POVERTY AS A CHALLENGE CLASS IX ECONOMICS CHAPTER 3 NOTE WITH EXERCISE

 

CLASS- IX                ECONOMICS

 

03.   POVERTY AS A CHALLENGE

Chapter Outline

·       Two typical cases of poverty

o   Urban case

o   Rural case

·       Poverty analysis by social scientists

·       Indicators of poverty

o   Social Exclusion

o   Vulnerability

·       Poverty Line

·       Poverty Line Estimation in India

·       Organisations Involved in Estimating Poverty Line

·       Poverty Trends In India

·       Group Vulnerable to Poverty

·       Story of Sivaraman

·       Inter-State Disparities

·       Global Poverty Scenario

·       Anti-Poverty Measures

o   Promotion of Economic Growth

o   Targeted Anti-Poverty Programmes

·       The Challenges to Poverty Reduction

 

Overview

This chapter focuses on one of the major challenges faced by independent India — poverty. It explains the multidimensional nature of poverty through real-life examples and describes how social scientists analyse it. The chapter also covers:

• Poverty trends in India and the world using the concept of the poverty line.

• Causes of poverty and various anti-poverty programmes started by the government.

• Finally, it expands the meaning of poverty from just lack of income to a wider concept of human poverty.

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Introduction

In daily life, we see many people who are poor — like landless labourers in villages or families living in overcrowded jhuggis (slums) in cities.
To study this issue, NITI Aayog uses the Multidimensional Poverty Index (MPI), which considers factors beyond income, such as education, health, and living standards.

• In 2005–06, around 55% of India’s population was multidimensionally poor.

• This dropped to 25% in 2015–16, and further to 15% in 2019–21.

• It is expected that India’s multidimensional poverty will soon reach single digits, showing significant progress.

Two Typical Cases of Poverty

Urban Case – Ram Saran (Ranchi, Jharkhand)

• Ram Saran, 33 years old, works as a daily-wage labourer in a flour mill.

• His monthly income is around ₹3,500 (when employed regularly).

• His wife earns ₹1,500 as a part-time maid, and their elder son adds ₹700 by working in a tea shop.

• The family of six lives in a one-room rented house in a crowded basti.

• They eat dal and rice twice a day, but the food is never sufficient.

• Children have only a few old clothes; shoes and new clothes are luxuries.

• The family faces irregular income, malnutrition, overcrowding, and lack of basic needs.

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Rural Case – Lakha Singh (Meerut, Uttar Pradesh)

• Lakha Singh’s family is landless and depends on daily labour for big farmers.

• Work is uncertain, and they earn around ₹200 per day or get paid in kind (wheat, dal, vegetables).

• The family of six struggles for two meals a day and lives in a kuchha hut.

• His father died of tuberculosis due to lack of medical care; his mother is also ill.

• The family cannot afford soap, oil, or new clothes.

• Though Lakha is illiterate, he is happy that his children attend school.

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Dimensions of Poverty Highlighted

These two stories reflect multiple dimensions of poverty, including:

• Landlessness: No ownership of land or property.

• Unemployment: Irregular or no permanent work.

• Large family size: More dependents and higher expenses.

• Low literacy: Limited education restricts job opportunities.

• Poor health and nutrition: Malnutrition and untreated diseases.

• Helplessness: Lack of power, dignity, and access to basic services.

Poverty, therefore, is not just lack of money — it also means hunger, lack of shelter, poor health, limited education, unsafe living conditions, and social neglect.

Mahatma Gandhi emphasized that true independence would come only when the poorest are free from human suffering.

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Poverty as Seen by Social Scientists

Social scientists view poverty as a multidimensional problem — not only related to income and consumption, but also to other aspects of life.

Indicators Used

1. Health Indicators:

   • Nutrition

   • Child and adolescent mortality

   • Maternal health

2. Education Indicators:

   • Years of schooling

   • School attendance

3. Standard of Living Indicators:

   • Cooking fuel

   • Sanitation

   • Drinking water

   • Housing

   • Electricity

   • Assets

   • Bank account

Other important aspects include social exclusion and vulnerability — how people are deprived or discriminated against in society.

Together, these indicators form the National Multidimensional Poverty Index (MPI) used by NITI Aayog to measure poverty in India.

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Social Exclusion

Meaning

• Social exclusion means poverty should not only be seen as lack of money or material resources, but also as being cut off from the rest of society.

• Poor people often live in poor surroundings with others like them, excluded from the benefits and opportunities that richer people enjoy.

Key Features

• It is both a cause and a consequence of poverty.

• It is a process where individuals or groups are denied access to facilities, benefits, and opportunities such as:

  • Good education

  • Decent housing

  • Health care

  • Social respect

• Example: In India, the caste system has historically excluded certain castes from equal opportunities and participation in society.

Impact

• Social exclusion can cause more harm than just having a low income because it affects a person’s dignity, confidence, and chances of progress.

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Vulnerability

Meaning

• Vulnerability to poverty refers to the greater likelihood of certain groups or individuals becoming or remaining poor.

• It means being more at risk when difficult situations arise — such as natural disasters, illness, or job loss.

Who Are Vulnerable?

• People with fewer assets (like land, house, savings)

• Those with less education or poor health

• Members of backward castes or communities

• Widows, elderly people, or physically handicapped persons

Factors Determining Vulnerability

1. Economic factors – lack of steady income, assets, or employment options.

2. Social factors – discrimination, unequal access to opportunities.

3. Environmental factors – exposure to natural disasters like floods or earthquakes.

4. Ability to cope – weaker groups have less means to recover from crises.

Example

During a flood or fall in job availability, vulnerable groups are affected more severely and take longer to recover compared to others.

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🟩 Poverty Line

Meaning

• The poverty line is the minimum level of income or consumption required to meet basic needs such as food, clothing, housing, education, and healthcare.

• A person is considered poor if their income or consumption falls below this minimum level.

Key Points

• The poverty line varies with time and place, depending on a country’s development and living standards.

  • Example: Not owning a car may be considered poverty in the U.S., but in India, it is still seen as a luxury.

Determination of Poverty Line in India (Earlier Method)

• Based on minimum food requirement, clothing, footwear, fuel and electricity, education, and medical needs.

• These needs were calculated in physical quantities and converted into rupee value using market prices.

• Food-based calorie requirement formed the core of the calculation:

  • Rural areas: 2,400 calories per person per day

  • Urban areas: 2,100 calories per person per day

• Rural calorie needs were higher because people in villages usually do more physical labour.

• The money needed to buy this food quantity became the poverty line income, revised regularly based on inflation and price rise.

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🟩 Shift to a New Method – Multidimensional Poverty Index (MPI)

• To align with global practices, India now also uses the National Multidimensional Poverty Index (MPI).

• The MPI goes beyond income and directly measures deprivation in different areas of life.

Indicators Used (12 Development Indicators grouped under 3 dimensions):

1. Health: Nutrition, child/adolescent mortality, maternal health.

2. Education: Years of schooling, school attendance.

3. Standard of Living: Cooking fuel, sanitation, drinking water, housing, electricity, assets, and bank account.

➡️ The MPI complements the income-based poverty line by showing who is deprived and in what way.

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💬 Let’s Discuss

1. Difference between Consumption-based Poverty Line and MPI:

   • Consumption-based: Measures poverty through income and expenditure.

   • MPI: Measures multiple deprivations (health, education, living standards).

2. Minimum Necessary Level (varies by locality):

   • Could include safe drinking water, clean housing, basic education, healthcare, and sufficient food depending on local cost and lifestyle.

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🟩 Poverty Estimates in India

Head Count Ratio (HCR):

• The proportion of people below the poverty line is called the Head Count Ratio.

Trends:

Period	Type of Measurement	Proportion of Poor	Key Point
1990s	Consumption-based	↓ from 45% to 37%	Number of poor stayed around 40 crore
2000–2011	Consumption-based	Both proportion and number of poor declined
2015–2021	Multidimensional	↓ from 25% to 15%	About 13.5 crore people escaped poverty

• Rural poverty declined faster than urban poverty, especially in areas like health, housing, and sanitation.

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🟩 Inter-State Disparities

Meaning

• Poverty in India is not evenly spread across all states.

• Some states have very low poverty levels, while others still have a higher proportion of poor people.

Trends

• Since the early 1970s, all states have shown a decline in poverty, but the rate of decline differs from one state to another.

States with Low Poverty (less than 10% HCR in 2019–21):

• Karnataka

• Tamil Nadu

• Delhi

• Punjab

• Himachal Pradesh

• Andhra Pradesh

• Haryana

• Maharashtra

These states have performed better in reducing poverty due to faster economic growth and better human development.

States with Major Improvements:

• Bihar, Uttar Pradesh, Madhya Pradesh, and Rajasthan
  → These states, once among the poorest, have made remarkable progress in recent years.

Examples of State Initiatives:

• Kerala: Focused on human resource development (education, health).

• West Bengal: Implemented land reforms to benefit the poor.

• Andhra Pradesh & Tamil Nadu: Strengthened the Public Distribution System (PDS) for food security.

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🟩 Vulnerable Groups

Meaning

• Poverty levels also differ among social and economic groups.

• Certain groups face a greater risk of being poor — they are called vulnerable groups.

Social Groups Most Affected:

1. Scheduled Tribes (STs) – about 43% below poverty line.

2. Scheduled Castes (SCs) – about 29% below poverty line.

Economic Groups Most Affected:

1. Rural agricultural labourers – about 34% poor.

2. Urban casual labourers – about 34% poor.

Key Observation

• People who are both socially and economically disadvantaged (like landless SC or ST labourers) suffer double disadvantage — socially excluded and economically weak.

Positive Trend

• During the 1990s, poverty among SCs, rural agricultural labourers, and urban casual workers declined,
  but it remained high among Scheduled Tribes.

Inequality Within Families

• Even within poor families, not everyone suffers equally.

  • Women, elderly, and female infants often get less food, education, and healthcare, showing gender and age-based inequality.

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🟩 Global Poverty Scenario

Is India the Only Country with Poor People?

• No, poverty exists in many countries around the world.

• To compare poverty between countries, international organisations like the World Bank use a uniform standard.

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International Poverty Line

• The World Bank defines extreme poverty as living on less than $2.15 per person per day (in terms of purchasing power parity).

• This means the minimum amount required to meet basic needs in any country is measured in U.S. dollars to allow global comparison.

• Each country has its own currency, but the U.S. dollar is used as a common international measure.

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Global Trends

• Worldwide extreme poverty has declined from 16.27% in 2010 to 9.05% in 2019.

• However, the reduction is uneven — different regions have progressed at different rates.

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Regional Trends

🌏 1. China and Southeast Asia

• Achieved massive reduction in poverty due to:

  • Rapid economic growth

  • Large investments in human resource development (education & health)

• The proportion of poor in China dropped to just 0.1% in 2020 — almost eliminating poverty.

🇮🇳 2. South Asia

• Includes India, Pakistan, Sri Lanka, Nepal, Bangladesh, Bhutan, Afghanistan, and Maldives.

• Poverty declined from 13% in 2017 to 11% in 2021.

• The number of poor fell from 233 million (2017) to 207 million (2021).

🌍 3. Sub-Saharan Africa

• Still the poorest region in the world.

• Poverty reduced slightly from 36.6% in 2017 to 35% in 2019 — progress is slow.

🌎 4. Latin America and the Caribbean

• Poverty has increased slightly, from 4.4% in 2017 to 4.6% in 2021 — mainly due to economic slowdown and inequality.

🌐 5. Former Socialist Countries (like Russia)

• Poverty has resurfaced at around 3% in 2000, though earlier it was officially non-existent under socialism.

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🟩 Poverty and Sustainable Development Goals (SDGs)

🌍 United Nations’ Global Mission

• The United Nations (UN) has set Sustainable Development Goals (SDGs) to be achieved by 2030.

• The main aim is to end poverty in all its forms, ensure peace, prosperity, and protect the planet.

• There are 17 SDGs in total, forming a shared blueprint for a better future.

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🎯 Goal 1: No Poverty

• Goal 1 of the SDGs aims to end poverty everywhere, in all its forms and dimensions.

• One specific target under this goal is:
  ➤ To reduce by at least half the proportion of men, women, and children living in poverty (by 2030).

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🤝 Role of Developed and Developing Countries

• The SDGs require joint efforts by both developed and developing nations.

• Developed countries are expected to:

  • Support developing nations financially and technically.

  • Help in ending poverty.

  • Promote health, education, and equality.

  • Address climate change and promote sustainable development.

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🏛️ United Nations’ Role

• The UN works with member countries to implement the SDGs.

• Each goal is divided into specific targets for countries to achieve.

• The UN monitors progress and encourages cooperation among nations.

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🇮🇳 India’s Commitment

• India is actively working towards achieving Goal 1 – No Poverty.

• The decline in India’s poverty rate shows the country’s commitment to the SDG target.

• India focuses on improving healthcare, education, job opportunities, and social welfare to uplift poor people.

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🟥 Causes of Poverty in India

🏛️ 1. Historical Reasons

• The British colonial rule is a major historical cause.

• Their policies:

  • Ruined traditional industries (like handicrafts and textiles).

  • Discouraged industrial development.

• This led to low economic growth, fewer job opportunities, and low income levels.

• The high population growth further increased the burden on limited resources.

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🌾 2. Uneven Impact of Green Revolution

• The Green Revolution created jobs in agriculture, but its benefits were limited to some regions only (like Punjab, Haryana, and western UP).

• Other areas continued to face low productivity and unemployment.

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🏭 3. Limited Industrial Growth

• Both public and private sectors created jobs, but not enough to absorb all job seekers.

• Many people migrated to cities and took up low-paying informal jobs like:

  • Rickshaw pullers

  • Street vendors

  • Construction workers

  • Domestic servants

• Due to low and irregular income, they started living in slums, making urban poverty a major problem.

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⚖️ 4. Income Inequality and Unequal Distribution of Land

• Land and resources in India are unevenly distributed.

• Land reforms were planned but not effectively implemented in most states.

• This caused huge income inequality and continued poverty among rural poor.

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💰 5. Indebtedness

• Poor people often borrow money at high interest rates to meet:

  • Agricultural needs (seeds, fertilizers, pesticides)

  • Social obligations (weddings, festivals, religious functions)

• Due to low income, they cannot repay loans, becoming trapped in debt.

• Thus, indebtedness is both a cause and effect of poverty.

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👨‍👩‍👧 6. Socio-Cultural Factors

• People, even the poor, spend on social and religious ceremonies, which reduces savings.

• This wasteful spending worsens their financial condition.

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🟦 Anti-Poverty Measures

🎯 Main Objective

• Removal of poverty has always been a major goal of India’s development plans.

• The present anti-poverty strategy has two main components:

  1. Promotion of economic growth

  2. Targeted anti-poverty programmes

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📈 1. Economic Growth and Poverty Reduction

• From the 1950s to early 1980s, India’s growth was slow (about 3.5% per year) — poverty remained around 45%.

• Since the 1980s, growth increased to 6% and more, helping to reduce poverty.

• Rapid growth in the 2000–2020 period further reduced poverty.

• Economic growth → more job opportunities → better incomes → less poverty.

✅ Growth also helps in:

• Increasing investment in education and health.

• Encouraging school enrolment (especially of girls).

• Improving living standards.

⚠️ However:

• Agriculture growth has been below expectations, and most poor people depend on agriculture, so targeted programmes are still needed.

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🎯 2. Targeted Anti-Poverty Programmes

🟢 (i) Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), 2005

• Provides 100 days of wage employment to every rural household.

• Ensures livelihood security and promotes sustainable development.

• One-third of the jobs are reserved for women.

• Works on reducing drought, deforestation, and soil erosion.

• Wages for unskilled workers are revised regularly.

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🟡 (ii) Pradhan Mantri Poshan Shakti Abhiyan (PM Poshan)

(Earlier known as Mid-Day Meal Scheme)

• Aims to:

  • Improve nutrition levels (calories and proteins).

  • Increase school enrolment and reduce dropouts.

• Targets students of Classes I–VIII in government and aided schools.

• Encourages children from poor families to attend school regularly.

• Implemented with the help of local governments and community groups.

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🟠 (iii) Pradhan Mantri Surakshit Matritva Abhiyan (PMSMA), 2016

• Aims to reduce maternal and infant mortality.

• Provides quality antenatal care to pregnant women across India.

• Ensures safe pregnancies and deliveries.

• Services are available on the 9th day of every month.

• Involves private doctors volunteering at government health facilities.

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🔴 (iv) Pradhan Mantri Ujjwala Yojana (PMUY), 2016

• Focuses on women empowerment and health improvement.

• Provides free LPG connections (with first refill and stove) to BPL households, including:

  • Scheduled Castes & Tribes

  • Forest dwellers

  • Marginalised groups

• Promotes smoke-free kitchens, reducing respiratory diseases and eye problems.

• Connections issued in the name of women.

• Encourages clean fuel use, reduces deforestation and carbon emission.

• Saves women’s time, helping them engage in education and employment.

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🟦 The Challenges Ahead

📉 1. Poverty Decline but Challenges Remain

• Poverty in India has certainly declined, but eliminating it completely remains a major challenge.

• There are wide disparities:

  • Between rural and urban areas

  • Among different states

  • Across social and economic groups

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⚠️ 2. Vulnerable Sections

• Certain groups like Scheduled Castes, Scheduled Tribes, rural labourers, and casual urban workers remain more vulnerable to poverty.

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🌱 3. Factors Supporting Poverty Reduction

• Higher economic growth

• Universal education

• Declining population growth

• Empowerment of women

• Upliftment of weaker sections of society

All these can help build a better and more equal India.

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💭 4. Rethinking Poverty: Beyond Income

• The income-based definition of poverty captures only the minimum needs (food, clothing, shelter).

• True poverty is not just lack of money, but also lack of:

  • Education

  • Healthcare

  • Shelter and job security

  • Self-confidence and dignity

  • Freedom from caste and gender discrimination

  • End of child labour

Thus, poverty should be understood as “human poverty”, not just “income poverty.”

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🌍 5. Changing Definition of Poverty

• As development increases, the definition of poverty also changes — people expect not just survival, but a decent and dignified life.

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📊 6. India’s Progress

• The National Multidimensional Poverty Index (MPI) by NITI Aayog shows:

  • A decline in the number and proportion of poor people in India.

  • This progress is due to government initiatives and social programmes.

 

 

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1. How is the poverty line estimated in India?

• Poverty line in India is estimated on the basis of income or consumption expenditure.

• Earlier, it was based on minimum calorie requirement:

  • 2400 calories per person per day in rural areas

  • 2100 calories per person per day in urban areas

• The cost of food, clothing, fuel, housing, education, and medical needs was calculated in rupees.

• Families spending less than this amount were considered below the poverty line (BPL).

• Now, India also uses the National Multidimensional Poverty Index (MPI) based on 12 indicators like health, education, and living standards.

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2. Do you think that the present methodology of poverty estimation is appropriate?

• The consumption-based method measures only income poverty.

• It does not consider education, health, sanitation, or social exclusion.

• Hence, it gives a limited view of poverty.

• The Multidimensional Poverty Index (MPI) is more appropriate as it measures multiple deprivations directly.

✅ Conclusion: The MPI-based estimation is more comprehensive and realistic.

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3. Describe poverty trends in India since 1993.

• In 1993–94, about 45% of India’s population was below the poverty line.

• It declined to 37% by 2004–05.

• By 2011–12, it fell to about 22%.

• According to the National Multidimensional Poverty Index (2015–2021), poverty further declined from 25% to 15%.

• Around 13.5 crore people have escaped multidimensional poverty during this period.
  ✅ Trend: Continuous decline in poverty but with unequal distribution across states and groups.

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4. Discuss the major reasons for poverty in India.

1. Colonial exploitation – British policies destroyed handicrafts and industries.

2. Low economic growth in early decades of independence.

3. Unequal distribution of land and wealth.

4. Rapid population growth increasing pressure on resources.

5. Unemployment and underemployment.

6. Social obligations and ceremonies leading to indebtedness.

7. Ineffective implementation of land reforms and welfare policies.

8. Indebtedness – both a cause and consequence of poverty.

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5. Identify the social and economic groups which are most vulnerable to poverty in India.

• Social groups:

  • Scheduled Tribes (STs)

  • Scheduled Castes (SCs)

• Economic groups:

  • Rural agricultural labourers

  • Urban casual labourers

✅ Other vulnerable people: women, elderly, and female children in poor families.

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6. Give an account of interstate disparities of poverty in India.

• Poverty varies from state to state.

• Low poverty states (below 10% HCR):
  Karnataka, Tamil Nadu, Delhi, Punjab, Himachal Pradesh, Andhra Pradesh, Haryana, Maharashtra.

• High poverty states:
  Bihar, Uttar Pradesh, Madhya Pradesh, Rajasthan — but these have shown significant improvement.

• Reasons for differences:

  • Development strategies adopted

  • Human resource development (Kerala)

  • Land reforms (West Bengal)

  • Public distribution of food grains (Tamil Nadu, Andhra Pradesh)

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7. Describe global poverty trends.

• Global poverty has declined sharply in recent decades.

• People living below $2.15 per day fell from 16.27% (2010) to 9.05% (2019).

• China and Southeast Asia: Massive reduction due to rapid growth.

• South Asia (including India): Declined from 13% (2017) to 11% (2021).

• Sub-Saharan Africa: Declined slightly from 36.6% (2017) to 35% (2019).

• Latin America and Caribbean: Slight increase from 4.4% to 4.6%.
  ✅ Global poverty reduction is uneven—Asia succeeded more than Africa.

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8. Describe the role of government in reducing poverty in India.

Government adopted two strategies:

1. Promoting economic growth

   • Rapid industrialisation and agricultural growth (Green Revolution)

   • Creation of job opportunities

2. Targeted anti-poverty programmes

   • MGNREGA (2005): 100 days guaranteed rural employment

   • PM Poshan (Mid-Day Meal): Improves nutrition and school attendance

   • PM Surakshit Matritva Abhiyan: Maternal and infant health care

   • PM Ujjwala Yojana: Free LPG connection for BPL families
     ✅ These programmes directly address hunger, unemployment, and social development.

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9. What do you understand by human poverty?

• Human poverty goes beyond income or consumption levels.

• It means lack of basic human capabilities, such as:

  • Education and literacy

  • Health and nutrition

  • Shelter and job security

  • Freedom from discrimination and exploitation
    ✅ In short, human poverty = deprivation of opportunities to live a dignified and meaningful life.

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10. Who are the poorest of the poor?

• The poorest of the poor are those who suffer the most within poor families.

• Usually includes:

  • Women

  • Elderly people

  • Female infants
    ✅ They have the least access to food, health care, and education.

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11. What are the main features of the Mahatma Gandhi National Rural Employment Guarantee Act, 2005 (MGNREGA)?

1. Provides 100 days of guaranteed wage employment to every rural household.

2. Ensures livelihood security.

3. Promotes sustainable development (drought prevention, afforestation, soil conservation).

4. One-third of jobs reserved for women.

5. Wages revised regularly by the government.

6. Promotes self-reliance and rural asset creation.

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12. Differentiate between consumption-based poverty line and NMP Index-based poverty estimates.

Basis	Consumption-based Poverty Line	National Multidimensional Poverty Index (MPI)
Focus	Income and expenditure	Multiple deprivations
Indicators	Food, clothing, shelter, fuel, etc.	Health, education, and living standards
Method	Based on calorie intake and cost	Based on 12 developmental indicators
View of Poverty	Narrow – focuses only on money	Broad – includes quality of life
Example	2400 calories (rural), 2100 (urban)	NITI Aayog MPI report

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13. List the indicators used to estimate multidimensional poor in India.

Three main dimensions and their indicators:

Dimension	Indicators
Health	1. Nutrition 2. Child & adolescent mortality 3. Maternal health
Education	4. Years of schooling 5. School attendance
Standard of Living	6. Cooking fuel 7. Sanitation 8. Drinking water 9. Housing 10. Electricity 11. Assets 12. Bank account

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