Poverty in India

Meaning of Poverty

Poverty is the inability to secure the minimum human needs of food, clothing, housing, education, and health. When a person is unable to fulfil these basic needs, it leads to pain and distress. In this post, you are going to read about Poverty in India.


Types of Poverty


Poverty can be categorized in many ways. In one of the methods of categorizing poverty, the people who always remained poor or are usually poor but sometimes have a little more money are grouped together and are known as chronic poor. The people who are rich most of the time but sometimes become poor are known as occasionally poor. The people who are never poor are called the non-poor. They can be categorized as not-so-poor, middle class, upper-middle-class, rich, very rich, millionaires, and billionaires.

Features of Poverty in India

Relative Poverty – Read here

Absolute Poverty – Read here


Poverty Line


The poverty line is the cut-off level of per capita consumption expenditure per month which is needed to maintain a minimum acceptable standard of living in a country. In pre-independent India, Dadabhai Naoroji was the first person to discuss the concept of a poverty line.

Read Poverty Line in detail

The extent of Poverty – Read here


Features of Poverty in India


  • Variations: In the mid-seventies, the poverty ratio (which was more than 50%) got reduced to 22% by the end.
  • Trend: There has been a secular decline in the poverty ratio. Because of the increase in population, the number of poor people remained stable for a long period of time.
  • Interstate variations: More than 90% of India’s poor are living in Bihar, Odisha, Maharashtra, Tamil Nadu, Madhya Pradesh, Andhra Pradesh, West Bengal and Uttar Pradesh. Gujarat, Kerala, Haryana, Goa and Punjab have a low poverty ratio.
  • Vulnerable groups: Among the economic groups, the most vulnerable groups are the rural agricultural labour households and the urban casual labour households. On the other hand, among the social groups, the most vulnerable groups are scheduled castes and scheduled tribes.
  • Inequality of income within a family: Women, female infants and elder people suffer more than other members of the family. They are the poorest of the poor.
  • Rural and urban poverty: Nearly 75% of the poor people live in rural areas. Many poor people from rural areas migrate to urban areas in search of jobs. However, the industrial and service sectors cannot provide sufficient jobs to these poor people.

Causes of Poverty in India


Following are the main causes of poverty in India

  • Inequality in the distribution of income and wealth: During the plan periods, the national income of India has been increasing, but it has not been distributed properly among the different sections of people. The majority of the income of the economy has been enjoyed by the rich. These inequalities in the distribution of wealth and income have worsened the problem of poverty in India.
  • Underdevelopment of an economy: Physical and natural resources are underutilised because of a lack of technology, capital and entrepreneurial ability. Therefore, the productive capacity and gross domestic product of the economy are low. Primitive technology of production occurs in the agricultural sector. They lack irrigation facilities, fertilisers and a high-yielding variety of seeds. This backwardness in agriculture has given rise to rural poverty.
  • Price inflation: Upward trends in the consumer price index during the plan periods led to a fall in the real income of fixed and low-income earners. It decreases the purchasing power and hence a lower standard of living and higher incidence of poverty.
  • High rate of population growth: Because of the increase in population, the dependency burden has increased. Hence, the provision for their minimum needs becomes a crucial problem. This high growth rate of the population also signifies lesser availability of health facilities and other amenities and therefore a lower standard of living.
  • Illiteracy: Because of a lack of literacy, Indian farmers fail to learn new methods of cultivation, and adopt new tools and implements. Also, the village moneylenders succeed in cheating them more easily. On the other hand, urban people are employed as unskilled workers and receive very low wages in return. They mostly live in slums and they lead miserable lives.
  • Social causes: Many social factors such as the caste system, religious faith and beliefs, and joint family system have hindered the process of economic growth.
  • Political causes: The policies of the colonial government have ruined traditional handicrafts and discouraged the development of textile industries. Even after Independence, the government failed to protect the interest of the poor.

Three Dimensions of the Government’s Approach to Reduce Poverty in India

  • The growth-oriented approach is based on the expectation that the effects of economic growth would rapidly increase the gross domestic product and the per capita income. This would reach all sections of society and work for the betterment of poor sections.
  • In the Third Five-Year Plan, the second approach was initiated with a notable programme of food for work.
  • The third approach is to provide minimum basic amenities to the people. Through this approach, programmes have supplemented consumption for the poor, generated employment opportunities and improved health and education.

Anti-Poverty Measures in India


The anti-poverty strategy of the government is based on the promotion of economic growth and targeted anti-poverty programs.

  • National Rural Employment Guarantee Act (NREGA), September 2005
    • 100 days assured employment every year to every household in 200 districts; will be extended to 600 districts later.
    • One-third of jobs are reserved for women.
    • The Central Government will establish National Employment Guarantee Funds.
  • National Food for Work Programme (NFWP), 2004
    • Launched in 150 most backward districts.
    • Open to all rural poor who are in need of wage employment and manual skilled labour.
    • 100% centrally sponsored scheme and food grains free of cost. Pradhan Mantri Gramodaya Yojana (PMGY), 2000
    • Additional central assistance to states for basic services.
  • Swarnajayanti Gram Swarozgar Yojana (SGSY), 1999
    • To assist poor families above the poverty line by organising them into self-help groups through a mix of bank credit and government subsidies.
  • Rural Employment Generation Programme (REGP), 1995
    • To create self-employment opportunities in rural areas and small towns.
    • To create 25 lakh jobs for the programme under the Tenth Five-Year Plan.
  • Prime Minister Rozgar Yojana (PMRY), 1993
    • To create self-employment opportunities for educated unemployed youth in rural areas and small towns.
    • To help set up small businesses and industries.

Related Articles


What is Poverty Line?

Poverty | Meaning, Types, Causes and Measures of Poverty

Food security

Food insecurity

What is human capital?

The problem of Unemployment in India

How to solve the problem of Unemployment


Also, Read


Basic Concepts of Economics

In this article, you will learn basic concepts of Economics. Human wants are countless and are of various kinds. A human is a bundle of desires, with wants infinite in variety and number.» Read more

Basic Problems of an Economy

Professor Lionel Robbins provided the following reasons for the emergence of economic problems: Human wants are unlimited because there is no end to human wants.» Read more

Characteristics of the Indian Economy

The Indian economy consists of all the production units or institutions such as farms, factories, workshops, railways, hospitals, schools and banks.» Read more


Want to Improve your English Grammar? – Improve now