ASSIGNMENT

Of
INTERNATIONAL TRADE
&
DEVELOPMENT

TOPIC: India Poverty

SUBMITED TO:
Ms. Shweta Miglani
(Faculty)

SUBMITED BY:
Rajat Gupta
MBA-2(IB)
R.No. 81501317162

P.C.T.E.
 “Rajiv Gandhi once said that out of 100 paisa allocated for poor only 14 paisa
reaches them”

What Is Poverty?
Poverty refers to the condition of not having the means to afford basic human needs such as clean
water, nutrition, health care, clothing and shelter. This is also referred to as absolute poverty or
destitution.
Relative poverty is the condition of having fewer resources or less income than others within a
society or country, or compared to worldwide averages.
Chronic Poverty People in chronic poverty are those who have benefited least from economic
growth and development. The chronically poor people are multi-dimensionally deprived i.e. they
experience deprivations of many kinds. According to an estimate, there are between 300 and 420
million people in 32 developing countries including India & China.

What Is Poverty Line?

Poverty line, is the minimum level of income deemed necessary to achieve an adequate standard of
living in a given country.
The World Bank's definition of the poverty line, for under developed countries, like India, is US$
1.2/5day/person.
The old international poverty line of $1.08 a day in 1993 Purchasing Power Parity (PPP) prices has
been updated to a new international poverty line of $1.25 a day in 2005 PPP prices.
As per the Government of India, poverty line for the urban areas is Rs. 296 per month and for rural
areas Rs. 276 per month, i.e. people in India who earn less than Rs. 10 per day. As per GOI, this
amount will buy food equivalent to 2200 calories per day, medically enough, to prevent death. At
this level of earning, even in a poor country like India, survival on Rs. 10 per day is a nightmare!
This actually translates to Rs. 3650 per year or US $ 75 per year.

Poverty Scenario Globally

poverty levels across the globe have declined, with 1.4 billion people (one in four) in the developing
world living below US$1.25 a day in 2005, down from 1.9 billion (one in two) in 1981. In other
words, global poverty rates fell from 52% in 1981 to 26% in 2005.
However, the number of poor people in the world in 2005 – at 1.4 billion - was higher than the
earlier estimates based on the then international poverty line of $1.08 in 1993 PPP. This earlier
estimate had pegged the number of global poor in 2005 at below 1 billion.

Almost half the world — over three billion people — live on less than $2.50 a day.

At least 80% of humanity lives on less than $10 a day.

• More than 80% of the world population lives in countries where income differential is
widening
• The poorest 40 percent of the world’s population accounts for 5 percent of global income.
The richest 20 percent accounts for three-quarters of world income.
• According to UNICEF, 25,000 children die each day due to poverty. And they “die quietly in
some of the poorest villages on earth, far removed from the scrutiny and the conscience of
the world. Being meek and weak in life makes these dying multitudes even more invisible in
death.”
• For the 1.9 billion children from the developing world, there are:
o 640 million without adequate shelter (1 in 3)
o 400 million with no access to safe water (1 in 5)
o 270 million with no access to health services (1 in 7)
• Rural areas account for three in every four people living on less than US$1 a day and a
similar share of the world population suffering from malnutrition.
• In 2005, the wealthiest 20% of the world accounted for 76.6% of total private consumption.
The poorest fifth just 1.5%:

• The poorest 10% accounted for just 0.5% and the wealthiest 10% accounted for 59% of all
the consumption:

• China’s poverty rate fell from 85% to 15.9%, or by over 600 million people
• China accounts for nearly all the world’s reduction in poverty
• Excluding China, poverty fell only by around 10%
Poverty Scenario in India
Estimates for India also indicate a continuing decline in poverty. The revised estimates suggest that
the percentage of people living below $1.25 a day in 2005 (which, based on India’s PPP rate, works
out to Rs 21.6 a day in urban areas and Rs 14.3 in rural areas in 2005 ) decreased from 60% in
1981 to 42% in 2005. Even at a dollar a day ( Rs 17.2 in urban areas and Rs 11.4 in rural areas
in 2005 ) poverty declined from 42% to 24% over the same period.
Both the dollar a day and $1.25 measures indicate that India has made steady progress against
poverty since the 1980s, with the poverty rate declining at a little under one percentage point per
year. This means that the number of very poor people who lived below a dollar a day in 2005 has
come down from 296 million in 1981 to 267 million in 2005.
However, the number of poor people living under $1.25 a day has increased from 421 million in
1981 to 456 million in 2005. This indicates that there are a large number of people living just
above this line of deprivation (a dollar a day) and their numbers are not falling.

State-Specific Poverty Lines in 2004-05

(Rs. per capita per month)
S.No. State/U.T.'s Rural Urban
1 Andhra Pradesh 292.95 542.89
2 Assam 387.64 378.84
3 Bihar 354.36 435.00
4 Chhattisgarh 322.41 560.00
5 Delhi 410.38 612.91
6 Goa 362.25 665.90
7 Gujarat 353.93 541.16
8 Haryana 414.76 504.49
9 Himachal Pradesh 394.28 504.49
10 Jammu & Kashmir 391.26 553.77
11 Jharkhand 366.56 451.24
12 Karnataka 324.17 599.66
13 Kerala 430.12 559.39
14 Madhya Pradesh 327.78 570.15
15 Maharashtra 362.25 665.90
16 Orissa 325.79 528.49
17 Punjab 410.38 466.16
18 Rajasthan 374.57 559.63
19 Tamil Nadu 351.86 547.42
20 Uttar Pradesh 365.84 483.26
21 Uttarakhand 478.02 637.67
22 West Bengal 382.82 449.32
23 Dadra & N. Haveli 362.25 665.90
 All-India 356.30 538.60
Reasons for Rural Poverty in India
• High level of dependence on primitive methods of agriculture.
• High population growth rate.
• High Illiteracy (about 35% of adult population).
• Regional inequalities.
• Protectionist policies pursued till 1991 that prevented high foreign investment.
• One of the major problems with poverty alleviation programs is their implementation.
• Caste System

Problems Of Rural Poverty

• Presence of malnutrition, illiteracy, diseases and long term health problems.\

• Unhygienic living conditions, lack of proper housing, high infant mortality rate, injustice to
women and social ill-treatment of certain sections of society.

The steps taken by government to remove urban poverty are:

The government of India has been trying its best to remove poverty. Some of the measures which the
government has taken to remove rural poverty are:

• Small farmer’s development Programme.

• Drought area development Programme.
• Minimum needs Programme.
• National rural employment Programme.
• Assurance on employment.

Causes for Urban Poverty

• Improper training
• Slow job growth.
• Failure of PDS system

Problems Of Urban Poverty

• Restricted access to employment opportunities and income.

• Lack of proper housing facilities
• Unhygienic environments
• No social security schemes
• Lack of opportunity to quality health and educational services.

The steps taken by government to remove urban poverty are:

• Nehru Rozgar Yojna.

• Prime Minister Rozgar Yojna.
• Urban Basic services for the poor Programme.
• National social Assistance Programme.

REMOVAL OF POVERTY:
 • - govt has taken efforts to develop the heavy industries and green revolution which would
lead to rapid economic development.Introduction of Trickle down method.the benefit to a
particular section of a society would trickle down to other section across the country.
• land reform methods: such as zamindari system, security of tenant farmers against eviction,
fixation of rents, fixation of ceilings on land holdings and distribution of surplus land among
small and landless farmers were undertaken by the govt.
• -cottage and small scale industries were encouraged which employ more people than
machines.
• Income distribution measures were introduced to reduce the gap between the rich and the
poor.(a)taxing the rich and the middle classes (b)on the luxuary commodities .(c)reducing the
prices on essential goods to lower income group.
• POVERTY ALLEVIATION PROGRAMMES (PAP)
• Govt has adopted Poverty Alleviation Programme to bring down the poverty level. Most of
them aim at providing employment or improvement of the asset-base of the poverty-ridden
families.
• SWARNAJAYANTI GRAM SWAROJGAR YOJANA (SGSY):
• -to help the existing poor families to come above the poverty line.
• -this is a centrally sponsored scheme.
• -families below poverty line are provoded with financial assistance.
• JAWAHAR GRAM SAMRIDHI YOJANA (JGSY):
• -to generate employment for those men and women who do not get sufficient days of
employment in rural areas.
• -creating community assets as social forestry, soil conservation, minor irrigation projects and
renovation of village wells, rural roads, dispensaries, schools, panchayat ghars, bus stands,
etc.
• -they target only families those are below poverty line.
• PRIME MINISTER ROZGAR YOJANA(PMRY) AND SWARNAJAYANTI SHAHARI
ROJGAR YOJANA (SJSRY):
• - aimed at the welfare of the educated unemployed in urban areas.
• - Self employment to the educated unemployed particulary in urban areas.
• - The age group of 18 to 35 are expected to benefit.
• - Persons belonging to weaker sections are given priority.

OTHER PROGRAMMES IN RURAL AREAS:

• - Employment Assurance Scheme (EAS) and Pradhanmantri Gramodaya

Yojana(PMGY) were launched in 1999 and 2000 ’01.
• - Create wage employment for families below poverty line
• - Improving the quality of life of people in rural areas.