MAINS BATCH (BCW) ECONOMICS (Poverty)
POVERTY
Previous Year Questions :-
Quotes on Poverty
❖ Poverty is pronounced deprivation in well-being, and comprises many dimensions. - ( World
Bank)
❖ Poverty is the worst form of violence - (Mahatma Gandhi)
❖ Poverty anywhere is a threat to prosperity everywhere.
❖ Overcoming poverty is not a gesture of [Link] is an act of [Link] is the protection of a
fundamental human right, the right to dignity and a decent life" - ( Nelson Mandela )
❖ The poor are not poor because they are lazy, they are poor because they do not have access
to the things that could make them richer. - ( Abhijeet Bannerjee )
❖ Poverty is not just lack of money; it is not having capabilities to realize one's full potential as
human beings. ( Amartya Sen)
What is Poverty?
Poverty is generally defined as a condition of deprivation where individuals or communities lack the
financial resources, basic necessities, and opportunities needed to meet their basic needs for a decent
standard of living. This can include access to food, clean water, shelter, healthcare, education, and
employment.
The World Bank defines poverty as the inability to attain a minimum standard of living. This standard
of living typically includes access to basic necessities such as food, clean water, shelter, education, and
healthcare. Poverty can manifest in various forms, including income poverty (measured by income
levels), multidimensional poverty (which considers factors like education, health, and living
standards), and extreme poverty (often defined as living on less than $1.90 per day, adjusted for
purchasing power parity).
In India, 21.9% of the population lives below the national poverty line (Tendulkar Methodology)
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MAINS BATCH (BCW) ECONOMICS (Poverty)
Poverty Estimation in India
Pre-Independence Poverty Estimation
• Early attempts to quantify poverty in India date back to the late 19th and early 20th centuries.
Dadabhai Naoroji, in his seminal work "Poverty and Unbritish Rule in India" (1901), introduced
the concept of a poverty line based on the cost of a subsistence diet, estimating it at ₹16 to ₹35
per capita per year. This laid the groundwork for subsequent discussions on poverty
measurement.
• The National Planning Committee, chaired by Jawaharlal Nehru in 1938, proposed a poverty line
of ₹15 to ₹20 per capita per month, focusing on a minimum standard of living. Meanwhile, the
Bombay Plan in 1944 suggested a poverty line of ₹75 per capita per year, reflecting evolving
perspectives on poverty in India.
Post-Independence Poverty Estimation
• Following independence, efforts to measure poverty in India intensified, with various expert
committees contributing to the discourse.
• The Planning Commission Expert Group in 1962 introduced separate poverty lines for rural and
urban areas, set at ₹20 and ₹25 per capita per year, respectively, reflecting regional disparities in
living costs.
• VM Dandekar and N Rath's landmark study in 1971 marked the first systematic assessment of
poverty using National Sample Survey data. They advocated for providing 2250 calories per day
in both rural and urban areas, emphasizing nutritional needs as a key factor in poverty
measurement.
• The YK Alagh Committee in 1979 focused on nutritional requirements in constructing poverty
lines for rural and urban areas, underscoring the importance of adequate food intake in poverty
alleviation strategies.
• The Lakdawala Committee in 1993 emphasized the calculation of consumption expenditure
based on calorie consumption, advocating for state-specific poverty lines to better reflect
regional variations in living costs.
• The Tendulkar Committee in 2009 introduced the current official measures of poverty in India,
with poverty lines set at daily expenditure of ₹27.2 in rural areas and ₹33.3 in urban areas.
However, these thresholds have been criticized for being too low to accurately capture the true
extent of poverty.
• NITI AYOG’s MPI is latest innovative way to measure poverty in India.
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MAINS BATCH (BCW) ECONOMICS (Poverty)
Current Levels of Poverty in India
• 24.82 crore people escaped multidimensional poverty in last nine years. Findings of NITI Aayog’s
Discussion Paper ‘Multidimensional Poverty in India since 2005-06’.
• India has registered a significant decline in multidimensional poverty in India from 29.17% in
2013-14 to 11.28% in 2022-23 i.e. a reduction of 17.89 percentage points.
• As per Multi-Dimensional Poverty Index Report 2025, Score of India is 0.069 which translates in
Head Count ratio as 16.4
• In 2022-23, Head count ratio of multi-dimensionally poor in Bihar is 26.59%
• 3.77 Crore Biharis escaped the poverty trap between 2019-21 to 2022-23 as per Niti-Aayog
report.
Causes of Poverty in India
Poverty in India is a multifaceted issue influenced by various socio-economic, political, and cultural
factors. Understanding the diverse causes is crucial for developing effective strategies to alleviate
poverty.
1. Historical Factors
• Colonial Exploitation : India's colonial history, marked by exploitation of resources and oppressive
policies, has left a lasting impact on its economy and social structure, contributing to entrenched
poverty.
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• Feudalism: Traditional feudal structures, characterized by land ownership concentration and
exploitation of labor, have perpetuated socio-economic disparities, particularly in rural areas.
2. Economic Factors
• Unequal Distribution of Resources: Disparities in land ownership, access to education, healthcare,
and financial resources contribute to widening income gaps and perpetuate poverty.
• Unemployment and Underemployment: Limited job opportunities, particularly in the formal
sector, coupled with a growing population, result in high levels of unemployment and
underemployment, especially among youth and marginalized communities.
• Agricultural Distress: Dependence on agriculture as a primary livelihood source, coupled with
issues such as land degradation, water scarcity, and unpredictable weather patterns, leads to
agricultural distress and farmer indebtedness.
3. Social Factors
• Caste System : The caste-based social hierarchy perpetuates discrimination and exclusion,
limiting opportunities for upward mobility among lower caste groups, particularly in rural areas.
• Gender Inequality : Women face systemic barriers to education, employment, and property
ownership, leading to their disproportionate representation among the poor.
• Social Exclusion : Marginalized communities, including Scheduled Castes, Scheduled Tribes, and
religious minorities, often face systemic discrimination and lack access to basic services,
exacerbating poverty.
4. Political Factors:
• Governance Issues : Corruption, inefficiency, and lack of accountability in governance contribute
to misallocation of resources and hinder effective implementation of poverty alleviation
programs.
• Policy Priorities : Inadequate prioritization of social welfare and development programs, coupled
with skewed economic policies favoring elite interests, perpetuate socio-economic inequalities
and hinder poverty reduction efforts
5. Environmental Factors
• Climate Change : Increasing frequency and intensity of natural disasters, coupled with
environmental degradation, threaten livelihoods, particularly in vulnerable rural communities
dependent on agriculture.
Example – In Bihar, 27 out of 38 districts is flood affected.
• Resource Depletion : Overexploitation of natural resources, such as water and forests,
exacerbates environmental degradation and undermines sustainable livelihoods, particularly
among marginalized communities.
Vicious Cycle of Poverty
The vicious cycle of poverty is a self-reinforcing loop that traps people in low-income situations for
generations.
• Limited Resources : Poverty starts with a lack of basic resources like money, education,
healthcare, and proper housing.
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MAINS BATCH (BCW) ECONOMICS (Poverty)
• Impact on Capabilities : This lack of resources hinders a person's ability to improve their situation.
For example, poor nutrition from inadequate food intake can lead to health problems, making it
difficult to work or attend school.
• Low Earning Potential : Limited education and health issues restrict people from getting high-
paying jobs, further limiting their income.
• Passing it On : Children born into poverty often lack access to quality education and healthcare,
repeating the cycle for the next generation.
(Note: - Kindly update the facts from Bihar Economic survey 2024-25 as explained by faculty in class video)
Causes for Poverty in Bihar
Cause Explanation
Agrarian Issue Low productivity, Marginal land holdings (91%
of Bihari people have landholding < 1 hectare)
Poor Industrialization Poor growth of secondary sector which is
labour intensive
Frequent Natural Disasters North Bihar is prone to floods while south
Bihar is prone to droughts leading to displacement.
Poor Education & Employability Outdated curriculum and Poor educational
infrastructure.
Social Inequities Caste-based and social disparities restricting access
to resources and opportunities for
marginalized communities.
Governance Issues Historical governance challenges hindering effective
implementation of development
policies.
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MAINS BATCH (BCW) ECONOMICS (Poverty)
Government Schemes for Poverty Alleviation
Healthcare Social Security and Financial Employment Entrepreneurship
Empowerment Inclusion and Skill
and Development
Welfare
Ayushman Bharat Pradhan Mantri PM Jan VB-G RAM G Act PM MUDRA
Yojana Garib Kalyan Anna Dhan ( 125 Days of Yojana
Yojana (PMGKAY) Yojana Guranteed wage
Employment)
Pradhan Mantri JEEVIKA Bihar PM Mukhyamantri
Bharatiya Janaushadhi (10.58 LAKH) Shatabdi Kaushal Mahila Udyami
Pariyojana Unorganized Vikas Yojana
(PMBJP) Sector Yojana
Workers
and Artisans
Social Security
Pradhan Mantri PDS (Public Atal Kaushal Mukhyamantri
Matru Vandana Yojana Distribution Pension Yuva Minority Udyami
(PMMVY) System) Yojana Programme Yojana
Launched in 2017
Cash Assistance to
pregnant &
lactataing women.
Rs. 5K for 1st child
& Rs. 6K for second
child, if second
child is gift.
Poshan Abhiyaan Jal Jeevan PM Shram National Bihar Small
Launched in 2018, for Mission (In Yogi Apprenticeshi Entrepreneurs
holistic nutritional 2024-25, Maandhan p Promotion Yojana
improvement among 244901 Yojana Scheme
children, pregnant hectare of
women & lactating land was
women. made for
As of 2026, 14.03 Agriculture)
lakh Anganwadi
centres are
operational.
Jal-Jeevan- Hariyali PM Kisan PM SVANidhi
Abhiyan Maandhan
Yojana
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Krishi Input subsidy PM Deendayal
scheme Ujjwala Antyodaya
to deal with Yojana Yojana –
excess rain/ National Rural
drought Livelihood
Assistance of Mission (DAY-
Rs. 8500 per NRLM)
hectare for un-
irrigated land
and Rs. 17000
per hectare for
irrigated land.
PM Awas Yojana Saubhagya Bihar Laghu Udyami
(Rural and Yojana Yojana
Urban) In 2024-25, Rs.
1000Cr allotted
to help poor
household open
enterprises
Rs. 2 lakh
assistance.
Mukhyamantri Niji
Nalkup Yojana
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