Poverty As A Challenge Class 9 Notes Economics - Chapter 3

Chapter: 3

What Are Proverty As A Challenge ?

Poverty is a state or condition in which a person or community unable to get the minimum basic necessities of life, i.e., food, cloth and shelter for sustenance.

Poverty As Seen By Social Scientists

Social exclusion

  • According to this concept, poverty must be seen in terms of the poor having to live only in a poor surrounding with other poor people, excluded from enjoying social equality of better-off people in better surroundings. Social exclusion can be both a cause as well as a consequence of poverty in the usual sense.


  • Vulnerability to poverty is a measure, which describes the greater probability of certain communities (say, members of a backward caste) or individuals (such as a widow or a physically handicapped person) of becoming, or remaining, poor in the coming years.
  • Vulnerability describes the greater probability of being more adversely affected than other people when bad time comes for everybody, whether a flood or an earthquake or simply a fall in the availability of jobs.

Poverty Line

  • It is a common method used to measure absolute poverty.
  • A person is considered poor if his or her income or consumption level falls below a given minimum level or below poverty line.

Poverty Estimates

  • There is a substantial decline in poverty ratios in India from about 45 per cent in 1993-94 to 37.2 per cent in 2004–05. The proportion of people below poverty line further came down to about 22 per cent in 2011–12 and 20.8% in 2020. If the trend continues, people below poverty line may come down to less than 20 per cent in the next few years.

Vulnerable Groups

  • The proportion of people below poverty line is also not same for all social groups and economic categories in India. Social groups, which are most vulnerable to poverty are Scheduled Caste and Scheduled Tribe households.
  • Among the economic groups, the rural agricultural labour households and the urban casual labour households are the most vulnerable groups.
  • Apart from these social groups, there is also inequality of incomes within a family. In poor families all suffer, but some suffer more than others.

Inter-state Disparities

  • Poverty in India also has another aspect or dimension. The proportion of poor people is not the same in every state.
  • Recent estimates show while the all-India Head Count Ratio (HCR) was 21.9 per cent in 2011-12 states like Madhya Pradesh, Assam, Uttar Pradesh, Bihar and Odisha had above all India poverty level.

Global Poverty Scenario

  • The proportion of people in different countries living in extreme economic poverty—defined by the World Bank as living on less than $1.90 per day—has fallen from 36 per cent in 1990 to 10 per cent in 2015.
  • Poverty declined substantially in China and Southeast Asian countries as a result of rapid economic growth and massive investments in human resource development.
  • In the countries of South Asia (India, Pakistan, Sri Lanka, Nepal, Bangladesh, Bhutan) the decline has also been rapid 34 per cent in 2005 to 16.2 per cent in 2013.

Global Poverty Scenario

  • One historical reason is the low level of economic development under the British colonial administration. The policies of the colonial government ruined traditional handicrafts and discouraged development of industries like textiles. The low rate of growth persisted until the nineteen eighties. This resulted in less job opportunities and low growth rate of incomes. This was accompanied by a high growth rate of population. The two combined to make the growth rate of per capita income very low.
  • Another feature of high poverty rates has been the huge income inequalities.
  • One of the major reasons for this is the unequal distribution of land and other resources.

Anti-Poverty Measures

Promotion of Economic Growth

  • The higher growth rates have helped significantly in the reduction of poverty.
  • Economic growth widens opportunities and provides the resources needed to invest in human development.

Targeted anti-poverty programmes

  • Mahatma Gandhi National Rural Employment Guarantee Act, 2005 aims to provide 100 days of wage employment to every household to ensure livelihood security in rural areas.
  • Prime Minister Rozgar Yojana (PMRY) is another scheme which was started in 1993. The aim of the programme is to create self-employment opportunities or educated unemployed youth in rural areas and small towns. They are helped in setting up small business and industries.
  • Swarna Jayanti Gram Swarozgar Yojana (SGSY) was launched in 1999. The programme aims at bringing the assisted poor families above the poverty line by organising them into self-help groups through a mix of bank credit and government subsidy.

The Challenges Ahead

The Challenges Ahead of Poverty has certainly declined in India. But despite the progress, poverty reduction remains India’s most compelling challenge.