This is a presentation of Chapter Number 4 of Indian Economic Development of XII CBSE.

1. POVERTY
XII - CBSE

2. INTRODUCTION
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Providing minimum basic needs to the people and reduction of Poverty have
been the major aims of Independent India. Poverty is a challenge not only for
India, but for the entire world. Poverty is widespread social evil.

3. HEADLINES
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4. 4
1. MEANING OF POVERTY
2. WHO ARE THE POOR?
3. CHARACTERISTICS OF POOR PEOPLE
4. CONCEPT OF POVERTY LINE
5. CRITICISM OF POVERTY LINE
6. ABSOLUTE POVERTY
7. RELATIVE POVERTY
8. CATEGORISING POVERTY
9. NUMBER OF POOR IN INDIA
10.CAUSES OF POVERTY
11.POVERTY ALLEVIATION PROGRAMME
12.CRITICAL ASSESSMENT OF PAP

5. HELLO!
I am SOHIL GAJJAR
I am here because I love to teach Economics
5
#Think Economics Think Sohil Sir

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7. MEANING OF POVERTY
Poverty is a state in which the people do not have sufficient income
to fulfill basic necessities of life like food, clothing and shelter.
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8. WHO ARE THE POOR?
Poverty is a great curse on humanity. The treatment that he gets
from the society, demoralises him. Poverty is a harsh reality for a
large section of the Indian population. Poverty in India has been
studies from two points:-
 Urban Poor
 Rural Poor
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9. URABN POOR
The urban poor work as
 Casual labourers,
 Doing variety of jobs on roadsides,
 Push cart vendors,
 Rickshaw pullers,
 Domestic servants
 Street cobblers etc.
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10. RURAL POOR
The rural poor work mainly as
 Landless agricultural labourers,
 Cultivators with very small landholdings,
 Landless labourers who are engaged in wide variety of non-
agricultural jobs.
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11. CHARACTERISTICS OF
POOR PEOPLE
1. Hunger, Malnutrition and Starvation:- Starvation and hunger are the
basic problems of the poorest households. Malnutrition is alarmingly high
among the poor.
2. Poor Health:- They are generally physically weak due to ill health, disability
or serious illness. Their children are less likely to survive or be borne
healthy.
3. Limited Economic Opportunities:- Due to lack of literacy and skills they
face unstable employment. They are not able to negotiate their legal wages
from employers and are exploited.
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12. CHARACTERISTICS OF
POOR PEOPLE
4. Debt Trap:- They borrow money from money lenders, who charge high
rates of interest, that push them into chronic indebtedness.
5. Gender Inequalities:- Gender inequalities prevails within the family in
regard to participation of gainful employment, education and decision
making.
6. Bigger Families:- The poor families are bigger in size which make their
economic condition worse.
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13. POVERTY LINE
Poverty line is a cut-off line of distribution, which usually divides
the population of the country as poor and non-poor.
The Concept of poverty line is used to measure the extent of
poverty in a country:-
 People having income below the poverty line are called
“Poor” &
 People with income above poverty line are called
“Non-Poor”.
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14. DETERMINATION OF POVERTY LINE
1. Minimum Calorie Intake:-The Planning Commission has defined poverty
line on the basis of recommended nutritional requirements.
 Rural Areas:- 2400 Calories per person per day
 Urban Areas:- 2100 Calories per person per day
High calorie intake has been fixed for rural areas because the rural worker
has to do greater physical work as compared to the urban worker.
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15. DETERMINATION OF POVERTY LINE
2. Monthly Per Capita Consumption Expenditure/Monetary Value of
Minimum Calorie Intake:- The monetary expenditure needed for meeting these
calorie requirements is revised upward periodically taking into consideration the
rise in prices of consumption goods.
According to the Tendulkar Committee Report, for 2004-2005, the estimation of
Poverty Line was Rs. 447 Monthly Per Capita Consumption Expenditure for Rural areas
and Rs. 579 for Urban areas.
Further, for 2009-10, the Poverty Line is estimated as an MPCE of 673 for Rural
areas and Rs. 860 in Urban areas.
In July, 2013, the Planning Commission redefined the Poverty Line. Now people
who spend less Rs. 27.20 a day [816 in Month] in Rural areas and Rs. 33.33 a day [1,000 in
Month] in Urban areas will be considered below Poverty Line. 15

16. RANGARAJAN COMMITTEE
The Planning Commission constituted an Expert Group under the Chairmanship
of Dr. C. Rangarajan in June 2012 to Review the Methodology for Measurement of
Poverty. The Rangarajan Committee submitted its report in June 2014. It
recommended separate consumption baskets for rural and urban areas.
According to the recommendation methodology of Rangarajan Committee, the
Tendulkar national Rural poverty line has been raised from Rs. 816 per capita
per month at 2011-12 prices to Rs. 972 per capita per month and the Urban
poverty line from Rs. 1,000 per capita per month to Rs. 1407 per capita per
month.
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17. BIG
CONCEPT
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18. CRITICISM OF MPCE
 A major problem with this mechanism is that it groups all the poor together and does
not differentiate between the very poor and the other poor. This mechanism is helpful
in identifying the poor as a group to be taken care of by the government but it would
be difficult to identify who among the poor need help the most.
 There are many factors other than income and assets, which are associated with
poverty, for instance, the accessibility to basic education, health care, drinking water,
and sanitation These have been ignored
 The mechanism for determining poverty line also does not take into consideration
social factors that trigger and perpetuate poverty such as illiteracy, ill health, lack of
access to resources, discrimination or lack of civil and political freedoms
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MPCE

19. ABSOLUTE POVERTY
When we fix up a particular criterion or a cut-off point which we call the poverty
line and we look at the number living below the poverty line, we are looking at
absolute poverty.
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20. RELATIVE POVERTY
Relative poverty refers to the income or assets position of one class of people
compared to the others or of one individual vis-a-vis the other. Thus, some
people or a class of persons that have lower income than the other group or
persons are relatively poor, even when they may be enjoying reasonably good
living standards.
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21. CATEGORIZING POVERTY
Chronic Poor/Structural Poor:-
This category includes two types of Poor:-
Those who are 'always poor' and
Those who are 'usually poor'.
Transient Poor/Temporary Poor:-
This Category includes two types of Poor:-
The churning poor are those who regularly pull in and out of
poverty (small farmers and seasonal workers).
Those who are occasionally poor when they run into a patch of bad luck
The non-poor are those who are never poor. 21

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Chronic Poor:- People who are always poor and those who are usually poor but who may sometimes
have a little more money (example: casual workers) are grouped together as the chronic poor.
Poverty Line _______________________________________________________________________________________________
Specific
Category Always Poor Usually Poor
Aggregate
Category Chronic Poor

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Transient Poor: Transient poor consists of both occasionally poor and churning poor.
Churning Poor: They are the people who regularly move in and out of poverty (example: small
farmers and seasonal workers).
Occasionally poor: This category includes those who are rich most of the time but may sometimes have a
patch of bad luck.
Poverty Line __________________________________________________________________________________________
Specific
Category Churning Poor Occasionally Poor
Aggregate
Category Transient Poor

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Non-Poor:- They are those who are never poor and they are the non-poor.
Poverty Line ____________________________ Always above the poverty line; never poor
Non-Poor

25. CAUSES OF POVERTY
1. BRITISH RULE
 There was substantial de-industrialization in India under the British rule.
 British policies involved sharply raising rural taxes that enabled merchants and
money lenders to become large landowners, who exploited the people by way of
low wages, high interest on loans etc.
 Our industries worked to produce goods at low prices for the British.
 Indian farmer were forced to grow more of cash crops and export food grains
that fetch revenue for the British.
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26. CAUSES OF POVERTY
2. UNEQUAL DISTRIBUTION OF LAND
Since Independence, the government has attempted to redistribute land
and has taken land from those who have large amounts to distribute it to those
who do not have any land, but work on the land as wage labourers. However, this
move was successful only to a limited extent as large sections of agricultural
workers were not able to form the small land holdings that they now possessed
as they did not have either money (assets) or skills to make the land productive
and the land holdings were too small to be viable.
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27. CAUSES OF POVERTY
3. FRAGMENTATION OF LAND HOLDINGS
The per head availability of land for cultivation has steadily declined
leading to fragmentation of land holdings. The income from these small land
holdings is not sufficient to meet the family's basic requirements.
4. SLOW INDUSTRIAL GROWTH/UNEMPOYMENT
The urban poor in India are largely the overflow of the rural poor who
migrate to urban areas in search of employment and a livelihood.
Industrialization has not been able to absorb all these people. Most of the urban
poor are either unemployed or intermitters.
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28. CAUSES OF POVERTY
5. INFLATION: A steep rise in the price of food grains and other
essential goods.
6. INEQUALITIES OF INCOME: The unequal distribution of income and assets
has also led to the persistence of poverty in India.
7. POPULATION
8. ILLITERACY
9. DEBT TRAP
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29. GROWTH
ORIENTED
APPROACH
MINIMUM
SOCIAL
NEEDS
PROGRAMME
POVERTY
ALLEVIATION
PROGRAMME
GOVERNMENT APPROACH TO REMOVE POVERTY/
APPROACHES TO TACKLE POVERTY
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POVERTY

30. GROWTH OREINTED APPROACH
This approach believed that the effect of rapid
growth would spread to all sections of society
and will trickle down to the poor sections
also. It was felt that rapid industrial
development and transformation of
agriculture through green revolution in select
regions would benefit the underdeveloped
regions and the more backward sections of
the community.
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31. TRICKLE DOWN AFFECT
Trickle down effect is an economic theory that
says that the growth of gross domestic product
and per capita income by allowing the rich to
flourish would eventually benefit lower income
groups also through increased economic activity
and reduced unemployment. It was government's
approach to poverty reduction. It was felt that
rapid industrial development and transformation
of agriculture through green revolution would
benefit the underdeveloped regions and the more
backward sections of the community. 31

32. POVERTY ALLEVIATION PROG.
It is also known as employment generation programmes. Income and
employment for the poor could be raised through the creation of incremental
assets and by means of work generation. So a number of programmes were
started from the Third Plan period onwards.
Examples of self employment generation programmes are:
Rural Employment Generation Programme (REGP)
Prime Minister's Rozgar Yojna (PMRY)
Swama Jayanti Shahari Rozgar Yojna (SJSRY)
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MAIN POVERTY ALLEVIATION
PROGRAMMES IN INDIA
SELF EMPLOYMENT
PROGRAMMES
WAGE EMPLOYMENT
PROGRAMMES
RURAL EMPLOYMENT
GENERATION PROGRAMME[REGP]
PRIME MINISTER ROZGAR
YOJANA [PMRY]
SWARNA JAYANTI SHAHRI
ROZGAR YOJANA [SJSRY]
SAMPOORNA GRAMEEN
ROZGAR YOJANA [SGRY]
SWARNA JAYANTI GRAM
SWROZGAR YOJANA [SGSY]
MAHATMA GANDHI NATIONAL
RURAL EMPLOYMENT
GUARANTEE ACT [MNERGA]

34. SELF-EMPLOYMENT PROGRAMME
▰ Rural Employment Generation Programme (REGP) aims at creating self-
employment opportunities in rural areas and small town The Khadi and Village
Industries Commission is implementing it.
▰ Prime Minister s Rozgar Yojana (PMRY) gives financial help to set up any kind of
enterprise that generates employment to the educated unemployed from low income
families in rural and urban areas.
▰ Swarna Jayanti Shahari Rozgar Yojana (SJSRY) mainly aims at creating
employment opportunities, both self-employment and wage-employment, in urban
areas. It is centrally sponsored scheme.
▰ Swarna Jayanti Gram Swarozgar Yojana [SGSY]:- It aims at promoting micro
enterprises and to bring assissted poor families [Swarozgaris] above the poverty line,
by organizing them into Self Help Group. 34

35. WAGE EMPLOYMENT PROGRAMME
▰ MGNREGA:- The National Rural Employment Guarantee Act [NREGA] came into force
on February 2, 2006. It covers all rural areas of the country. From October 2, 2009 it
was renamed as Mahatma Gandhi National Rural Employment Guarantee Scheme. It
provides guaranteed wage employment to every household whose adult volunteer is
to do unskilled manual work for a minimum of 100 days in a year.
▰ Sampoorna Grameen Rozgar Yojana (SGRY) The objectives of the Programme is to
provide additional wage employment in the rural areas, food security, alongside the
creation of durable community, social and economic infrastructure in the rural areas.
The programme is self-targeting in nature with special emphasis to provide Wage
Employment to women, scheduled castes, scheduled tribes and parents of children
withdrawn from hazardous occupations.
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36. MINIMUM NEEDS PROGRAMME
Through public expenditure on social consumption needs—provision of food grains at
subsidized rates, education, health, water supply and sanitation—people's living standard
could be improved. Programmes under this approach are expected to supplement the
consumption of the poor, create employment opportunities and bring about
improvements in health and education.
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PROGRAMMES FOR PROVIDING
BASIC AMENITIES TO THE POOR
PUBIC DISTRIBUTION SYSTEM [PDS]
MID DAY MEAL SCHEME [MDM]
NATIONAL SOCIAL ASSISTANCE
PROGRAMME [NSAP]
INTEGRATED CHILD DEVELOPMENT
SERVICES [ICDS]
PRADHAN MANTRI JAN DHAN
YOJANA [PMJDY]

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PUBLIC DISTRIBUTION SYSTEM [PDS]: The basic objective of the PDS in India is to
provide essential consumer goods at cheap and subsidized prices to the consumers so as
to insulate them from the impact of rising prices of these commodities.
INTEGRATED CHILD DEVELOPMENT SERVICES: ICDS, launched in 1975, is a Centrally
sponsored scheme implemented by the Ministry of Human Resource Development. It is
one of the largest child intervention programmes in the world with a holistic package of
six basic services for children up to 6 years of age. These services are:-
 Supplementary Feeding
 Immuization
 Health Check –Ups
 Referral Services
 Health and Nutrition Education to adult women and
 Non- Formal Pre-School Education to 3-6 years-old.

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MID-DAY MEAL: The national programme of nutritional support to primary
education, commonly known as the Mid-Day- Meal Scheme launched in 1995, is
a nationwide central scheme intended to improve enrolment and regular
attendance and reduce dropouts in school. It is also intended to improve the
nutritional status of school children. MDM is the world’s largest school feeding
programme reaching out more than 11 crore children in over 12 lakh schools
across the country.
NATIONAL SOCIAL ASSISTANCE PROGRAMME: NSAP was launched on August
15, 1995. Under this programme, elderly people who do not have anyone to
take care of them are given pension to sustain themselves. Poor women who are
destitute and widows are also covered under this scheme.

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PRADHAN MANTRI JAN DHAN YOJANA:- PMJDY was launched on August 28, 2014. Its
objective is to ensure access to various financial services like availability of basic savings
bank account, access to need-based credit, remittances facility, insurance and pension to
the excluded sections, i.e. weaker sections and low income groups.
The scheme envisages universal access to banking facilities with at least one basic
banking account for every household. The major features of PMJDY includes:-
 The facility to open basic savings bank deposit account in any bank branch.
 Accidental insurance cover of Rs. 1 Lakh
 Life Insurance cover of Rs. 30,000
 An overdraft facility after satisfactory operation of the account for six months.
Pradhan Mantri Jan Dhan Yojana made
it to Guinness World Records;
A record 11.5 cr accounts opened. India
is now fully banked, the feat which was
much-appreciated by the Guinness Book
of World Records for getting it
accomplished in only five months.

41. CRITICAL ASSESSMENT OF PAP
The poverty alleviation programmes initiated by the government
have not met with much success. The reasons for the failure can be
attributed to:
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1. The amount of resources/funds
allocated for these programmes
were not sufficient.
2. Lack of proper implementation
by the government officials who
are corrupt, dishonest and
untrained.

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3. Without the basic infrastructure,
it is difficult to implement these
programmes, especially in rural
areas.
4. Non-participation of the local
level institutions in programme
implementation.

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5. Lack of active participation of the
poor.
6. It was difficult to identify who
are the poorest who are most in
need of help.

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