_in_India#cite_note-2http://en.wikipedia.org/wiki/Poverty_in_India#cite_note-2http://en.wikipedia.org/wiki/Poverty_in_India#cite_note-indiatimes1-4http://en.wikipedia.org/wiki/Poverty_in_India#cite_note-indiatimes1-4http://en.wikipedia.org/wiki/Poverty_in_India#cite_note-indiatimes1-4http://en.wikipedia.org/wiki/Poverty_in_India#cite_note-indiatimes1-4http://en.wikipedia.org/wiki/Poverty_in_India#cite_note-indiatimes1-4http://en.wikipedia.org/wiki/Poverty_in_India#cite_note-indiatimes1-4http://en.wikipedia.org/wiki/Poverty_in_India#cite_note-5http://en.wikipedia.org/wiki/Poverty_in_India#cite_note-5http://en.wikipedia.org/wiki/Poverty_in_India#cite_note-5http://en.wikipedia.org/wiki/Global_Hunger_Indexhttp://en.wikipedia.org/wiki/Global_Hunger_Indexhttp://en.wikipedia.org/wiki/Global_Hunger_Indexhttp://en.wikipedia.org/wiki/Hungerhttp://en.wikipedia.org/wiki/Hungerhttp://en.wikipedia.org/wiki/Hungerhttp://en.wikipedia.org/wiki/Poverty_in_India#cite_note-6http://en.wikipedia.org/wiki/Poverty_in_India#cite_note-6http://en.wikipedia.org/wiki/Poverty_in_India#cite_note-6http://en.wikipedia.org/wiki/Poverty_in_Indiahttp://en.wikipedia.org/wiki/Poverty_in_Indiahttp://en.wikipedia.org/wiki/Poverty_in_Indiahttp://en.wikipedia.org/wiki/Poverty_in_India#Poverty_estimateshttp://en.wikipedia.org/wiki/Poverty_in_India#Poverty_estimateshttp://en.wikipedia.org/wiki/Poverty_in_India#Impact_of_povertyhttp://en.wikipedia.org/wiki/Poverty_in_India#Impact_of_povertyhttp://en.wikipedia.org/wiki/Poverty_in_India#Causeshttp://en.wikipedia.org/wiki/Poverty_in_India#Causeshttp://en.wikipedia.org/wiki/Poverty_in_India#Caste_systemhttp://en.wikipedia.org/wiki/Poverty_in_India#Caste_systemhttp://en.wikipedia.org/wiki/Poverty_in_India#India.27s_economic_policieshttp://en.wikipedia.org/wiki/Poverty_in_India#India.27s_economic_policieshttp://en.wikipedia.org/wiki/Poverty_in_India#Liberalization_policies_and_their_effectshttp://en.wikipedia.org/wiki/Poverty_in_India#Liberalization_policies_and_their_effectshttp://en.wikipedia.org/wiki/Poverty_in_India#Reduction_in_povertyhttp://en.wikipedia.org/wiki/Poverty_in_India#Reduction_in_povertyhttp://en.wikipedia.org/wiki/Poverty_in_India#Efforts_to_alleviate_povertyhttp://en.wikipedia.org/wiki/Poverty_in_India#Efforts_to_alleviate_povertyhttp://en.wikipedia.org/wiki/Poverty_in_India#Outlook_for_poverty_alleviationhttp://en.wikipedia.org/wiki/Poverty_in_India#Outlook_for_poverty_alleviationhttp://en.wikipedia.org/wiki/Poverty_in_India#Controversy_over_extent_of_poverty_reductionhttp://en.wikipedia.org/wiki/Poverty_in_India#Controversy_over_extent_of_poverty_reductionhttp://en.wikipedia.org/wiki/Poverty_in_India#Persistence_of_malnutrition_among_childrenhttp://en.wikipedia.org/wiki/Poverty_in_India#Persistence_of_malnutrition_among_childrenhttp://en.wikipedia.org/wiki/Poverty_in_India#See_alsohttp://en.wikipedia.org/wiki/Poverty_in_India#See_alsohttp://en.wikipedia.org/wiki/Poverty_in_India#Referenceshttp://en.wikipedia.org/wiki/Poverty_in_India#Referenceshttp://en.wikipedia.org/wiki/Poverty_in_India#Further_readinghttp://en.wikipedia.org/wiki/Poverty_in_India#Further_readinghttp://en.wikipedia.org/wiki/Poverty_in_India#External_linkshttp://en.wikipedia.org/wiki/Poverty_in_India#External_linkshttp://en.wikipedia.org/wiki/Poverty_in_India#External_linkshttp://en.wikipedia.org/wiki/Poverty_in_India#Further_readinghttp://en.wikipedia.org/wiki/Poverty_in_India#Referenceshttp://en.wikipedia.org/wiki/Poverty_in_India#See_alsohttp://en.wikipedia.org/wiki/Poverty_in_India#Persistence_of_malnutrition_among_childrenhttp://en.wikipedia.org/wiki/Poverty_in_India#Controversy_over_extent_of_poverty_reductionhttp://en.wikipedia.org/wiki/Poverty_in_India#Outlook_for_poverty_alleviationhttp://en.wikipedia.org/wiki/Poverty_in_India#Efforts_to_alleviate_povertyhttp://en.wikipedia.org/wiki/Poverty_in_India#Reduction_in_povertyhttp://en.wikipedia.org/wiki/Poverty_in_India#Liberalization_policies_and_their_effectshttp://en.wikipedia.org/wiki/Poverty_in_India#India.27s_economic_policieshttp://en.wikipedia.org/wiki/Poverty_in_India#Caste_systemhttp://en.wikipedia.org/wiki/Poverty_in_India#Causeshttp://en.wikipedia.org/wiki/Poverty_in_India#Impact_of_povertyhttp://en.wikipedia.org/wiki/Poverty_in_India#Poverty_estimateshttp://en.wikipedia.org/wiki/Poverty_in_Indiahttp://en.wikipedia.org/wiki/Poverty_in_India#cite_note-6http://en.wikipedia.org/wiki/Hungerhttp://en.wikipedia.org/wiki/Global_Hunger_Indexhttp://en.wikipedia.org/wiki/Poverty_in_India#cite_note-5http://en.wikipedia.org/wiki/Poverty_in_India#cite_note-indiatimes1-4http://en.wikipedia.org/wiki/Poverty_in_India#cite_note-indiatimes1-4http://en.wikipedia.org/wiki/Poverty_in_India#cite_note-2http://en.wikipedia.org/wiki/Poverty_in_India#cite_note-2http://en.wikipedia.org/wiki/Poverty_in_India#cite_note-1http://en.wikipedia.org/wiki/United_Nations_Development_Programmehttp://en.wikipedia.org/wiki/United_Nations_Development_Programmehttp://en.wikipedia.org/wiki/Poverty_in_India#cite_note-WB_Poverty-0http://en.wikipedia.org/wiki/Purchasing_power_parityhttp://en.wikipedia.org/wiki/International_poverty_linehttp://en.wikipedia.org/wiki/World_Bankhttp://en.wikipedia.org/wiki/India


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[edit] Poverty estimates

There has been no uniform measure of poverty in India.[8][9]ThePlanning Commission of Indiahas accepted theTendulkarCommittee report which says that 37% of people in India live belowthepoverty line(BPL).[10]

TheArjun SenguptaReport (from National Commission for Enterprises in the UnorganisedSector), based on data between the period 1993-94 and 2004-05, states that 77% of Indians liveon less than 20 a day (about $0.50 per day).[11]TheN.C. SaxenaCommittee report states, onaccount of calorific intake apart from nominal income, that 50% of Indians live below thepoverty line.[12]

A study by theOxford Poverty and Human Development Initiativeusing aMulti-dimensionalPoverty Index(MPI) found that there were 650 million people (53.7% of population) living inpoverty in India, of which 340 million people (28.6% of the population) were living in severepoverty, and that a further 198 million people (16.4% of the population) were vulnerable to

poverty.[13]421 million of the poor are concentrated in eightNorth IndianandEast IndianstatesofBihar,Chattisgarh,Jharkhand,Madhya Pradesh,Orissa,Rajasthan,Uttar PradeshandWestBengal. This number is higher than the 410 million poor living in the 26 poorestAfricannations.[14]The states are listed below in increasing order of poverty based on the Multi-dimensional Poverty Index.[15]

[show]MPIrank

StatesPopulation(in millions)

2007MPI

Proportionof poor

Averageintensity

Contribution tooverall poverty

Number ofMPI poor

(in millions)

Estimates by NCAER (National Council of Applied Economic Research) show that 48% of theIndian households earn more than 90,000 (US$1,795.5) annually (or more than US$ 3 PPP perperson). According to NCAER, in 2009, of the 222 million households in India, the absolutelypoor households (annual incomes below 45,000) accounted for only 15.6% of them or about 35million (about 200 million Indians). Another 80 million households are in income levels of45,00090,000 per year. These numbers also are more or less in line with the latest World Bankestimates of the below-the-poverty-line households that may total about 100 million (or about456 million individuals)[16]

[edit] Impact of poverty

Since the 1950s, theIndian governmentandnon-governmental organizationshave initiatedseveral programs to alleviate poverty, includingsubsidizingfood and other necessities, increasedaccess to loans, improvingagriculturaltechniques and price supports, and promoting educationandfamily planning. These measures have helped eliminatefamines, cutabsolute povertylevelsby more than half, and reducedilliteracyandmalnutrition.[17]
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Presence of a massive parallel economy in the form of black (hidden) money stashed in overseastax havens and underutilisation of foreign aid have also contributed to the slow pace of povertyalleviation in India.[18][19][20]

Although theIndian economyhas grown steadily over the last two decades, its growth has been

uneven when comparing different social groups, economic groups, geographic regions, and ruraland urban areas.[17][21]Between 1999 and 2008, the annualized growth rates forGujarat(8.8%),Haryana(8.7%), orDelhi(7.4%) were much higher than for Bihar (5.1%), Uttar Pradesh (4.4%),or Madhya Pradesh (3.5%).[22]Poverty rates in rural Orissa (43%) and rural Bihar (41%) areamong the world's most extreme.[23]

Despite significant economic progress, one quarter of the nation's population earns less than thegovernment-specifiedpoverty thresholdof 32 rupees per day (approximately US$ 0.6)[24].

According to a recently released World Bank report, India is on track to meet itspovertyreductiongoals. However by 2015, an estimated 53 million people will still live inextreme

povertyand 23.6% of the population will still live under US$1.25 per day. This number isexpected to reduce to 20.3% or 268 million people by 2020.[25]However, at the same time, theeffects of the worldwiderecessionin2009have plunged 100 million more Indians into povertythan there were in 2004, increasing the effective poverty rate from 27.5% to 37.2%.[26]

As per the 2001 census, 35.5% of Indian households availed of banking services, 35.1% owned aradio or transistor, 31.6% a television, 9.1% a phone, 43.7% a bicycle, 11.7% a scooter,motorcycle or amoped, and 2.5% a car, jeep or van; 34.5% of the households had none of theseassets.[27]According to Department of Telecommunications of India the phone density hasreached 33.23% by December 2008 and has an annual growth of 40%.[28]This tallies with thefact that a family of four with an annual income of 1.37 lakh rupees could afford some of these

luxury items.

[edit] Causes

Global wealth inequality is the main cause of poverty in India.[citation needed] The inseperability ofcorruption and the economy of third world countries is ignored by those who single corruptionout as the main problem in India. There is also a high population growth rate, althoughdemographers generally agree that this is a symptom rather than cause of poverty. While servicesand industry have grown at double digit figures, agriculture growth rate has dropped from 4.8%to 2%. About sixty percent of the population depends on agriculture whereas the contribution ofagriculture to the GDP is about eighteen percent.[29]The surplus of labour in agriculture has

caused many people to not have jobs. Farmers are a large vote bank and use their votes to resistreallocation of land for higher-income industrial projects.

[edit] Caste system

Further information:Caste system in India
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According to S. M. Michael,Dalitsconstitute the bulk of poor and unemployed.[30]According toWilliam A. Haviland,casteismis widespread in rural areas, and continues to segregateDalits.[31]Others, however, have noted the steady rise and empowerment of the Dalits throughsocialreformsand the implementation ofreservationsin employment and benefits.[32][33]

Caste explanations of poverty fail to account for the urban/rural divide. Using theUNdefinitionof poverty, 65% of ruralforward castesare below the poverty line.[citation needed]

[edit] India's economic policies

A rural worker dryingcow dunginBihar.

In 1947, the average annual income inIndiawas US$619, compared with US$439 forChina,US$770 forSouth Korea, and US$936 forTaiwan. By 1999, the numbers were US$1,818;US$3,259; US$13,317; and US$15,720, respectively.[34](numbers are in 1990 internationalMaddison dollars) In other words, the average income in India was not much different from

South Korea in 1947, but South Korea became a developed country by 2000s. At the same time,India was left as one of the world's poorer countries.

License Rajrefers to the elaborate licenses, regulations and the accompanyingred tapethat wererequired to set up and run business inIndiabetween 1947 and 1990.[35]The License Raj was aresult of India's decision to have aplanned economy, where all aspects of the economy arecontrolled by the state and licenses were given to a select few. Corruption flourished under thissystem.[36]

The labyrinthine bureaucracy often led to absurd restrictions - up to 80 agencies had to besatisfied before a firm could be granted a licence to produce and the state would decide what was

produced, how much, at what price and what sources of capital were used.BBC[37]

India had started out in the 1950s with:[38]high growth rates, openness to trade and investment, apromotional state, social expenditure awareness and macro stability but ended the 1980s with:[38]low growth rates, closure to trade and investment, a license-obsessed, restrictive state (LicenseRaj), inability to sustain social expenditures and macro instability, indeedcrisis.
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ty_in_India#cite_note-34http://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/Red_tapehttp://en.wikipedia.org/wiki/License_Rajhttp://en.wikipedia.org/wiki/Poverty_in_India#cite_note-desai-33http://en.wikipedia.org/wiki/Taiwanhttp://en.wikipedia.org/wiki/South_Koreahttp://en.wikipedia.org/wiki/Chinahttp://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/Biharhttp://en.wikipedia.org/wiki/Cow_dunghttp://en.wikipedia.org/w/index.php?title=Poverty_in_India&action=edit&section=5http://en.wikipedia.org/wiki/Wikipedia:Citation_neededhttp://en.wikipedia.org/wiki/Forward_castehttp://en.wikipedia.org/wiki/UNhttp://en.wikipedia.org/wiki/Poverty_in_India#cite_note-Mendelsohn-31http://en.wikipedia.org/wiki/Poverty_in_India#cite_note-Mendelsohn-31http://en.wikipedia.org/wiki/Reservation_in_Indiahttp://en.wikipedia.org/wiki/Social_reformhttp://en.wikipedia.org/wiki/Social_reformhttp://en.wikipedia.org/wiki/Poverty_in_India#cite_note-30http://en.wikipedia.org/wiki/Dalitshttp://en.wikipedia.org/wiki/Casteismhttp://en.wikipedia.org/wiki/Poverty_in_India#cite_note-29http://en.wikipedia.org/wiki/Dalits


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Poverty has decreased significantly since reforms were started in the 1980s.[39][40]

[edit] Liberalization policies and their effects

Other points of view hold that the economic reforms [clarification needed] initiated in the early 1990s

are responsible for the collapse of rural economies and the agrarian crisis currently underway. Asjournalist and the Rural Affairs editor forThe Hindu,P Sainathdescribes in his reports on therural economy inIndia, the level ofinequalityhas risen to extraordinary levels, when at the sametime, hunger in India has reached its highest level in decades. He also points out that ruraleconomies across India have collapsed, or on the verge of collapse due to theneo-liberalpoliciesof the government of India since the 1990s.[41]The human cost of the "liberalisation" has beenvery high.[clarification needed] The huge wave of farm suicides in Indian rural population from 1997 to2007 totaled close to 200,000, according to official statistics.[42]That number remains disputed,with some saying the true number is much higher. Commentators have faulted the policiespursued by the government which, according to Sainath, resulted in a very high portion of ruralhouseholds getting into the debt cycle, resulting in a very high number of farm suicides. As

professor Utsa Patnaik, Indias top economist on agriculture, has pointed out, the average poorfamily in 2007 has about 100 kg less food per year than it did in 1997.[42]

Government policies encouraging farmers to switch tocash crops, in place of traditional foodcrops, has resulted in an extraordinary increase in farm input costs, while market forcesdetermined the price of the cash crop.[43]Sainath points out that a disproportionately largenumber of affected farm suicides have occurred with cash crops, because with food crops such asrice, even if the price falls, there is food left to survive on. He also points out that inequality hasreached one of the highest rates India has ever seen. In a report byChetan Ahya, ExecutiveDirector atMorgan Stanley, it is pointed out that there has been a wealth increase of close toUS$1 Trillion in the time frame of 2003-2007 in theIndian stock market, while only 4-7% of the

Indian population hold anyequity.

[44]

During the time when Public investment in agricultureshrank to 2% of the GDP, the nation suffered the worst agrarian crisis in decades, the same timeas India became the nation of second highest number of dollar billionaires.[45]Sainath argues that

Farm incomes have collapsed. Hunger has grown very fast. Public investment in agricultureshrank to nothing a long time ago. Employment has collapsed. Non-farm employment hasstagnated. (Only the National Rural Employment Guarantee Act has brought some limited reliefin recent times.) Millions move towards towns and cities where, too, there are few jobs to befound.

In one estimate, over 85 per cent of rural households are either landless, sub-marginal, marginal

or small farmers. Nothing has happened in 15 years that has changed that situation for the better.Much has happened to make it a lot worse.

Those who have taken their lives were deep in debtpeasant households in debt doubled in thefirst decade of the neoliberal economic reforms, from 26 percent of farm households to 48.6per cent. Meanwhile, all along, India kept reducing investment in agriculture (standard neoliberalprocedure). Life was being made more and more impossible for small farmers.
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As of 2006, the government spends less than 0.2% of GDP on agriculture and less than 3% ofGDP on education.[46]However, some government schemes such as the mid-day meal scheme,and the NREGA have been partially successful in providing a lifeline for the rural economy andcurbing the further rise of poverty.

[edit] Reduction in povertyDespite all the causes, India currently adds 40 million people to its middle class every year.[citationneeded] Analysts such as the founder of "Forecasting International", Marvin J. Cetron writes that anestimated 300 million Indians now belong to the middle class; one-third of them have emergedfrom poverty in the last ten years. At the current rate of growth, a majority of Indians will bemiddle-class by 2025.

Despite government initiatives,corporate social responsibility(CSR) remains low on the agendaof corporate sector. Only 10 percent of funding comes from individuals and corporates, and "alarge part of CSR initiatives are artfully masqueraded and make it back to the balancesheet". The

widening income gap between the rich and the poor over the years, has raised fears of a socialbacklash.[47]

[edit] Efforts to alleviate poverty

Since the early 1950s, govt has initiated, sustained, and refined variousplanningschemes to helpthe poor attain self sufficiency in food production. Probably the most important initiative hasbeen the supply of basic commodities, particularly food at controlled prices, available throughoutthe country as poor spend about 80 percent of their income on food. The schemes have howevernot been very successful because the rate of poverty reduction lags behind the rapid population

growth rate.

[48]

[edit] Outlook for poverty alleviation

Eradication of poverty in India is generally only considered to be a long-term goal. Povertyalleviation is expected to make better progress in the next 50 years than in the past, as atrickle-down effectof the growing middle class. Increasing stress on education, reservation of seats ingovernment jobs and the increasing empowerment of women and the economically weakersections of society, are also expected to contribute to the alleviation of poverty. It is incorrect tosay that all poverty reduction programmes have failed. The growth of the middle class (whichwas virtually non-existent when India became a free nation in August 1947) indicates that

economic prosperity has indeed been very impressive in India, but the distribution of wealth isnot at all even.

After the liberalization process and moving away from the socialist model, India is adding 60 to70 million people to its middle class every year. Analysts such as the founder of "ForecastingInternational", Marvin J. Cetron writes that an estimated 390 million Indians now belong to themiddle class; one-third of them have emerged from poverty in the last ten years. At the current
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rate of growth, a majority of Indians will be middle-class by 2025. Literacy rates have risen from52 percent to 65 percent during the initial decade of liberalization (19912001).[citation needed]

[edit] Controversy over extent of poverty reduction

The definition of poverty in India has been called into question by the UNWorld FoodProgramme. In its report on global hunger index, it questioned the government of India'sdefinition of poverty saying:

The fact that calorie deprivation is increasing during a period when the proportion of ruralpopulation below the poverty line is said to be declining rapidly, highlights the increasingdisconnect between official poverty estimates and calorie deprivation.[49]

While total overall poverty in India has declined, the extent of poverty reduction is oftendebated. While there is a consensus that there has not been increase in poverty between 199394and 200405, the picture is not so clear if one considers other non-pecuniary dimensions (such as

health, education, crime and access to infrastructure). With the rapid economic growth that Indiais experiencing, it is likely that a significant fraction of the rural population will continue tomigrate toward cities, making the issue of urban poverty more significant in the long run.[50]

Some, like journalistP Sainath, hold the view that while absolute poverty may not haveincreased, India remains at an abysmal rank in the UNHuman Development Index. India ispositioned at 132ond place in the 2007-08 UN HDI index. It is the lowest rank for the country inover 10 years. In 1992, India was at 122ond place in the same index. It can even be argued that thesituation has become worse on critical indicators of overall well-being such as the number ofpeople who are undernourished (India has the highest number of malnourished people, at 230million, and is 94th of 119 in the world hunger index), and the number of malnourished children

(43% of India's children under 5 are underweight (BMI


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million or 51.3 percent in 1990 to 295 million or 23.6 percent by 2015 and 268 million or 20.3percent by 2020.[55]

A study by the McKinsey Global Institute found that in 1985, 93% of the Indian population livedon a household income of less than 90,000 rupees a year, or about a dollar per person per day; by

2005 that proportion had been cut nearly in half, to 54%. Thus, according to the report, between1985 and 2005, more than 103 million people have moved out of desperate poverty in urban andrural areas as well. They project that if India can achieve 7.3% annual growth over the next 20years, 465 million more people will be lifted out of poverty. Contrary to popular perceptions,rural India has benefited from this growth: extreme rural poverty has declined from 94% in 1985to 61% in 2005, and they project that it will drop to 26% by 2025. Report concludes thatIndia'seconomic reforms and the increased growth that has resulted have been the most successful anti-

poverty programmes in the country.[56][57][58]

[edit] Persistence of malnutrition among children

According to theNew York Times, is estimated that about 42.5% of the children in India sufferfrom malnutrition.[59]TheWorld Bank, citing estimates made by theWorld Health Organization,states that "About 49 percent of the world's underweight children, 34 percent of the world'sstunted children and 46 percent of the world's wasted children, live in India." The World Bankalso noted that "while poverty is often the underlying cause of malnutrition in children, thesuperior economic growth experienced by South Asian countries compared to those in Sub-Saharan Africa, has not translated into superior nutritional status for the South Asian child."[60]

A special commission to the Indian Supreme court has noted that the child malnutrition rate inIndia is twice as great as sub-Saharan Africa[61]

Data from The World Bank shows that the percentage of underweight children in sub-SaharanAfrica is 24% while India has almost twice the amount at 47%. Out of the 47%, 50 % were fromrural areas, 38% from urban areas, 48.9% of the underweight are girls and 45.5% are boys.[62]

Malnutrition is often associated with diseases like diarrhea, malaria and measles due to the lackof access in health care which are also linked to the problem of poverty. The United Nations hadestimated that 2.1 million Indian children die before reaching the age of 5 every yearfourevery minute.[63]

The Indian government had come up with the Integrated Childhood Development Service(ICDS) in 1975 to combat the problem of malnutrition in the country. ICDS is the worlds largest

child development program but its effects on the problem in India are limited.

[64]

This is becausethe program failed to focus on children under 3, the group that should receive the most help fromthe ICDS. This is due to the fact that most growth retardation would have developed during theage of 2 and are mostly irreversible.[65]With the lack of help, the chances that newborn babiesare unable to develop fully would be higher. The quality of ICDS centers also varies from statesto states and often, the states with the most serious problem of malnutrition have the lowestamount of help given.[64]Examples are Rajasthan, Uttar Pradesh, Bihar, Orissa and MadhyaPradesh, all rank in the bottom ten in terms of ICDS coverage.[65]Despite the poor distribution
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of help, the ICDS is still considered to be efficient in improving the health of the children in thecountry.[66]Statistics from UNICEF shows that the mortality rate of children under 5 hasimproved from 118 per 1000 live births in 1990 to 66 in the year 2009.[67]

However, malnutrition is still a problem for India; it has been found that micronutrient

deficiencies alone may cost India US$2.5 billion annually.

[68]

Malnutrition can lead to childrennot being able to attend school or perform to their fullest potential, which in turn leads to adecrease in labor productivity, affecting Indias economic growth as a whole.

A new World Bank paper - Thedeveloping world is poorer than we

thought but no less successful in thefight against poverty - indicates thatthe number of poor people in theworld is higher than previouslyestimated but the pace of povertyreduction remains the same.ReadPress ReleaseLearn what this means for IndiaRead Report and More

In this new paper, Martin Ravallion and

Shaohua Chen produce a major updateof poverty numbers for the developingworld between 1981 and 2005. Theglobal poverty numbers have beenupdated because a new internationalprice survey conducted in 2005 hasrevised upwards the cost of living datafrom an earlier survey in 1993. Based onthis new data, the old internationalpoverty line of $1.08 a day in 1993Purchasing Power Parity (PPP) prices

has been updated to a new internationalpoverty line of $1.25 a day in 2005 PPPprices. The paper also producesestimates for poverty levels at a-dollar-a-day in 2005 PPP prices. To assesprogress over time, the 2005 povertylines have been adjusted back to 1981using the best available consumer price

Video Interview with Martin Ravallion,Director of the Development ResearchGroup at the World Bank

1. In India, the share of people living in

poverty has reduced over time, but the totalnumber of poor people has gone up withpopulation growth. So is poverty rising inIndia, or falling? Has India's strong economicgrowth been strong enough?View Video >>

2. Is the story different when you look at justthe last 5 to 10 years as opposed to all theway back to 1981? And is India on track toachieve the first MDG to halve the 1990 rate

of poverty by 2015?View Video >>

3. What was the estimate of poverty in Indiabefore the new, improved data on cost ofliving allowed your recent revision, and whatis it now that you know more about the costof living?
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indices for each country.

Global Estimates: Using this new data,the paper finds that poverty levels acrossthe globe have declined, with 1.4 billion

people (one in four) in the developingworld living below US$1.25 a day in2005, down from 1.9 billion (one in two)in 1981. In other words, global povertyrates fell from 52% in 1981 to 26% in2005.

However, the paper also finds that thenumber of poor people in the world in2005at 1.4 billion - was higher thanthe earlier estimates based on the then

international poverty line of $1.08 in1993 PPP. This earlier estimate hadpegged the number of global poor in2005 at below 1 billion.

India Estimates: Similarly, estimatesfor India also indicate a continuingdecline in poverty. The revised estimatessuggest that the percentage of peopleliving below $1.25 a day in 2005(which, based on Indias PPP rate, works

out to Rs 21.6 a day in urban areasand Rs 14.3 in rural areas in 2005 )decreased from 60% in 1981 to 42% in2005. Even at a dollar a day ( Rs 17.2in urban areas and Rs 11.4 in ruralareas in 2005 ) poverty declined from42% to 24% over the same period.

Both the dollar a day and $1.25measures indicate that India has madesteady progress against poverty since the1980s, with the poverty rate declining ata little under one percentage point peryear. This means that the number of verypoor people who lived below a dollar aday in 2005 has come down from 296million in 1981 to 267 million in 2005.

However, the number of poor people

View Video >>

4. How does the cost of living data from Indiain 1993 compare with 2005? How significantis this difference?

View Video >>

5. Do countries typically use the WorldBank's international poverty lines in theirown reporting of poverty data? What's thedifference between national poverty lines andthe international poverty line?View Video >>

6. Which one is more frequently used, bywhom, and for what purposes?

View Video >>
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living under $1.25 a day has increasedfrom 421 million in 1981 to 456 millionin 2005. This indicates that there are alarge number of people living justabove this line of deprivation (a dollar

a day) and their numbers are notfalling.

To achieve a higher rate of povertyreduction, India will need to address theinequalities in opportunities that impedepoor people from participating in thegrowth process.

Poverty in India is a major issue. Rural Indians depend onunpredictable agriculture incomes, while urban Indians relyon jobs that are, at best, scarce.

Since its independence, the issue of poverty within India has remained a prevalent concern. As of2010, more than 37% of Indias population of 1.35 billion still lives below the poverty line. Morethan 22% of the entire rural population and 15% of the urban population of India exists in this

difficult physical and financial predicament.

Poverty Situation

The division of resources, as well as wealth, is uneven in India - this disparity creates differentpoverty ratios for different states. For instance, states such as Delhi and Punjab have low povertyratios. On the other hand, almost half the population in states like Bihar and Orissa live belowthe poverty line.

A number of factors are responsible for poverty in the rural areas of India. Rural populationsprimarily depend on agriculture, which is highly dependant on rain patterns and the monsoon

season. Inadequate rain and improper irrigation facilities can obviously cause low, or in somecases, zero production of crops.

Additionally, the Indian family unit is often large, which can amplify the effects of poverty.Also, the caste system still prevails in India, and this is a major reason for rural poverty - peoplefrom the lower casts are often deprived of the most basic facilities and opportunities. Thegovernment has planned and implemented poverty eradication programs, but the benefits ofthese programs are yet to bear fruits.
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Increasing Poverty in India

The phenomenal increase in population in the cities is one of the main reasons for poverty in theurban areas of India. A major portion of this additional population is due to the large scalemigration of rural families from villages to cities. This migration is mainly attributed to pooremployment opportunities in villages.

Since 1970, the Indian government has implemented a number of programs designed to eradicatepoverty, and has had some success with these programs. The government has sought to increasethe GDP through different processes, including changes in industrial policies. There is a PublicDistribution System, which has been effective to some extent. Other programs include theIntegrated Rural Development Program, Jawahar Rozgar Yojana and the Training Rural Youthfor Self Employment (TRYSEM), and other on-going initiatives.

Causes of poverty in IndiaFrom traditions to globalization

Coming a long way...?

The causes of poverty in India are nothing short ofcomplex but a lot of progress has been made to tacklethem.

So, this article will focus more specifically whats beendone to alleviate poverty so far and what is still holdingthings back.

The economic reforms of 1991, despite spurring a hugegrowth of the economy, have left the country with terrible inequalities, within cities as well asbetween urban and rural areas.

They were the best opportunity to seriously tackle the causes of poverty in India and morespecifically rural poverty. With two thirds of the population living in rural areas and some 500million poor (or more), even urban poverty stems from the rural migrations to the city.
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Agriculture is the key

This means that the government should have in priority overhauled the agricultural sector. Byimproving agricultural productivity it would have directly alleviated poverty by the hundreds ofmillions (just like in China did in the 1990s).

But what happened it totally different. Governments gave a disproportionate priority to the citiesand the services sector (notably banking, insurance, finance, real estate and IT services), thustrying to leapfrog the usual pattern of economic development: from agriculture to manufacture toservices (in terms of importance in the economy).

Economic reforms & causes of poverty inIndia

Don't forget manufacturing

The thing with manufacturing is that, when well-handled, it literally provides hundreds of millions ofjobs to workers coming from the rural exodus.

After what you usually invest in education and bring theemergence of the services sector.

Too small services sector

Right now, at this stage of development the services andespecially IT and finance sector typically dont employa lot of people.

Although the tertiary sector (services) represents 50% of Indias GDP, it employs only...2million people! So many Indians are quite right to complain that globalization and modernizationbenefit only the rich.

Neglecting the poor, once more

However the manufacturing sector is finally growing, so there are good prospects to reduce the

massive unemployment and hence tackle one of the causes of poverty in India. But that leavesthe problem of rural poverty.

To compare once more with China, the Chinese government has the merit to have very graduallyopened its country and markets to the outside world rather than a shock therapy. This meansthat it kept for more than a decade its rural safety nets, giving time to people to adapt to thetransition and changes.
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On the other hand India just left its rural poor on their own, and their opposition to globalizationis in fact very typical: every developing country where social safety nets were quasi-absent hasin general a defiant population to the global process.

Lack of decent housing

On the bright side, as manufacturing develops, so does the tertiary sector which now providesservices supporting the former such as better infrastructure, transports, and personal services.Plus, the services sector has a much greater positive impact on poverty than manufacturing, so itsgrowth and expansion is but good news for tackling the causes of poverty in India(unemployment, quality job and income in this case).

Despite that and the development of real estate sector, hundreds of millions still lack a decenthome so there should be incentives for the market to cater to the needs of the poor with socialhousing so that the country gets a chance to solve the problem of its gigantic slums.

Market liberalization and globalization

If you were to believe what international organizations have professed for years in the context ofthe"Washington Consensus", then youd say (among other things) that pure economic growthsystematically leads to less poverty.

However plenty of examples now prove that (partly) wrong, including in this case where growthand liberalization have contributed to the causes of poverty in India. They have exacerbatedinequalities within the population and reduced the role of the state while it was direly needed todevelop the country.

In this sense growth itself risks stirring some tensions within a country between those who gotrich and those who were left out.

Killing the state when you need it

Theres nothing wrong with market liberalization in itself but in a developing country it can bedisastrous because market forces will only invest in profitable areas which leaves plentyexcluded in the country.

The role of the state here is thus one of empowering citizens and making sure they canparticipate in the economy and growth of the country.

Resisting globalization

Another dilemma with the globalization-liberalization duo is that typically it wipes out the leastcompetitive companies in a given market. While this is a necessary evil if India is to adapt toglobalization, the country should have nevertheless focused on protecting its laid-off workerswho didnt ask for anything and certainly didnt vote for that. Nurturing their capability to adaptand better absorb shocks should have been a priority of anti-poverty policies.
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One way to do so would have been to invest in education, as the countrys share of GDP ineducation is far from enough and below that of other developing countries and regions such asChina and Latin America. Education and training are by essence empowering tools that assistpeople for life, they develop their skills and ability to better respond to change.

Land ownership & rural poverty

Faith in growth vs. reality

The example of India has shown many that if growthdoes give opportunities to some to get out of poverty,its also true that it doesnt prevent people from fallinginto poverty.

The two trendsgetting out and into povertyseemcompletely unrelated, or at least becoming poor is notconnected to growth.

Health among the main causes of poverty in India

Thus many experts have argued that to make the most out of economic growth, the governmentat all levels should have invested in protecting the people, that is to say invest in public services,for instance in health care.

Diseases are one of the main causes of poverty in India, creating a major public safety disaster in

India that contributes to keep and make millions fall into poverty. Its estimated that each year,the cost of health care pushes some 39 million people back into poverty, according to a recentCBS News report.

Land inequality and social justice

What the government needs is precisely to make sure that the people can also ripe the benefits ofthe economic growth. So even if the growth in the third sector is impressive, theres still a hugesurplus of jobless or underemployed workers at the countryside. And over there, the issue of landinequality is an important bone of contention that if resolved could substantially alleviatepoverty.

The fact is that for each village, a few land owners have most of the land which they rent to otherpeople to work on, at ridiculously high prices. Its a bit like the rent seekers in feudal societies:they prevent any real growth from happening and just suck up all the money - that they dontreinvest since they dont care all that much about the land itself.

Not only is the situation stuck because of this, but land inequalities also reflect the hugeimbalance of power carved in the rural society.


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Distributed land - a marker of development

Nearly all the developed countries have shown at some point a pattern of very well-distributedland ownership (at least within the rural population), where up to 70 to 80% of the population

would own the land (rather than 5% for example).

From then on, economic development happened on the basis of more equal societies. But owningland also has a huge impact on agricultural productivity as people are generally willing to investonly in land they own and exploit for themselves. This increase in agricultural productivity thenmeans more growth and less poverty at the same time.

Getting the foundations right

After that, people start nurturing their physical and human capital, their kids can afford school,and the household gains higher social status, thus reducing social inequalities and problems of

access to resources. So as you can see, land distribution is closely tied to economic power, socialpower and social status.

The only little snag is that it takes a decade or two for the effects of land reforms to be felt in theeconomy, and long term prospect is usually a poor incentive in modern politics.

Landowners and powerful pressure groups

In fact theres another great hurdle: landowners. Ever since Indias independence, land reformshave been on and off the political agenda and every time successfully thwarted by the efforts oflandowners, although sometimes rightfully as the state had plans to strip them of their landwithout any compensation.

Then again local officials, working hand in hand with property developers, have often achievedto expel countless poor farmers of their house without compensation, or pay, or notice. It justhappened overnight. But doing that to richer farmers would of course upset the power structurein the society, which remains one the causes of poverty in India by creating systemicdiscrimination.

Land grabs in India

In any case, big land owner or small poor one, you just dont go and take peoples land withoutpaying compensation for what youre doing. And its not about paying a few symbolic rupees asit happens so often. It should be something more significant, up to an annual compensation - areal and fair incentive.

In the end youre taking the land to generate a great deal of wealth, so you could at least play itfair. In a so-called democracy, if private property is not respected, if theres no law, then peoplehave very limited incentives to invest in their land and make it more profitable. They distrusttheir government and politicians and make it even more difficult to implement any policy at the


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end of the day.

Today India still lacks the basic administrative and legal frameworks to make property transferspossible, or easier, in order to keep on implementing decades old land reforms.

Lack of institutions at all

The state is one more time responsible for contributing to poverty in India. It has failed to lookbeyond growth by leaving the rural exodus happen on its own, without planning whatsoever.

That is to say, that even while Indians came to the city by tens of millions, there was hardly anyinstitution present to help them make the transition and find a job in this whole new world. Or ahouse rather than some makeshift accommodation in the slums (but that would have impliedplanning housing for everyone, which requires a lot of work, so...).

Overall those who have been doing better than others are overwhelmingly Indians who receivedhelp from personal connections from the city. Having a friend or a parent, someone who knowshis way around the city is invaluable help for any newcomer and a life-changing advantage.

As for the rest of the people thats just too bad for them.

Discriminations: hidden causes of poverty in India

Caste-based segregation

The Constitution of India has officially abolished the system of caste in the country a while ago(1950), and yet its hard to get rid of an age-old system that organizes society.

Its particularly for the dalits (150 million people)aka the Untouchables or Harijansthatthings prove difficult. Being the out-caste caste (i.e. so low in the social hierarchy thattechnically they don't belong to any caste), theyve never even got a chance to work inagriculture. Everyone from landowners to local farmers look down on them and refuse them jobson the ground of stereotypes such as they dont work, they steal.

Caste warfare

Segregation can become quite intense when the whole society puts its mind to it. Indians areobviously not evil, but as in any society that struggles with huge poverty, social classes vie f

Poverty is Widespread in India

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