# GSEB Class 12 Economics Notes Chapter 5 Poverty

This GSEB Class 12 Economics Notes Chapter 5 Poverty covers all the important topics and concepts as mentioned in the chapter.

## Poverty Class 12 GSEB Notes

Meaning of Poverty:

• If a larger population is living below the minimum required standard of living, there exist poverty.
• Poverty being a relative concept, its meaning changes with time, place and society.

1. Traditional meaning of Poverty OR Income Poverty:
A certain normative minimum level of per capita consumption expenditure required to ascertain minimum basic needs and services is called poverty line.

• People who have less than required income or spend less than required minimum expenditure are said to be poor.
• Thus, poverty is a state of scarcity.
• Poverty line shows the situation of non-availability of food or starvation.
• Poverty is not only the situation of starvation. It includes apart from food other necessities required for minimum standard of living.

2. Modern meaning of Poverty OR Non-income Poverty:

• For minimum required ‘ standard of living, apart from food, other necessities such as clothing, housing, education, health, cleanliness, pure drinking water are also required. This modern approach of poverty is called non-income poverty.
• In modern approach of poverty, with income other important elements of human development such as knowledge, long and healthy life, good standard of living, individual freedom, availability of opportunity, life with choices and self-respect, etc. are also considered.

Nature of Poverty:
1. Absolute Poverty:

• The minimum expenditure or income required to satisfy the minimum basic needs and services is known as poverty line. The population having income or expenditure below this poverty line Eire said to be absolutely poor.
• Absolute poverty is also known as complete poverty.

2. Relative Poverty:

• In the concept of relative poverty, income inequality existing in different groups of people living in society is considered. Therefore lower income class is considered poor than the higher income class. For example, a person earning ₹ 3 lakhs per year is poor relatively to the person earning ₹ 4 lakhs per year. But the same person is not poor relative to the other person who is earning ₹ 2.50 lakhs per year.
• Poverty Line: Poverty line is an arbitrary line denoting the minimum income or expenditure required to satisfy primary necessities of life. Those living blow the line are called poor, and those living above the line are not poor.

Measures of Poverty Line:
1. Measure of Indian Council of Medical Research:
Minimum calories:

• Rural Area: 2400 calories per person per day
• Urban Area: 2100 calories per person per day

2. Measure of Planning Commission:
Minimum expenditure:

• Base year: 1960-61; ₹ 20 per capita per month

3. Measure of Dandekar and Rath:
Minimum expenditure:

• Base year: 1960 – 61
• Rural Area: ₹ 15 per capita per month
• Urban Area:₹ 22.50 per capita .per month

4. Measure of Prof. D. T. Lakdawala:
Per capita consumption expenditure for the year 1993:

• Base year: 1973 – 74
• Rural Area: ₹ 49 per capita per month
• Urban Area: ₹ 57 per capita per month

5. Measure of Prof. Suresh Tendulkar:
Per capita consumption expenditure (Calories + Education + Health) in the year 2011 – 12:

• Rural Area: ₹ 816 per capita per month
• Urban Area: ₹ 1000 per capita per month

6. International measure:
According to World Bank, Daily expenditure based on purchasing power parity:

• Year 2005:1.25$(Dollar) per day • Year 2015:1.90$ (Dollar) per day

Measurement of Absolute poverty in India:
1. Tendulkar Committee:

• 2004-05: 37.2%,
• 2011 – 12: 21.9%

2. According to Planning Commission:
Among various states of India

• Goa: Lowest poverty 5.09 %
• Chhattisgarh: Highest poverty 39.93 %

Indicators of Poverty:
1. Low per capita consumption expenditure: In developing countries, this expenditure is much lower than that of the developed countries. Therefore, developing countries are poor.

2. Level of malnutrition: In India, due to unequal distribution of income, people with low income are unable to get nutritive food, which is the indication of poverty. According to FAO 2015 report, India ranked 2nd in the world in measurement of malnourishment which indicates poverty in India.

3. Life expectancy and Infant mortality rate: Due to lack of nutritive food and health services, the poor people have low life expectancy. The rate of infant mortality depends on availability of health services so it is also an indicator of poverty.

4. Medical facilities: In developing countries, people get less medical services. Hence people are deprived of such services. As a result poverty is more.

5. Drinking water: In the absense of pure drinking water, polluted water increases the chances of having water borne diseases and hence make the problem of poverty more severe.

6. Provision of toilets: In villages people are more prone to water borne and contagiQus diseases. To save them from diseases, cleanliness is very important and for that toilet facilities are must. This is one of the causes of rise in poverty.

7. Housing: India lacks houses with full facilities. Most of the houses in India comprise of one room facility which is one of the major measuring rods of poverty.

8. Electricity consumption: In India because of high population and low per capita income, per person electricity consumption is very less. This effects the quality of life of people and is one of the causes for poverty.

9. Education: Low education among poor makes them conservative and less acceptable to changes. Thus, high rate of ignorance is a strong indicator of poverty.

10. Unequal distribution of income and property: With increase in income inequality on one hand rich class of people enjoy high standard of living and other facilities and on the other hand the people of low income living in slums are deprived of basic necessities like food, education and health. So, the disparity of income inequality is also one of the indicators of existing poverty.

11. High rate of unemployment: In situation of unemployment, due to lack of income, a person cannot fulfill basic needs of his family. As a result, level of poverty remain high in India.

Causes of Poverty:
1. Historical Causes:

• During the British rule, the farmers and agriculture suffered and so poverty increased.
• Britishers followed that kind of trade policy, tax policy and industrial policy, so that indian trade and business started losing their competitive power and production power. Also small and cottage industries of India were ruined. As a result unemployment and poverty started increasing.

2. Causes of Rural Poverty:

• Natural Causes: Repeated draught, uncertainty of monsoon and floods results in low production and less and uncertain income of the agriculturist. Hence, poverty is more.
• Demographic Causes: High increase in population did not allow per capita income to increase. Low per capita income and big size of families resulted in poor quality of life. Labour supply increases because of high population but low pace of development increased unemployment and so was poverty.

3. Economic Causes:

• Low agricultural productivity per labour: Because of poor irrigation facilities, insufficient technology, lack of education and training, heavy load of population,
etc. result in low agricultural productivity in India. So due to low income of farmers, poverty increases.
• Unequal distribution of land and property: Because of zamindari system most of the tenants were working on other’s land and were not the owners. So they had no interest in investments. As a result, agriculture production became low and poverty increased day by day.
• Minimal development of small and cottage industry: Small and cottage industries which have great contribution in employment were growing slowly and this increased seasonal unemployment. As a result poverty remained high.
• Rapid increase in prices: Price-rise seriously affects poverty. Price-rise reduces purchasing power of low income group. While increases the benefit of businessman. This increases unequal distribution of income in the society and poverty increases.
• High rate of unemployment: In rural , India lack, of development of allied industries are responsible for high illiteracy, low mobility of labour, high rate of unemployment and poverty.

4. Social Causes:

• Low level of education: Because of low level of education, specially in rural areas, people get less opportunities in alternative employment and wage level remain low.. As a result poverty increases.
• Gender inequality: At workplace females are paid less than males. Women have low health level and less opportunities to work that keeps family income low which increases the level of poverty.

5. Other Causes:

• War: Because of war economic development remains low and problem of price-rise takes place. Hence poverty increases.
• Increases in defence expenditure: To make the security system stronger against war, a lot of special facilities have increased expenditure on defence which reduces expenditure on economic development and level of poverty increases.
• Defective Policies: Various schemes were introduced during planning period to reduce poverty but due to frequent changes in the ruling government many times they lacked continuity and co-ordination. As a result, poverty reduction could not be achieved through these schemes.

Measures to Reduce Poverty:
1. To increase agricultural productivity: Development of agriculture will increase productivity per labour and increases employment ‘opportunities. This will be more advantageous to poor and poverty can be reduced.

2. Development of small-scale industries: If small and cottage industries can be developed and encouraged then poverty can be reduced on a larger scale.

3. Development of unorganised sector: If the conditions of workers of unorganised sectors like vegetable vendors, agricultural labourers, masons in construction, vendors, etc. are improved and social securities are provided to them, then developing their skill poverty can be reduced.

4. Use of appropriate tax policy: If the government makes such a policy wherein more tax is imposed on rich class and less tax an poor class then government makes expenses on welfare oriented programmes for the poor people. As a result, socio-economic conditions of the poor are improved and there is seen reduction in income inequality and poverty.

5. Rise in human capital investment: If the investment is made on education, skill development, then there will be very low level of unemployment and poverty will be less.

6. Goods and services at reasonable rate: If nutritive food, food security and basic services to poor people are made available at reasonable rates, it will directly reduce poverty.

7. Employment programmes ; For poverty eradication, an increase in employment opportunity is an important measure. Integrated Rural Development Programme -IRDP:2nd October, 1980

Self-employment Programmes:

• Integrated Rural Development Programme -IRDP
• Training of Rural Youth and for Self-Employment – TRYSEM
• Development of Women and Children in Rural Areas -DWCRA
• Million Wells Scheme – MWS
• Supplying Improved Toolkit to Rural Artisans – SITRA
• Ganga Welfare Scheme – GWS

Suvarnajayanti Gram Swarojgar Yojana -SGSY: 1st April, 1999: IRDP and other programmes integrated with it were merged in SGSY

Wage Employment Schemes:

• 28th April, 1989: Jawahar Rojgar Yojana – – JRY
• 2nd Oct., 1993: Employment Assurance Scheme – EAS
• 1994-95: Pradhan Mantri Rojgar Yojana – PMRY
• 2005: National Rural Employment Guarantee Act-NREGA
• 2009: Mahatma Gandhi National Rural Employment Guarantee Act – MGNREGA

Housing Schemes:

• 1985 – 86: Indira Awas Yojana – IAY
• 2013 – 14: Rajiv Awas Yojana – RAY
• 25th June, 2015: Pradhan Mantri Awas Yojana – PMAY

Social Security Schemes:

• 9th May, 2015: Atal Pension Scheme-APS
: Jivan Jyoti Insurance Scheme – JJIS
: Pradhan Mantri Fasal Bima Yojana – PMFBY
• 28th August, 2014: Jan Dhan Yojana