Indian Economic Development Chapter 4 Poverty

Poverty implies inability to get minimum requirements for life, health and efficiency.

Two main forms of poverty are (i) Relative poverty, (ii) Absolute poverty

Poverty will reduce with acceleration of the pace of growth if jobless growth is avoided.

Head count ratio refers to the measurement of poverty in terms of the number of persons below poverty line.

Growth is converted into development only when poverty is eliminated.

Elimination of poverty implies that people no longer suffer from hunger, dearth or starvation. They enjoy at least the bare minimum of life viz food, clothing and shelter.

Poverty may be defined as the inability to secure the minimum consumption requirements for life such as food, clothing, education and health.

Nearly 26 percent people are living below the poverty line.

Low level of economic development, unequal distribution of income and wealth, growth of population, and myriad social and political factors are responsible for poverty in India.

Faster economic growth and equal distribution of income are the main measures adopted to remove poverty,

Poverty line is drawn on the basis of barest minimum desirable nutritional standards of 2400 calories per person per day in rural areas and 2100 calories in urban areas.

We have been provided vast natural resources by the nature, but we have not been able to trace all these resources. As a result lesser production, low income, low productivity, low standard of living and the resultant vicious cycle of poverty obtains.

Due to unemployment, the number of dependents on working population is increasing and as a result per head consumption expenditure is declining and a vast majority of people are living in poverty.

It is defined as the inability to achieve the minimum consumption needs for life.

Two main causes of poverty in India are:

(i) Low level of economic development.

(ii) Rapidly growing population.

Bihar, Madhya Pradesh and Orissa.

(i) Swaran Jayanti Gram Swarozgar Yojna.

(ii) Indira Avas Yojna.

(iii) Jawahar Gram Samridhi Yojna.

Poverty ratio is a measure of poverty and is the ratio of people falling below poverty line to the total population and is expressed as a percentage.

Poverty line is defined as per capita consumption expenditure which is required to attain a minimum acceptable standard of living.

(i) The Integrated Rural Development Programme (IRDP).

(ii) The National Rural Employment Programme (NREP).

(iii) The Rural Landless Employment Guarantee Programme (RLEGP).

(i) Jawahar Gram Samridhi Yojna.

(ii) Swaranjayanti Gram Swarozgar Yojna.

The poverty ratio for rural poor was 56.4% and the urban poor for 49.0 percent.

The two main categories of rural poor are the small farmers and the landless labourers.

Orissa is the poorest state of India.

The percentage of persons without two square meals a day for some months of the year is often termed as the hunger ratio.

Poverty reduces the health and efficiency of the people. Because of low efficiency, the level of production and productivity also becomes low.

Under-utilisation of resources, low level of technology, widespread unemployment, backwardness of agriculture and inflationary pressure are the main causes of poverty.

The unequal distribution of means of production and money income is also responsible for poverty in India. The income and wealth are concentrated in few hands while the majority of the people live below poverty line. As a result, the difference of rich and poor people increases day by day.

Inflation increases price of the commodity. When prices rise, the purchasing power of money falls and thus affects badly the poor and middle income groups. In this way, rising prices are responsible for poverty in India.

Poverty line is defined as per capita consumption expenditure which is required to attain a minimum acceptable standard of living. In India, it is the level of private consumption expenditure that would ensure a food basket that would supply required amount of calories.

The problem of poverty is undoubtedly the problem of imbalance between the population and economic resources of the country. We have 15 percent of global population but our resources are only 2 percent of global income. The gap between population and resources can be reduced by reducing population and increasing economic resources.

Self employment in Rural Areas : Rural Employment Generation Programme

Self employment in Urban Areas : Swarana Jayanti Shahari Rozgar Yojna.

Creation of income earning assets help in generating employment opportunities which is helpful in improving the standard of living of the people. With the introduction of employment at opportunities a wider scale, the problem of poverty can be solved to a great extent.

National Rural Employment Guarantee Scheme became operative from 2006.

Prime Minister Rozgar Yojana is operative both in rural and urban areas.

India has the largest population living below the line of poverty.

Poverty alleviation programmes are those schemes which are formulated and implemented by the Government for the benefit of the households living below the line of poverty.

The rural poor people comprise of (i) small land holders, (ii) agricultural labour households, (iii) village artisan progressively thrown out of their traditional occupations.

The World Bank has fixed the norms of one dollar one person per day as poverty line.

About 260 millions.

Uttar Pradesh, Bihar, Madhya Pradesh, West Bengal and Orissa account for about 70% of India's poor.

The wages-employment programme seem to score better.

Self-employment is a situation under which\ person possesses some productive assets, works on it and generates income for himself.

Wage-employment is a situation under which a person works for somebody else, may be a private enterprise or a government agency and get the wages for his labour.

Starvation and hungers are the key features of the poorest households.

The rural poor migrate to urban areas in search of alternative employment and livelihood.

Dadabhai Naoroji discussed the concept of a poverty line in pre-independent India.

1. In 1962, the Planning Commission formed a study group.

2. In 1979. 'Task Force on Projections of Minimum Needs and Effective Consumption Demand' was formed.
3. In 1989, an expert group was formed.

Churning poor are those persons who regularly move in and out of poverty (eg. small farmers and seasonal workers).

Occasionally poor are those persons who are rich most of the time but may sometimes have a patch of bad luck.

One way of measuring poverty is to determine the monetary value (per capita expenditure) of the minimum calorie intake that is estimated at 2400 colories for a rural person and 2100 for a person in the urban area.

The economists doubt the Govt's claim by pointing out that the way data are collected, items that are included in the consumption basket methodology followed to estimate the poverty line and the number of poor are manipulated to arrive at the reduced figures of the number of poor in India.

A consumption basket is a group of goods and services consumed by a household. N.S.S.O. has identified 19 groups of items in the consumption basket.

Seven groups of items included in in the consumption basket by NSSO are (i) cereals, (ii) pulses, (iii) milk and milk products, (iv) edible oil, (v) fuel and light, and (vii) clothing.

Alternative Methods : 1. Sen Index (Developed by Amartya Sen), 2. Poverty Gap and 3. Squared Poverty Gap.

The farmers take loans for cultivation and other domestic needs.

The farmers are unable to pay back their loans when their crops fail due to drought or other natural calamities.

The farmers commit suicide due to their inability to pay back loans that they have taken for cultivation and other domestic needs.

Because they do not have the necessary knowledge and skills.

A steep rise in the price of foods-grains and other essential goods at a rate higher than the price of luxury goods further intensifies the hardship and deprivatisation of lower income groups.

The Indian Constitution and Five Year Plans state social justice as the primary objective of the development strategies of the Government.

1. Growth oriented approach.

2. Raising the income and employment for poor through the creation of incremental assets and by means of work generation, and

3. Providing minimum basic amenities to the people.

A casual wage labourer is a person who is casually engaged in others' farm or non-farm enterprises and in turn, receives wages, according to the terms of the daily or periodic work contract.

Unemployed, intermittently employed labourers as casual labourers constitute the most of the urban poor.

Indebtedness is one of the significant factors of poverty.

Unemployment/under-employment and the casual and intermittent nature of work in both rural and urban areas compel indebtedness.

1. Public Distribution System

2. Integrated Child Development Scheme, and

3. Mid-day Meal Scheme.

1. Elderly people who do not have anyone to take care of, 2. Poor women who are destitute, and 3. Widows are covered under National Social Assistance Programme.

Income and expenditure oriented approaches do not take into account many other attributes of the Door people.

The absolute number of poor declined for the first time in India in the 1990s.

Minimum calorie requirement is higher in case of rural population because hard working male population is found to be relatively more there than in urban areas.

(1) Low Rate of Growth : Rate of growth of economy has been quite low during five year plans in India.

(2) Increase in Prices : Upward trend in prices that started at the beginning of second plan in India has still been continuing.

(3) Capital Deficiency : Capital is the instrumental factor in the setting up of industry, transport, irrigation and other projects of development.

(4) Inequality of Income : There is unequal distribution of income. The sources of income are centralized in some hands.

(5) Less Net National Product : Net National Product of India is miserably low compared to its size of population. Low Per capita income is the obvious consequence.

Three important factors responsible for widespread poverty in India are as follows:

(1) Inadequate Growth : The growth of the Indian Economy, estimated at about 4% per annum during 1951-98, has been inadequate to meet the needs of the people.

(2) Inequalities of Income : A large part of growth in the economy has been cornered by the rich people. As a result, a large proportion of population has continued to live below the poverty line.

(3) Growing Unemployment : The employment creation capacity of growth has been limited. As a result, unemployment increases day by day.

Measures towards reducing poverty are as follows:

(i) By creating more employment opportunities in rural as well as in urban areas, we can reduce poverty in India.

(ii) Public works should be started on an extensive scale, cottage and small scale industries should be encouraged.

(iii) Effective utilisation of manpower will generate more income.

(iv) Levelling up the distribution of income.

(v) Spreading up of family planning, particularly among the poor.

The reduction in economic inequalities is essential for the removal of poverty in India. We should changeThe reduction in economic inequalities is essential for the removal of poverty in India. We should change the pattern of investment so that most of the available resources are diverted to the production of consumer goods, instead of luxury goods. Steps should be taken to reduce the concentration of economic power in certain hands, ceiling laws should be enforced more effectively and available surplus land should be distributed among the landless labourers. the pattern of investment so that most of the available resources are diverted to the production of consumer goods, instead of luxury goods. Steps should be taken to reduce the concentration of economic power in certain hands, ceiling laws should be enforced more effectively and available surplus land should be distributed among the landless labourers.

(i) Absolute Poverty: It is defined as the inability to achieve the minimum requirement of life, health and efficiency as a result of very low income or insufficient assets.

(ii) Relative Poverty : It makes a comparison of relative levels of income of different people or different segments of population to determine who is poor.

The number of poor is very large in India. Several organisations and economists have prepared their estimates on the extent of poverty in India.

According to P.D. Ojha (1960-61), about 184 million people in rural areas and 6 million people in urban areas were living below the poverty line.

According to Dandekar and Rath, about 40 percent of the rural population and nearly 50 percent of the urban population lived below the poverty line.

According to World Bank (1988), about 42.5 percent of the total population lived below the poverty line in 1983 which declined to 39.6 percent in 1988. In 1999-2000 more than three fourth of the poor in India reside in villages.

The government is making expenditure to remove poverty. Efforts are being made to increase expenditure on education, health, water supply and sanitation. The government also has a variety of other social security programmes to help a few specific groups. National Social Assistance Programme is one such programme initiated by the central government. Under this programme, elderly people who do not have anyone to take care of are given pension to sustain themselves. Poor women who are destitute widows are also covered under this scheme.

To get help from government to set up Petty Shop, The Swarnajayanti Shahri Rozgar Yojna (SJSRY) is suitable. This was started on 1 Dec., 1997. Earlier three urban poverty programmes, Nehru Rozgar Yojna (NRY), Urban Basic Services for the Poor (UBSP) and Prime Minister's Integrated Urban Poverty Alleviation Programme (PMIUPAP) were merged in it. It has two main schemes : (1) The urban self employment programme, (2) The Urban Wage Employment Programme.

After completing the school education to start a mechanic's shop one can get financial assistance from some nationalized bank. The educated unemployed from low-income families in rural and urban areas can seek financial help to set up any kind of enterprise that generates employment under Prime Minister Rozgar Yojna (PMRY) and Swarnajayanti Shahri Rozgar Yojna (SJSRY). Its aim is to create employment opportunities-both self-employment and wage-employment in urban areas.

There are a number of programmes and schemes to alleviate poverty, but hunger, malnourishment, illiteracy and lack of basic amenities continue to be a common feature in many parts of India. Though policy towards poverty alleviation has involved in a progressive manner but the benefits of these programmes did not reach poor. These programmes depend mainly on government and bank officials for their implementation. They are ill-motivated, inadequately trained and corruption-prone. As a result, the resources resulted in inefficiency and waste. The government policies failed to address the vast majority of people who are living below the poverty line. The attitude of the government officials should be changed. They should be sympathetic to the poor people.

The Planning Commission has been estimating the incidence of poverty using the methodology of the expert groups. On this basis, estimates of poverty are available at national level from 1973-74 to 1999-2000. The incidence of poverty declined from nearly 55 percent 1973-74 to 36 percent in 1993-94 and 26 percent in 1999-2000. The latest estimates for 1999-2000 reveal a significantly reduced number of poor at about 26 crore. The decline in poverty ratio during the last 40 years has been uneven among the states. In 1973-74, more than 80 percent resided in rural areas and in 1999-2000, this has come down to 75 percent. This means more than three-fourths of the poor in India reside in villages. Moreover poverty which was prevailing predominantly in rural areas also has shifted to urban areas.

Widespread unemployment is one of the main causes of poverty in India. The number of unemployed people is increasing every year. The problem of unemployment is the main cause of poverty in India. The problem of unemployment has many forms such as open enmployment, disguised unemployment, seasonal unemployment and so on. The labour force of the country remains unemployed, idle and unutilised because of unemployment. On the other hand, the number of people dependent on the working population increases. As a result, the level of income and purchasing power goes down. The unemployment is responsible for poverty.

During the plan period, the number of poor people are increasing. Trend of poverty in India is shown in the following table:

The policy makers started thinking that incomes and employment for the poor could be increased through the creation of incremental assets and by means of work generation through specific poverty alleviation programmes. This programme aims at ensuring food for poor instead of money. This programme enables the poor to have access to food instead of money as money can give birth to many evils or may be misutilised by the poor. But Food for Work' programme provides assurance to the family of the worker to get minimum food to eat and survive well.

In India, five states namely - Uttar Pradesh, Bihar, Madhya Pradesh, West Bengal and Orissa, account for about 70% of India's poor. However, because of the initiation of developmental activities in almost all the states of India, only two states namely Bihar and Orissa were left behind till 1999-2000. Though they have tried to reduce the number of persons living below poverty line, but their success in marginal e.g. Gujarat has been able to reduce the number of persons living below the poverty line from 48% to 15% doing 1973-2000. Whereas West Bengal has achieved this rate by 2/3 i.e. from 63% to 27% during 1973-2000.

Features of Casual Labourers:

1. They have no job security.

2. They have no assets.

3. They have limited skills.

4. They have sparse opportunities and no surplus to sustain them.

The second five year plan (1956-61) has pointed out that 'the benefits of economic development must accrue more and more to the relatively less privileged classes of society'.

The government's approach to poverty reduction is of three dimensions:

1. Growth-oriented approach : It is based on the expectation that the effects of economic growth that is rapid increase in the gross domestic product and per capita income of a nation would spread to all sections of society. Rapid industrial development and transformation of agriculture through Green Revolution in select regions would benefit under developed regions and more backward sections of the community.

2. Food for work : In 1970, food for work programme was started. The policy-makers started thinking that incomes and employment for the poor could be increased through the creation of incremental assets and by means of work generation through specific poverty alleviation programmes. Under self-employment programmes, financial assistance is given to families or individuals.

3. Provision of minimum basic amenities : Through public expenditure on social consumption needs such as education, health, water supply and sanitation, people's standard of living could be improved. Programmes under this approach are expected to supplement the consumption of the poor, create employment opportunities and improvements in health and education. For this purpose Pradhan Mantri Gram Sarak Yojna, Pradhan Mantri Gramodaya Yojna, Valmiki Ambedkar Awas Yojna and National Social Assistance Programme were started.

These are causes for poverty in India as under:
1. Unemployment : Widespread unemployment is responsible for poverty in India. The problem of unemployment has many forms such as open unemployment, disguised unemployment, under employment, seasonal unemployment etc.
2. Backwardness of Agriculture : The inadequate supply of water, fertilizers, pesticides and low level of technology are the main causes responsible for the backwardness of agriculture in India.
3. Low Level of Technology : Use of low technology results in low level of productivity and consequently country remains in a state of poverty.
4. Under-Utilisation of Natural Resources : India possesses vast and rich natural resources but a large part of our water, forest energy and mineral resources is either unutilised or under-utilised.
5. Inequalities of Income and Wealth : To a large extent, inequalities of income and wealth are also responsible for poverty in India.
6. Rapid rise in population : Due to increase in population, the level of per capita income and consumption is not increasing much.
7. Social Factors : Illiteracy, ignorance, backwardness, outdated technology, social infrastructure and unscientific outlook are also responsible for poverty in India.
8. Government Policies : Taxation and expenditure policies of the government have not been used effectively to bridge the gap between the rich and the poor.
9. Inflation : Inflation is also a cause of poverty, because of inflation people cannot buy much with their incomes.
10. Regional Disparities : There is a wide regional disparity in India. Some states are very well off while others are poor. Punjab, Haryana and Western Uttar Pradesh are rich because of agricultural activities and Gujarat, Maharashtra, Punjab have lots of industrial activities.

Following steps should be taken to remove poverty in India:

1. Creation of employment opportunities : There should be greater encouragement to small scale industries in rural areas, poultry farming, dairy farming and piggeries should be developed.

2. Population control : Population growth is a hinderance in overcoming the problem of population.

4. Provision of minimum needs : The government should provide water, housing, sanitation, other facilities.

Poor people live in rural and urban areas. They possess few assets. They reside in Kutcha hutments with walls made of mud and roofs made of grass, bamboo and wood. The poorest of them do not have such dwelling. Many of them are landless. Those who have land, have dry and waste lands and their earning is not adequate to meet even basic requirements. They do not have even two meals a day. Starvation and hunger are the features of the poorest households. The poor lack basic literacy and skills. Poor people face lack of stable employment. The number of dependents is high among the poor families. Malnutrition is alarmingly high among the poor. Ill-health, disability or serious illness make them physically weak. They do not get fresh and safe drinking water. 

In simple words the poverty line is defined as the per capita expenditure at which the average colorie intake was 2400 calories for a person in rural areas and 2100 calories for urban areas. Most of the studies use data collected by national sample survey organisation on various aspects including consumption expenditure using the calorie norms, age, sex, occupation and region. In 1999-2000, the poverty line was defined for rural areas as consumption worth Rs. 328 per person a month and for urban areas it was Rs. 454.

In 1973-74, more than 321 million poeple were below the poverty line. In 1999-2000, this has come down to about 260 million. In 1973-74, about 55 percent of the total population were below the poverty line. In 1999-2000, it has fallen to 26 percent. In rural areas about 75 percent of the total poor are below the poverty line.

Most of the people in villages are underemployed and unemployed. Their standard of living is very poor. The government policies have failed to remove the poor condition of rural people. High growth alone is not sufficient to reduce poverty. Without the active participation of poor, no successful implementation of programmes is possible. Implementation of poverty alleviation programmes requires active involvement of poor. This is possible through a process of social mobilization encouraging poor people to participate and get them empowered. It will also create employment opportunities, which may lead to increase in levels of income, skill development, health and literacy. It is necessary to identify poverty striken areas and provide infrastructure such as schools, roads, power, telecom, information technology, training institutes. The villagers can get help from Pradhan Mantri Gram Sadak Yojna, Pradhan Mantri Gramodaya Yojna etc.

Following measures have been taken by the government to remove poverty under five-year plans:

(i) Integrated Rural Development Programme : With a view to remove poverty in rural areas and making provision for full employment under this programme, attempts are being made to provide more employment by developing agriculture, animal husbandry, fisheries, small scale and cottage industries etc. in 5111 blocks of the country.

(ii) Jawahar Rozgar Yojna : It was launched in 1989. Its aim was to provide employment to atleast one member of a rural poor family for 50 to 100 days in a year.

(iii) Jawahar Gram Samriddhi Yojna (JGSY) : It was launched on 1 April 1999. It has two main objectives : (i) Creation of durable productive community assets at the village level (ii) Generation of supplementary employment for the unemployed poor in the rural areas. The programme is implemented entirely at the village panchayat level.

(iv) Swarnajayanti Gram Swarozgar Yojna (SGSY) : It was started on 1 April 1999. Its aims are (i) Focussed approach to poverty alleviation, (ii) Capitalising advantages of group lending, (iii) Overcoming the problems associated with multiplicity of programmes. It covers all aspects of self-employment. It integrates various agencies. The objective of this yojna is to bring the existing poor families above the poverty.

(v) Employment Assurance Scheme : The programme is presently being implemented in all the rural blocks. Its objectives are : (i) Creation of additional wage employment opportunities during the period of acute shortage for the rural poor living below the poverty line, (ii) Creation of durable community, social and economic assets for sustained economic development.

(vi) Pradhan Mantri Gramodaya Yojna (PMGY) : It was introduced in 2000-2001 focussing on village level development in five critical areas, health, primary education, drinking water, housing and rural roads with the objectives of improving the quality of life of people in the rural areas.

(vii) Sampoorna Grameen Rozgar Yojna (SGRY) : It was launched with effect from September 2001. The scheme aims at providing wage employment in rural areas as also food security, creation of durable community, social and economic assets.

(viii) Grameen Rozgar Guarantee Scheme : It was lanuched in February 2005 to provide work for 100 days a year in rural areas.

The government's approach to poverty reduction is of three dimensions:
I. The first one is the growth-oriented approach. It is based on the expectation that the effects of economic growth - rapid increase in gross domestic product and per capita income -would spreed to all sections of society and will trickle down to the poorer sections. This was the major focus of planning in the 1950s and early 1960s. It was felt that rapid industrial development and transformation of agriculture through green revolution in select regions would benefit the underdeveloped regions.
II. The second approach has been initiated from the third five year plan (1961-1966) that suggests that incomes and employment for the poor could be raised through the creation of incremental assets and by means of work generation. This could be achieved through specific poverty alleviation programme. The examples based on this approach are:

(a) Food for work programme: Minimum food was ensured to workers and their families instead of money under this programme.

(c) Prime Minister's Rozgar Yojna : The educated unemployed from low income families in rural and urban areas can get financial help to set up any kind of enterprise that generates employment under this programme.

(d) Swarna Jayanti Shahri Rozgar Yojna : It mainly aims at creating employment opportunities both of self-employment and wage-employment in urban areas.

(e) National Food for work Programme and Sampoorna Grameen Rozgar Yojna : These programmes aim at generating wage employment for the poor unskilled people living in rural areas.

(f) In August 2005, the Parliament has passed a New Act to provide guaranted wage employment to every household whose adult volunteer to do unskilled manual work for a minimum of 100 days in a year. This Act is known as National Rural Employment Guarantee Scheme, 2005.

III. The third approach to tackle poverty is to provide minimum basic amenities to the people. Programmes under this approach are expected to supplement the consumption of the poor, create employment opportunities and bring about improvement in health and education. Three major programmes that aim at improving the food and nutritional status of the poor are Public Distribution System, Integrated child Development Scheme and Mid-day Meal Scheme.

Difference between rural and urban poverty:

That the poverty has shifted from rural to urban. This is clear from the fact that in 1973-74 more than 80% of the poor resided in rural areas but in 1999-2000, this proportion has reduced to 75%. Meaning thereby, poverty which prevailed predominantly in rural areas, has shifted to urban areas. In the 1990s, the absolute number of poor in rural areas has declined whereas the number of poor in urban areas has increased.

Growth oriented approach to poverty reduction : It is the first government's approach to poverty reduction. This approach was based on the expectation that the effects of economic growth (refer increase in gross domestic product and per capita income) would spread to all sections of society and trickle down to the poor section also. This approach was the major focus of planning in the 1950s and early 1960s.
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. But this approach was failure. The benefits of economic growth has not trickled down to the poor. The green revolution exacerbated the disparities regionally and between large and small farmers. There was unwillingness and inability to redistribute lands.

These are main features of the poor.

1. Malnutrition is alarming high among the poor.

2. Ill-health, disability or serious illness makes them physically weak.

3. They borrow from money lenders who charge high rates of interest that lead them into chronic indebtness.

4. The poor are highly vulnerable.

5. They are not able to negotiate their legal wages from employers and are exploited.

6. Most poor households have no access to delectricity.

7. Their primary cooking fuel is firewood and cow-dung.

8. A large section of poor people do not even have access to safe drinking water.

9. There is an extreme gender inequality in the participation of gainful employment, education and in decision making within the poor family.

10. Poor women receive less care on their way to motherhood.

11. Their children are less likely to survive or be born healthy.

We sum of up the features of poverty with two scholars Saheen Rafi Khan and Damian's remarks, 'Poverty is hunger, poverty is being sick and not being able to see a doctor. Poverty is not being able to go to school and not knowing how to read. Poverty is not having a job. Poverty is fear for the future, having food once a day. Poverty is losing a child to illness, brought about by unclear water. Poverty is powerlessness, lack of representation and freedom.'

There are many mechanism to identify for the poor. Our government uses Monthly Per Capita Expenditure (MPCE) as proxy for income of households to identify the poor. This approach has been criticised by some scholars. According to them, that this mechanism groups all the poor together and do 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.

Morever there are many other factors other than income and assets which are associated with poverty. For example, the accessibility to basic education, health care, drinking water and sanitation. This mechanism also does not care social factors such as literacy, ill-health, lack of access to resources discrimination or lack of civil and political freedoms into consideration.

In pre-independence India, Dadabhai Naoroji was the first to discuss the concept of poverty.

Jail cost of living: Various attempts have been made to develop a scale to measure poverty. Dadabhai Naoroji was the first to measure poverty. He used the 'jail cost of living” to measure the poverty line. He used the menu for a prisoner and used appropriate prevailing prices to arrive at the cost of consumption of an adult prisoner.

Different methods (norms) of fixing poverty line:

1. Dadabhai Naoroji's Jail cost of living.

2. Task force on projections of minimum needs and effective consumption.

Transient poor are comprised of two categories of poor (i) Churning poor and occasionally poor. Churning poor regularly move in and out of poverty such as small farmers and seasonal workers. Occasionally poor are rich most of the time but may sometimes have a patch of bad luck.

Poverty line cut off should be determined in terms of consumption rather than in terms of income. The reason is that consumption reflects actual use of the goods and services by an individual as well as the type of goods actually used while income only shows capacity to purchase.

It is right to say that urban poverty is a spillover of rural poverty. People tend to migrate from rural areas to urban areas in search of alternative occupations. But in urban areas they do not find jobs beyond subsistence. In this way, they only add to the percentage of urban population below poverty line.

Casual workers.

Churning poor are those poor who regularly move in and out of poverty.

Monetary value (per capita expenditure) of the minimum value calorie intake.

Government identifies poor through monthly per capita expenditure as proxy of income of households to identify the poor.

These are defect as under:

1. The mechanism used by the government does not differentiate between the very poor and the other poor.

2. This mechanism takes into account expenditure on food and a few selects items only as proxy for income. Economists question its basis.

3. This mechanism does not identify who among the poor need help the most.

Accessibility to basic education, health care, drinking water and sanitation.

Inefficient “delivery mechanism” of the government riddled with large scale corruption is the principal cause behind failure of poverty alleviation programmes.

According to scholars, following factors have led farmers to commit suicide:

1. The shift from traditional farming to the farming of high yielding commercial crops, when there was no technical support.

2. Decline in public investment in agriculture in the last two decades.

Chronic poor usually live below the poverty line whereas Never poor live above poverty line.

These are difference between Chronic poor, Transient poor and Non-poor.

A.

Chronic poor

C.

Non-poor

D.

Churning poor moving in and out of poverty and occasionally poor

A.

Never poor

C.

Occasionally poor

A.

Growth oriented

D.

All the above

D.

Swaran Jayanti Gram Swarojgar Yojna