For an understanding of the problem of poverty and its solution, one should first be clear about the concept of poverty itself. This will also help us in measuring the magnitude of poverty in the country.
There are two types of poverty absolute poverty and relative poverty. Absolute poverty refers to inability of a section of population to achieve basic necessities of life. Relative poverty, on the other hand, refers to inequality in distribution of income and expenditure.
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Absolute Poverty:
In India the concept of poverty has been approached in the absolute sense. In other words, it is not related to the income or consumption expenditure distribution. The concept of absolute poverty is relevant for the less-developed countries where absolute poverty abounds. To measure it, absolute norms for living are first laid down. These relate to some minimum standard of living.
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These may be expressed measured in terms of income/consumption- expenditure. Given this, one classifies all those as poor who fall below this standard. The number (and proportion) of such poor in the country’s population gives the measure of poverty.
For purpose of the measurement of poverty, consumption-expenditure is considered more appropriate and relevant than income. The reason is that the actual consumption-expenditure which determines the living standard of a consumer unit is not always met wholly out of current income. Such expenditure can also be met from assets, debts and dissaving.
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Poverty Line:
In India consumption-expenditure has been made the basis for the measurement of the minimum standard. The usual method is to fix a poverty level. This level is expressed in terms of an overall per capita consumption-expenditure.
This consumption-expenditure as such, is needed to ensure a certain minimum calorie intake, which in turn is derived from the information on food articles.
In figures, the poverty norm is anchored in terms of daily intake of2400 calories in rural areas and 2100 calories in urban areas. Those who are unable to incur this much amount of consumption- expenditure are identified as poor. They are identified as people living below the poverty line.
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On the recommendations of Lakdawala Committee different poverty lines were determined for different states.
Magnitude of Poverty in India:
The Uniform Recall Period (URP) consumption distribution data of NSS 61st round places the poverty ratio at 28.3 per cent in rural areas, 25.7 per cent in urban areas and 27.5 per cent in the country as a whole.
The corresponding poverty ratios from the Mixed Recall Period (MRP) consumption distribution data are 21.8 percent for rural areas, 21.7 per cent for urban areas and 21.8 per cent for the country as a whole.
The incidence of poverty is not same in all states. On the one hand we have states where poverty ratio is very high, like Orissa (46.4), Bihar (41.4), Madhya Pradesh (38.3), Assam (19.71), and Uttar Pradesh (32.8).
On the other hand we have states where poverty ratio is very low, Punjab (8.4), Himachal Pradesh (10) and Haryana (14). There has been a significant reduction in poverty ratio during 1993-94 to 2004- 05 in Himachal Pradesh, Haryana, Karnataka, Kerala, Tamil Nadu and Union Territories. Reduction in poverty has been unsatisfactory in Orissa, Madhya Pradesh, Uttar Pradesh and North East states.
One significant fact about poverty is that while the poverty ratio has been declining in India, the absolute number of poor had remained more or less the same. Poverty ratio was 36 per cent in 1993- 94 which means 32.0 crore people were below poverty line. Though poverty ratio declined by 8.5 per cent between 1993-94 and 2004-05 but the absolute number of poor was estimated at 30.2 crores persons.
The poor mostly belong to the weaker sections of the society like SC/ST, women, handicapped, etc. In rural areas they are the landless labourers, small and marginal farmers and rural artisans.
The urban poor, quite many of them are immigrants from villages, live in slums and on pavements. The poor are weak not only economically but also socially and politically.