Understanding Poverty Part I

Compiled by

S.Rengasamy

PA

RT

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Definitions, Causes, Types & Effects of Poverty Culture of Poverty, Uses of Poverty, Feminization

of Poverty, Vicious cycle of Poverty

S.Rengasamy -Understanding Poverty -Definitions, Causes & Consequences-(Part-I)

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Contents

Wealth and Poverty ........................................................................................................................ 3 Diagram: Framework to Understand Poverty ................................................................................. 4

Wealth .......................................................................................................................................... 4 Mindmap : Overview of Poverty in India ....................................................................................... 5 Definitions of Poverty ................................................................................................................. 6 Definitions of Poverty ................................................................................................................. 6 Income-Based Definitions: .......................................................................................................... 6 Basic Needs Approaches ............................................................................................................. 6 Participatory Definitions: ............................................................................................................. 7 Box: Summary of Household Wealth Indicators as Described by Poor People .................................... 8 Box: Poverty More Explanations ................................................................................................... 8 Box: Sen‟s Capability Measure ..................................................................................................... 9 Diagram: Vicious Cycle of Poverty ................................................................................................ 9 More Definitions of Poverty ......................................................................................................... 9 More Explanations on Poverty .................................................................................................... 11 Poverty Vulnerability & Inequality .............................................................................................. 12 Deprivation ............................................................................................................................. 12 An Example of Severe Deprivation of Basic Human Need .............................................................. 12 Box: The discovery of poverty ................................................................................................... 13 Literature Review on Poverty ..................................................................................................... 14 Poverty Basic Facts .................................................................................................................. 15 Poverty Synonyms .................................................................................................................... 15

Causes of Poverty ........................................................................................................................ 16 Scheme I &II ........................................................................................................................... 16 Diagram: Poverty & Inequality ................................................................................................... 17 Types of causes of poverty ........................................................................................................ 17 A. Individual ............................................................................................................................ 17 B. Aggregate ........................................................................................................................... 17 Herbert Gans - Functions / Uses of Poverty ................................................................................. 18 Case vs. Generic Theories of Poverty .......................................................................................... 19 What can we do about poverty? ................................................................................................ 19 Acute causes of poverty: ........................................................................................................... 20 Box: How poverty is measured & How it is percieved by the poor .................................................. 20 Entrenched factors associated with poverty: ................................................................................ 21 Diagram: Poverty Causes & Consequences .................................................................................. 22 Oscar Lewis - Culture of poverty ................................................................................................ 23 Box & Diagram: Causes of Poverty ............................................................................................. 24 Box: Feminization of Poverty ..................................................................................................... 25 Causes of Poverty in India (Wikipedia)........................................................................................ 26 Perceptions of Poverty & Traditional picture of the distribution of wealth in the world ...................... 28 Types of Poverty ...................................................................................................................... 29 The Effects of Poverty .............................................................................................................. 30 What is the Cycle of Poverty? .................................................................................................... 30 Diagram: Vicious & Virtuous cycle –Effects of Poverty .................................................................. 32 Box: Cycle of Poverty among Share Croppers & Poverty among child labourers ............................... 33 Diagram: The tragic cycle of interaction among poverty, malnutrition & disease .............................. 34


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Income inequality refers to the differences in income between and among various groups of individuals and households in an economy

Poverty

Introduction Wealth and Poverty People tend to be quite judgmental when it comes to wealth and poverty. On the one hand, ideas

like wealth comes to those who work hard—leads many people to blame the poor for their

poverty. On the other hand, compassion for

the poor (and perhaps envy of the wealthy)

leads others to blame the wealthy for

poverty, judging them too selfish and

unfeeling to assist the poor.

But social sciences examine wealth and

poverty from a more objective viewpoint

than the noneconomist. Social sciences

measure wealth and poverty in several ways.

The three most common measures are

income, assets (meaning accumulated wealth

in the form of money, securities, and real

estate), and socioeconomic metrics. Measures in the last category i.e. socioeconomic metrics go

beyond financial data to account for health, nutrition, infant mortality, sanitation, and other

aspects of human well being.

It is easy to examine wealth and poverty in terms of income. Data on income is readily available,

reliable, and relevant, especially in discussing poverty in several parts of the world, where

inherited wealth is a minor factor and most people live on wages and salaries.

It's useful to think of wealth and poverty in relation to one another. That's because income

inequality is really the underlying issue in poverty, especially in developed nations.

Human social

systems being what

they are, it is often

the differences in wealth that make people feel rich or poor. In a Third World nation, a family

with indoor plumbing, running water, decent food and clothing, and access to health care and

education is quite well off. In the United States, however, millions of people who have those

things are considered poor, because they have little else and those things constitute the bare

essentials in America. In this most developed of economies, dwellings without plumbing are not

legally fit for habitation; public assistance programs, such as Food Stamps, Medicare, and

Medicaid, assure at least adequate levels of nutrition and health care; and public education is

compulsory for children.

Perhaps Webster's Dictionary provides an accurate definition of poverty: the state of one who

lacks a usual or socially acceptable amount of money or material possessions. This is not to

minimize the plight of the poor. It's easily arguable that poverty of any kind is unacceptable in a

society with the riches and opportunities. Also, many poor do live without adequate nutrition,

shelter, and health care. This is especially true of the rural poor, and for the physically,

emotionally, and mentally disabled poor.


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Diagram: Framework to Understand Poverty

Frame work to understand Poverty & Wealth

Poverty

Absolute Poverty

Relative Poverty

Poverty Trap

Causes of Poverty

Measurement of Poverty Lorenz Curve

Gini Coefficient

Size

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Types Shares, Houses, Bank Deposits, Land

Geographical Area

Age Gender

Income Distribution

Flow Individual Household Factors of Production Gender Age Ethnic Group Disposable Income

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Taxation Costs

Market distortion

Incentives Benefits

Subsidies

Legislation

Minimum Wage

Discrimination

Regulation

Structural & Social Change

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Causes of Inequality

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Ownership of resources

Qualification

Motivation

Skills & Ability

Family Size N

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Size & Quality of the Labour force

Climate

Stage of Economic Development

Economic Power

Governance

Equity

Fairness

Social Justice

Equality of distribution

Frame work to understand Poverty & Wealth


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Mindmap : Overview of Poverty in India

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Terms used to describe poverty • Income or consumption poverty • Human (under)development • Social exclusion • Ill-being • (Lack of) capability and functioning • Vulnerability • Livelihood unsustainability • Lack of basic needs • Relative deprivation

Poverty refers to the condition of not having the means to afford basic human needs such as clean water, nutrition, health care, education, 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

Definitions of Poverty A variety of ways to define poverty are available, each with their own strengths and deficiencies:

Income-Based Definitions:

This approach seeks to specify a level of income per

capita in a household below which the basic needs of

the family cannot be satisfied. It shares the difficulties

of the next class of definitions of imposing an

official's or observer's view of necessities. It does not

acknowledge variation in costs of similar goods for

different consumers. The vital importance of non-

market household production and non-monetarized

exchanges in poor families is not counted.

A level of income that is not sufficient to provide the

material needs and comforts viewed as minimal in a

given society.

Situation of a man with a wife (not working) and two

children where total weekly income ... less than the basic

wage plus child endowment ...

Minimum amount of income below which a person cannot attain a predetermined

consumption bundle of goods and services...

people/ households with an INCOME below a certain threshold level irrespective of their

standard of living.

Basic Needs Approaches A set of minimal conditions of life, usually involving the quality of the dwelling place,

degree of crowding, nutritional adequacy and water supply are specified and the

proportion of the population lacking these conditions is used to estimate the degree of

poverty. The advantage of this approach is that different conditions can be specified

appropriate to different settings. However, this reduces comparability of estimates in

different sites. Similarly, it does not take into account the willingness of people to accept

various tradeoffs deliberately (e.g., a lower quality

dwelling for reduced transportation time and expense to

work).

Inability of an individual to satisfy his own basic NEEDS

and the needs of his dependents.

The percent of people expected to die before age 40;

without access to health services or safe water; of adults

who are illiterate; and of children under 5 who are

malnourished.

Whenever the lack of BASIC SECURITY simultaneously

affects several aspects of people's lives, when it is prolonged, and when it seriously

compromises people's chances of regaining their rights and of resuming their responsibilities

in the foreseeable future.


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the inability to attain a minimal standard of living

Participatory Definitions: In this approach, respondents from communities are themselves invited to identify their

perceptions of their needs, priorities and requirements for minimal secure livelihood.

Some sacrifice of comparability of estimates in different communities or at different

times is traded for better information on the identified demands of the individuals

themselves. At times such analyses supplement and reinforce the more quantitative

measures; at other times they reveal a very different experienced reality. A study in

Rajasthan, India, identified 32 conditions which individuals felt necessary for a

satisfactory minimal lifestyle. Comparison of interview results over a decade revealed

that despite reductions in income of the residents, and little change in living conditions of

the kind generally surveyed in basic needs estimates, significant improvements had

occurred in experienced quality of life.

Poverty is humiliation, the sense of being dependent on them, and of being forced to accept

rudeness, insults, and indifference when we seek help.

The poor person has to exist so he can serve the great one, the rich. God made things like that.

—Brazil 1995

Poverty is lack of freedom, enslaved by crushing daily burden, by depression and fear of what

the future will bring. —Georgia 1997

You know good but you cannot do good .That is such a person knows what should be done

but has not got the means. —Ghana 1995a

For a poor person everything is terrible — illness, humiliation, shame. We are cripples; we

are afraid of everything; we depend on everyone. No one needs us. We are like garbage that

everyone wants to get rid of. —Blind woman from Tiraspol, Moldova 1997

If one does not own land, a house, household property, or domestic animals, then the person is

considered to be poor. —Uganda 1998

Water is life, and because we have no water, life is miserable. —Kenya 1997

It’s the cost of living, low salaries, and lack of jobs. And it’s also not having medicine, food

and clothes. —Brazil 1995

When I leave for school in the mornings I don’t have any breakfast. At noon thereis no lunch,

in the evening I get a little supper, and that is not enough. So when I see another child eat ing,

I watch him, and if he doesn’t give me something I think I’m going to die of hunger. —A 10-

year-old child, Gabon 1997

No Excuse 2015 United Nations


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Summary of Household Wealth Indicators as Described by Poor People Relatively Well-Off Households • Possess solid and stable houses that are usually renovated every 15 years • Have transportation, either a motorbike or a bicycle or both • Own a television • Can send their children to school • Never lack money even after the harvest has been eaten or sold • Are able to save money • Have a gardens with useful plants and trees Average Households • Have a stable house that usually does not need renovating for ten years • Own a TV and/or a radio • Have enough food all year round • Can send their children to school • Have wells or easy access to water Poor Households • Live in unstable houses, often made with mud • Have no TV or radio • Aren’t able to save money • Some have children who can’t go to school, or have to leave school prematurely • Usually have enough food until the next harvest, although sometimes lack food for one to two months per year • Are unable to utilize surrounding natural resources to their benefit Very Poor Households • Live in very unstable houses that often need to be rebuilt every two to three years • Have no wells or easy access to fresh water

Source: Hanoi Research and Training Center for Community -- Vietnam

Box: Summary of Household Wealth Indicators as Described by Poor People

Box: Poverty More Explanations

Poverty is “pronounced deprivation in well-being.” The conventional view links well-being

Poverty defined is the “extent to which an individual [or community] goes without resources.” The resources are the following: Financial: Having the money to purchase goods and services. Emotional: Being able to choose and control emotional responses, particularly to negative situations, without engaging in self-destructive behavior. This is an internal resource and shows itself through stamina, perseverance, and choice. Mental: Having the mental abilities and acquired skills (reading, writing, computing) to deal with daily life. Spiritual: Believing in divine purpose and guidance. Physical: Having physical health and mobility. Supportive Systems: Having friends, family and backup resources available to access in times of need. These are external resources. Relationship/Role Models: Having frequent access to adult(s) who are appropriate, who are nurturing to children and youth and who do not engage in self-destructive behavior. Knowledge of Hidden Rules: Knowing the unspoken cues and habits of a group. Coping Strategies: Being able to engage in procedural self-talk and the mindsets that allow issues to be moved from the concrete to the abstract. It is the ability to translate from the personal to the issue.


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primarily to command over commodities, so the poor are those who do not have enough income

or consumption to put them above some adequate minimum threshold. This view sees poverty

largely in monetary terms.

Poverty may also be tied to a specific type of consumption; thus someone might be house poor or

food poor or health poor. These dimensions of poverty can often be measured directly, for

instance by measuring malnutrition or literacy.

The broadest approach to well-being (and poverty) focuses on the “capability” of the individual

to function in society. The poor lack key capabilities, and may have inadequate income or

education, or be in poor health, or feel powerless, or lack political freedoms.

Box: Sen’s Capability Measure

Diagram: Vicious Cycle of Poverty

More Definitions of Poverty

Sen’s Capability Measure ―Poverty must be seen as the deprivation of basic capabilities rather than merely the lowness of incomes‖ (Sen, 1999) Amartya Sen‟s Development as Freedom (1999) defines poverty as anything that severely decreases a person‟s capabilities. Sen‟s definition is more successful in incorporating the complex range of issues that may be a part of the deprivation, than the other measures. Sen goes beyond basic indicators such as a lack of income or decline in health and nutrition. For example, the other measures would include unemployment as a cause of poverty because of its affects on income and nutrition and something which might be solved by cash transfers or education. Sen however, acknowledges that in reality there are also issues of psychological harm, loss of motivation, loss of skill, decline in self-confidence, disruption of family relations, social stigma, and gender asymmetries. None of these things have anything to do with income, or even the standard quality of life indicators, however they can be just as much of a problem. Sen‟s definition of poverty should play a key role in informing improvements in poverty alleviation schemes in Latin America.


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Poverty is an income level below some minimum level necessary to meet basic needs.

This minimum level is usually called the “poverty line”. What is necessary to satisfy

basic needs varies across time and societies. Therefore, poverty lines vary in time and

place, and each country uses lines which are appropriate to its level of development,

societal norms and values. But the content of the needs is more or less the same

everywhere. Poverty is hunger. Poverty is lack of shelter. Poverty is being sick and not

being able to see a doctor. Poverty is not having access to school and not knowing how to

read. Poverty is not having a job, is fear for the future, living one day at a time. Poverty is

losing a child to illness brought about by unclean water. Poverty is powerlessness, lack of

representation and freedom.

Poverty is the deprivation of common necessities such as food, clothing, shelter and safe

drinking water, all of which determine our quality of life. It may also include the lack of

access to opportunities such as education and employment which aid the escape from

poverty and/or allow one to enjoy the respect of fellow citizens. According to Mollie

Orshansky who developed the poverty measurements used by the U.S. government, “to

be poor is to be deprived of those goods and services and pleasures which others around

us take for granted”.

Poverty is a condition characterized by severe deprivation of basic human needs,

including food, safe drinking water, sanitation facilities, health, shelter, education and

information. It depends not only on income but also on access to services. It includes a

lack of income and productive resources to ensure sustainable livelihoods; hunger and

malnutrition; ill health; limited or lack of access to education and other basic services;

increased morbidity and mortality from illness; homelessness and inadequate housing;

unsafe environments and social discrimination and exclusion. It is also characterized by

lack of participation in decision making and in civil, social and cultural life. It occurs in

all countries: as mass poverty in many developing countries, pockets of poverty amid

wealth in developed countries, loss of livelihoods as a result of economic recession,

sudden poverty as a result of disaster or conflict, the poverty of low-wage workers, and

the utter destitution of people who fall outside family support systems, social institutions

and safety nets.

Fundamentally, poverty is a denial of choices and opportunities, a violation of human

dignity. It means lack of basic capacity to participate effectively in society. It means not

having enough to feed and cloth a family, not having a school or clinic to go to, not

having the land on which to grow one’s food or a job to earn one’s living, not having

access to credit. It means insecurity, powerlessness and exclusion of individuals,

households and communities. It means susceptibility to violence, and it often implies

living on marginal or fragile environments, without access to clean water or sanitation.

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Definitions of Poverty


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More Explanations on Poverty Poverty is the absence of any two or more of the following eight basic needs: 1. Food: Body Mass Index must be above 16. 2. Safe drinking water: Water must not come

from solely rivers and ponds, and must be available nearby (less than 15 minutes‟ walk each way).

3. Sanitation facilities: Toilets or latrines must be accessible in or near the home.

4. Health: Treatment must be received for

serious illnesses and pregnancy. 5. Shelter: Homes must have fewer than four

people living in each room. Floors must not be made of dirt, mud, or clay.

6. Education: Everyone must attend school or otherwise learn to read.

7. Information: Everyone must have access to

newspapers, radios, televisions, computers, or telephones at home.

8. Access to services such as education, health, legal, social, and financial (credit) services.

And there‟s another definition by Peter Townsend:

Individuals, families and groups in the population can be said to be in poverty when they lack the resources to obtain the types of diet, participate in the activities and have the living conditions and amenities which are customary, or are at least widely encouraged or approved, in the societies to which they belong.

Their resources are so seriously below those commanded by the average individual or family that they are, in effect, excluded from ordinary living patterns and activities. There are, of course, many other definitions, but if we stick to these examples and summarize them, we can conclude that poverty

is the impossibility to meet certain basic needs or the absence of certain necessities or resources:

Food* Clothing* Shelter* Sanitation*

Clean Water* Health** Education** Work**

Power** Representation** Freedom**

Information** Trust in the Future (No Fear)***

Dignity*** Self-Esteem*** Independence***

Access to Opportunities and Choices Respect ***

All of these needs and resources are valuable and important in themselves, but one can distinguish them according to certain types. For example, a person is not necessarily poor if he is uneducated. There are many uneducated rich

people. And all poor people aren‟t necessarily without an education. So one can propose the following distinction: Food, clothing, shelter, sanitation and clean water are needs that are directly linked to poverty. A person is poor if he/ she lack one of these resources (and you may even die). I call these first-level-resources (marked with *). Health, education, work, representation, power, freedom and information, are resources, the lack of which can (but doesn‟t have to) make one poor – poor in the sense of not having the first types of resources – and the presence of which is necessary to escape poverty. I call these second-level-resources or supporting resources (marked with **). Respect, self-esteem, dignity, inclusion, participation, trust in the future and the absence of fear, and opportunities, are resources which, like health, education etc., a person may lose when he/ she become poor, but which do not really help a person to escape poverty. I call these third-level-resources or concomitant resources (marked with ***). When looking at the different definitions cited above, one can see that poverty has many dimensions: A material dimension (food, clothing etc.) A psychological dimension (respect, self-esteem, trust, fear) A political dimension (power, representation) and A social dimension (education, health, work). The latter two dimensions point to the fact that poverty, while often suffered alone and in solitude, requires social cooperation if it is to be eliminated. The material, political and social dimensions can, to some extent, be measured, which is necessary if we want to have an idea of the importance of the problem, its evolution over time, and the effectiveness and success of policy measures aimed to combat poverty. One can measure nutrition, housing, income, access to certain services, standard of living, quality of life etc. The psychological dimension is much more difficult to measure, but no less important. This dimension also shows us that poverty is not just a matter of the current state one is in, and the resources one has or doesn‟t have. It is also about vulnerability, about the future, about trust and fear. And it also has a relative side (obvious from the Townsend definition given above), which attaches itself to the problem of our current level of resources (the absolute side): poverty means comparing yourself to others, feeling like a failure, humiliated, shameful etc.


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Poverty is related to, but distinct from, inequality and vulnerability. Inequality focuses on the distribution of attributes, such as income or consumption, across the whole population. In the context of poverty analysis, inequality requires examination if one believes that the welfare of an individual depends on their economic position relative to others in society. Vulnerability is defined as the risk of falling into poverty in the future, even if the person is not necessarily poor now; it is often associated with the effects of “shocks” such as a drought, a drop in farm prices, or a financial crisis. Vulnerability is a key dimension of well-being since it affects individuals‟ behavior (in terms of

investment, production patterns, and coping strategies) and the perceptions of their own situations.

Poverty Vulnerability & Inequality

Deprivation Deprivation can be conceptualized as a continuum which ranges from no deprivation through

mild, moderate and severe deprivation to extreme deprivation.

In order to measure absolute poverty, it is necessary to define the threshold measures of severe

deprivation of basic human need for:

An Example of Severe Deprivation of Basic Human Need

Continuum of deprivation

Mild Moderate Severe

No Deprivation Extreme Deprivation

1. Food 2. Safe drinking water

3. Sanitation facilities 4. Health

5. Shelter 6. Education

7. Information 8. Access to services

Explanations of Severe Deprivation of Basic Human Need for Youth 1) Severe Food Deprivation– Body Mass Index of 16 or below (severe underweight).

2) Severe Water Deprivation - access only to surface water (e.g. rivers, ponds) for drinking or living in households where the nearest source of water was more than 15 minutes away –30min round trip (e.g. indicators of severe deprivation of water quality or quantity). 3) Severe Deprivation of Sanitation Facilities – no access to a toilet of any kind in the vicinity of their dwelling, e.g. no private or communal toilets or latrines. 4) Severe Health Deprivation – Women who did not receive treatment for a recent serious illness or who did not receive any antenatal care or who did not receive any assistance with birth or who did

not receive a tetanus inoculation during her pregnancy. Men who did not receive treatment for a recent serious illness. 5) Severe Shelter Deprivation – living in dwellings with 4 or more people per room (severe overcrowding) or in a house with no flooring (e.g. a mud floor). 6) Severe Education Deprivation – youth who never attended school and who are also illiterate 7) Severe Information Deprivation – no access to newspapers, radio or television or computers or phones at home (e.g. no information sources). Absolute Poverty threshold is equal to two or more severe deprivations of basic human need


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Box: The discovery of poverty

The discovery of poverty

How 'the poor' were invented by the West... How the development idea was rescued from its first crisis... The vital difference between frugality and destitution

Poor is not necessarily poor Binary divisions, such as healthy/ill, normal/ abnormal or, more pertinently, rich/poor, are like

steamrollers of the mind; they level a multiform world, completely flattening anything which does not fit. The stereotyped talk of 'poverty' has disfigured the different, indeed contrasting, forms of poverty beyond recognition. It fails to distinguish, for example, between frugality, destitution, and scarcity.

Frugality is a mark of cultures free from the

frenzy of accumulation. In these, the necessities of everyday life are mostly won from subsisten ce production with only the smaller part being purchased on the market. To our eyes, people have rather meagre possessions; maybe the hut and some pots, with money playing only a marginal role.

Instead, everyone usually has access to fields, rivers and woods, while kinship and community duties guarantee services which elsewhere must be paid for in hard cash. Despite being in the 'low-income bracket', nobody goes hungry. What is more, the private accumulation of wealth results in social ostracism - prestige is gained precisely by spending even small profits on good deeds for the community. Here is a way of life maintained by a culture which recognizes and cultivates a state of sufficiency; it only turns into demeaning 'poverty' when pressurized by an accumulating society.

Destitution, on the other hand, becomes rampant as soon as frugality is deprived of its

foundation. Along with community ties, land, forest and water are the most important prerequisites for subsistence without money. As soon as they are taken away or destroyed, destitution lurks. Again and again, peasants, nomads and tribals have fallen into misery after being driven from their land, savannahs and forests. Indeed the first state policies on poverty, in sixteenth-century Europe, were a response to the sudden appearance of vagabonds and mendicancy provoked by enclosures of the land- it had traditionally been the task of communities to provide for widows and orphans, the classical cases of unmaintained poor people.

Scarcity derives from modernized poverty. It affects mostly urban groups caught up in the money

economy as workers and consumers whose spending power is so low that they fall by the wayside. Not only does their predicament make them vulnerable to the whims of the market, but they also live in a situation where money assumes an ever-increasing importance. Their capacity to achieve through

their own efforts gradually fades, while at the same time their desires, fuelled by glimpses of high society, spiral towards infinity; this scissor-like effect of want is what characterizes modern poverty.

new internationalist issue 232 - June 1992


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Literature Review on Poverty

The Literature review shows that poverty definitions currently used by various countries (especially

developing) for administering their poverty programmes are inadequate, because very little research has been done in this area. In fact, it is not easy to have one uniform definition of poverty because there are a number of specific issues that are normally linked with poverty. These are: The historical definitions of poverty; The use of index numbers in the measurement of poverty; Family size and composition adjustments on measures of poverty; Geographical variation in public service provision by type of service; Regional income differences; Wealth and assets and consumption as measures of poverty; Poverty standards and the consumption of leisure; Determinants of the turn-over rates of poor families; Social and economic proxies for poverty; Social indicators of poverty; and

State administrative definitions of poverty. It is a known fact that the extent of poverty is both severe and staggering all over the world. In this context, many studies report that There exists an overlap between poverty and inequality, and that they are closely related; incidence of poverty correlates with low levels of health, education, and nutrition, inadequate

shelter and other unsatisfactory social conditions; Poverty in most of the developing countries, despite being urbanized, still remains overwhelming a

rural phenomenon; Poverty tends to be concentrated in the areas with little or no access to health, education and

infrastructural services like transport and communications; Specific characteristics of the poor are limited to only to bi-variate correlations of the poor, and

not to joint interrelationships with other characteristics of poverty. Besides, poverty has many dimensions too. These are briefly mentioned below: Larger household size is associated with greater incidence of poverty as measured in terms of

household consumption or income per person; Child- adult ratios are larger in poor households; Higher mortality, especially of children, among the poor households stimulates excess

replacement births; There exist a strong correlation between high fertility and poverty; There is widespread feminization of poverty ( especially in male-dominated societies) in the sense

that young females are more exposed to poverty-induced nutritional and health risks; Poor households depend heavily on unskilled labour income; Poor households often over exploit their immediate physical environment and the subsequent

degradation intensifies poverty; Poor households increasingly lose access in private and common resources; and Poverty in urban areas is often associated with pollution due to the concentration of people,

industry, and traffic. Poverty gets normally concealed because of the marginalization of the poor by the so-called rich

people. All these contentions constitute what we term as the poverty syndrome, especially in developing countries.


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Poverty Basic Facts

Poverty Synonyms

INCOME GROUP

This group represents 15% of the world's population with an income of $8,900 or more per person

H

This group represents the majority of the world's population - roughly 55%. The average income is $725 a year - about $2 a day - although many families earn much less.

L

This group represents roughly 30% of the world's population. Parents in this group earn between $725 and $8,900 a year

M

HEALTH & NUTRITION

Healthcare is out of the question, so for most families death is all too familiar, with families expecting to lose two to three of their children before they turn five

L

This income group is able to afford a nutritious daily diet and has access to the best medical care

H

. Levels of access to good nutrition and medical care vary greatly in this group. People are always living on the edge

M

BASIC EDUCATION

Children may go to school - for a few years anyway - especially if they are boys. M Children are born destined to go to school; the only uncertainty is how many years they will study after high school.

H

School is a luxury few children will ever experience. Most girls don't even bother to dream about school.

L

FINANCIAL SECURITY

It would take losing only one harvest to drought, or a serious illness, to throw a family in this group into poverty. But if the family is lucky, parents can find a way to join a community credit group to get access to a small loan

M

As part of this income group, families have access to credit and money that most others do not. It's a good life because families have access to everything they need and security to enjoy it

H

Every day is a struggle for families in this group to meet their basic needs. Finding food, water, and shelter can consume the whole day. For many mothers, it would not be uncommon to walk 8 to 16 kilometres to find clean water; spend several more hours working in the fields and of course taking care of the children.

L

HOUSING

Many families in this group are homeless or living in structures so flimsy that a hard rain or strong wind becomes life threatening

L

Families in this group live in comfortable and secure housing. Parents own at least one car, and probably have two televisions

H

A family in this group probably owns no land and lives in overcrowded housing with poor plumbing. The village or town this family lives in offers electricity, but it must ration its use.

M

WORK

Parents in this group may work as day labourers, domestic help, or perhaps as migrant workers. If parents could get better skills training, they might have a chance at a higher paying job.

M

When a family in this group takes its annual two-week vacation, parents don't worry about their jobs disappearing.

L

If parents do work, they are probably tenant farmers or landless day workers. They receive few benefits from the crops they work on; they would prefer to grow their own food for their kids

L

Poverty —Synonyms 1. penury. Poverty, destitution, need, want imply a state of privation and lack of necessities. Poverty denotes serious lack of the means for proper existence: living in a state of extreme poverty. Destitution, a somewhat more literary word, implies a state of having absolutely none of the necessities of life: widespread destitution in countries at war. Need emphasizes the fact that help or relief is necessary: Most of the people were in great need. Want emphasizes privations, esp. lack of food and clothing: Families were suffering from want. 3. meagerness.


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More Poverty Bad Governance Absence of Democracy Corruption Rights Violations No Rule Of Law Economic Causes

Economic Stagnation/Recession Lack of Economic Freedom Protectionism/Trade Restrictions Child Labor Resource Curse

Foreign Debt Social Causes Lack of Education/Literacy Lack of Charity (Egoism) Homelessness Discrimination Gender Discrimination

Modern Slavery War Violence Military Spending Health Causes Lack of Health Care HIV-AIDS Life Expectancy Infant Mortality Maternal Mortality Historical Causes Colonialism Accidental Causes

Famine Floods or other Natural Disasters Individual Causes Lack of Responsibility Combined Causes Poverty Trap

Less Poverty Good Governance Democracy Fighting Corruption Respect For Rights Rule of Law Economic Causes

Economic Growth Economic Freedom Fighting Protectionism & Trade Restrictions Fighting Child Labor Debt Relief Social Causes

Education/Literacy Charity, Providing Adequate Housing

Fighting Discrimination Fighting Gender Discrimination Fighting Modern Slavery

Peace Limit Military Spending Health Causes Providing Adequate Health Care Fighting Aids Life Expectancy

Fighting Infant Mortality Fighting Maternal Mortality Political Causes Redistribution And Economic Rights Individual Causes Assuming Responsibility, Self-Reliance

Causes of poverty When you know what kind of poverty people suffer, and when you have measured their poverty, you can start to look at the causes of their poverty. This will be important once you start working on the solutions.

The causes can be of different kinds: Accidental causes, such as drought,

disease, birth defects, handicaps etc.

Historical causes, such as colonialism

Economic causes, such as energy prices, food prices etc.

National political causes, such as bad governance, corruption, absence of the rule of law, rights violations, war, oppression, misguided agricultural policies, lack of investment in economic infrastructure and education etc.

International political causes, such as trade policy, protectionism etc.

Social causes, such as racism, sexism, discrimination, ethnic division

Individual causes, irresponsible behavior, self-destructive behavior

Demographic causes such as overpopulation or a high percentage of people who are too young or too old to be economically active

Geographic causes such as access to fertile land, fresh water, minerals, energy, and other natural resources

Environmental causes, such as climate change, soil erosion and desertification etc.

Poverty traps

Causes of Poverty Scheme I &II Scheme I Scheme I

http://filipspagnoli.wordpress.com/2008/05/02/human-rights-facts-3/

http://filipspagnoli.wordpress.com/2008/05/20/human-rights-facts-20-from-democracy-to-prosperity/

http://filipspagnoli.wordpress.com/2008/05/02/human-rights-facts-3/

http://filipspagnoli.wordpress.com/2008/05/14/human-rights-cartoon-78/


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Diagram: Poverty & Inequality

Types of causes of poverty A. Individual Poverty is explained by individual circumstances and/or characterstics of poor people. Some

examples are:

Amount of education, skill, experience, intelligence.

Health, handicaps, age.

Work orientation, time horizon, culture of poverty.

Discrimination, together with race, sex, etc.

B. Aggregate There are two types of aggregate poverty theory: case and generic. There is no agreement on

which is the correct explanation of most poverty.

1. Case. Add up all poverty explained by individual theories, and that is equal to total or

aggregate poverty. In other words, according to case theories of poverty, individual and

aggregate explanations are really the same. According to these theories, aggregate poverty is just

the sum of individual poverty.

2. Generic. Poverty is explained by general, economy-wide problems, such as

inadequate non-poverty employment opportunities

inadequate overall demand (macro problems, macro policy)

low national income (Less Developed Country)

If generic theories are correct, poverty is caused by one set of forces (general, economy-wide

problems) but distributed according to individual theories.


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Herbert Gans Functions / Uses of Poverty

Does poverty have functions to explain its persistence? Poverty makes possible the existence or expansion of respectable professions and occupations (e.g., penology, criminology, social work, public health). Poverty provides jobs for social scientists, social workers, journalists, and other 'poverty warriors.' The functions of poverty:

1. Poverty ensures that society's 'dirty work' will get done. Poverty provides a low-wage labor pool that is willing--or rather, unable to be unwilling--to preform dirty work at low cost.

2. Because the poor are required to work at low wage, they subsidize a variety of economic activities that benefit the affluent. The poor pay a larger share of their income in property and sales taxes.

3. Poverty creates jobs for many occupations that serve the poor: police, gambling, peacetime army, etc.

4. The poor buy goods others do not want and thereby prolong their economic usefulness. 5. The poor can be identified and punished as alleged or real deviants to uphold the legitimacy of

conventional norms. To justify the desirability of hard work and thrift, for example, the defender of these norms must be able to find persons they can accuse of being lazy and spendthrifts.

6. The poor offer vicarious participation in deviant activities in which they are alleged to participate. 7. The poor serve as culture heroes and as cultural artifacts. 8. Poverty helps to guarantee the status of those who are not poor. In every hierarchical society,

there has to be someone at the bottom to hold up the rest of the population. 9. The poor aid the upward mobility of groups just above them in the class hierarchy. Many persons

have entered the middle class by providing goods and services to the poor. 10. The poor help to keep the aristocracy busy as providers of charity. 11. The poor, being powerless, can be made to absorb the costs of change and growth in American

society (e.g., 'urban renewal' vs. 'poor removal'). 12. The poor facilitate and stabilize the American political process because they vote and participate

less than other groups. 13. Not only does the alleged moral deviancy of the poor reduce the moral pressure on the political

economy to reduce poverty, but socialist alternatives can be made to look unattractive if those who will benefit most from them can be described as lazy, spendthrift, dishonest, and promiscuous.

Herbert Gans - Functions / Uses of Poverty


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Poverty Cycle

Case vs. Generic Theories of Poverty What is the Difference between case or generic causes of poverty Answer: It makes a lot of difference. Example1: Suppose somehow we significantly reduce racial discrimination. Will total poverty

fall? Case answer: Yes. Generic answer: No. Poverty will only be redistributed. Example 2: Suppose we give poor people effective skill training and compensatory education. Will total poverty fall? Case answer: Yes. Generic answer: No. Poverty will only be redistributed.

Case or generic Causes –Which one is right? 1. Remember that the things that cause poverty in case theories explain its distribution in generic theories. Because of this, both theories are consistent with the same facts (statistics). Therefore, it is very difficult, maybe impossible, to determine which is correct through direct test. 2. There's some indirect evidence pointing to generic theories: For example, there is the failure of poverty to fall during periods of large training programs, and the failure of poverty to fall with rise in general educational level of population. Further indirect evidence later on in the course. 3. Most people assume case theories are correct. Why?

Micro experience (fallacy of composition -- assuming that what's true of the part must be true of the whole).

Poverty scholars study the poor instead of the economy. Antipoverty policy would be too hard (expensive) if generic theories were true. Blaming the victim. A desire to help the poor. (P.S. If generic theories are true, how can you help the poor?)

What can we do about poverty? 1. If case theories are correct: Address the individual cause of poverty. For example, if poverty is caused by inadequate skills or education, then the solution is skill training or compensatory education. If poverty is caused by discrimination, then the solution is antidiscrimination policies. 2. If generic theories are correct: Improve the quantity and quality of jobs.

Limited job opportunities

Poor education

outcomes

Feelings of rejection

frustration & failure

Low energy & low concentration levels

Poor diet & health care

Family breakdown

Low self esteem,

alcohol, wife & child abuse

Low salary dependence on social security

Limited access to housing –rental accommodation

Poverty


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How poverty is measured

The current poverty measure was developed in the 1960s and is based on the cost of an emergency food diet and multiplying it by three

How poverty is perceived by the poor

Acute causes of poverty: Warfare: The material and human destruction caused by warfare is a major development

problem. For example, from 1990 to 1993, the period encompassing Desert Storm, per capita

GDP in Iraq fell from $3500 to $761. The drop in average income, while a striking

representation of the drop in the well-being of the average Iraqi citizen in the aftermath of the

war, fails to capture the broader affects of damages to the infrastructure and social services,

such as health care and access to clean water.

Agricultural Cycles: People who rely on fruits and vegetables that they produce for

household food consumption (subsistence farmers) often go through cycles of relative

abundance and scarcity. For many families that rely on subsistence production for survival,

the period immediately prior to harvest is a 'hungry period.' During these periods of scarcity,

many families lack sufficient resources to meet their minimal nutritional needs. Being

familiar with these cycles has enabled development practitioners to anticipate and prepare for

periods of acute need for assistance.

Droughts and Flooding: Besides the immediate destruction caused by natural events such as

hurricanes, environmental forces often cause acute periods of crisis by destroying crops and

animals. Box: How poverty is measured & How it is percieved by the poor

Natural Disasters: Natural disasters such as hurricanes and earthquakes have devastated

communities throughout the world. Developing countries often suffer much more extensive

and acute crises at the hands of natural disasters, because limited resources inhibit the

construction of adequate housing, infrastructure, and mechanisms for responding to crises.


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Entrenched factors associated with poverty: Colonial Histories: One of the

most important barriers to

development in poor countries is

lack of uniform, basic infrastructure,

such as roads and means of

communication. Some development

scholars have identified colonial

history as an important contributor

to the current situation. In most

countries with a history of

colonization, the colonizers

developed local economies to

facilitate the expropriation of

resources for their own economic

growth and development.

Centralization of Power: In

many developing countries, political

power is disproportionately

centralized. Instead of having a

network of political representatives

distributed equally throughout

society, in centralized systems of

governance one major party,

politician, or region is responsible

for decision-making throughout the

country. This often causes

development problems. For

example, in these situations

politicians make decisions about

places that they are unfamiliar with,

lacking sufficient knowledge about the context to design effective and appropriate policies and

programs.

Corruption: Corruption often accompanies centralization of power, when leaders are not

accountable to those they serve. Most directly, corruption inhibits development when leaders

help themselves to money that would otherwise be used for development projects. In other cases,

leaders reward political support by providing services to their followers.

Warfare: Warfare contributes to more entrenched poverty by diverting scarce resources

from fighting poverty to maintaining a military. Take, for example, the cases of Ethiopia and

Eritrea. The most recent conflict over borders between the two countries erupted into war during

1999 and 2000, a period when both countries faced severe food shortages due to drought.


22

Lots of homeless

people

Health hazard

Little income

No income Lack of money

Can affect anyone

No one wants to be

in poverty

Lonelines

s

Unhygenic

Don’t get paid

Free food for the poor

Provides shelter

Volunteers

work there

Lots of people go there

Could become

sick

Become

sad

Money become suicidal

Not only

homeless but also

retarded & addicted

Poverty (Being Poor)

Free meals (Soup

kitchen)

Only while eating

Environmental degradation: Awareness and concern about environmental degradation

have grown around the world over the last few decades, and are currently shared by people of

different nations, cultures, religions, and social classes. However, the negative impacts of

environmental degradation are disproportionately felt by the poor. Throughout the developing

world, the poor often rely on natural resources to meet their basic needs through agricultural

production and gathering resources essential for household maintenance, such as water,

firewood, and wild plants for consumption and medicine. Thus, the depletion and contamination

of water sources directly threaten the livelihoods of those who depend on them. Diagram: Poverty Causes & Consequences

Social Inequality: One of the more entrenched sources of poverty throughout the world is

social inequality that stems from cultural ideas about the relative worth of different genders,

races, ethnic groups, and social classes. Ascribed inequality works by placing individuals in

different social categories at birth, often based on religious, ethnic, or 'racial' characteristics. In

South African history, apartheid laws defined a binary caste system that assigned different rights

(or lack thereof) and social spaces to Whites and Blacks, using skin color to automatically

determine the opportunities available to individuals in each group.


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Oscar Lewis - Culture of poverty

Oscar Lewis - Culture of poverty The culture of poverty concept is a social theory explaining the cycle of poverty. Based on the concept that the poor have a unique value system, the culture of poverty theory suggests the poor remain in poverty because of their adaptations to the burdens of poverty. The term "subculture of poverty" (later shortened to "culture of poverty") made its first prominent appearance in the ethnography Five Families: Mexican Case Studies in the Culture of Poverty (1959) by anthropologist Oscar Lewis. Lewis struggled to render "the poor" as legitimate subjects whose lives were transformed by poverty. He argued that although the burdens of poverty were systemic and therefore imposed upon these members of society, they led to the formation of an autonomous subculture as children were socialized into behaviors and attitudes that perpetuated their inability to escape the underclass. Lewis gave some seventy characteristics (1996 [1966], 1998) that indicated the presence of the culture of poverty, which he argued was not shared among all of the lower classes. The people in the culture of poverty have a strong feeling of marginality, of helplessness, of dependency, of not belonging. They are like aliens in their own country, convinced that the existing institutions do not serve their interests and needs. Along with this feeling of powerlessness is a widespread feeling of inferiority, of personal unworthiness. This is true of the slum dwellers of Mexico City, who do not constitute a distinct ethnic or racial group and do not suffer from racial discrimination. In the United States the culture of poverty that exists in the Negroes has the additional disadvantage of racial discrimination. People with a culture of poverty have very little sense of history. They are a marginal people who know only their own troubles, their own local conditions, their own neighborhood, their own way of life. Usually, they have neither the knowledge, the vision nor the ideology to see the similarities between their problems and those of others like themselves elsewhere in the world. In other words, they are not class conscious, although they are very sensitive indeed to status distinctions. When the poor become class conscious or members of trade union organizations, or when they adopt an internationalist outlook on the world they are, in my view, no longer part of the culture of poverty although they may still be desperately poor. (Lewis 1998) Although Lewis was concerned with poverty in the developing world, the culture of poverty concept proved attractive to US public policy makers and politicians. It strongly informed documents such as the Moynihan Report (1965) and the War on Poverty more generally. Since the 1960s critics of culture of poverty explanations for the persistence of the underclasses have attempted to show that real world data do not fit Lewis' model (Goode and Eames, 1996). Despite decades of this criticism by prominent sociologists, anthropologists and other academics who argue that descriptions of the poor as being culturally unique have little explanatory power, the culture of poverty concept persists in popular culture.


24

Box & Diagram: Causes of Poverty But these processes can be helpful only if the policies go to those people for whom it is meant. The clash between the central government and the state government often results in the lack of implementation of these policies. So it is very important that the governments do not play power politics when it comes to a serious issue such as poverty.

Year All India % Rural % Urban% 1973 54.9 56.4 49.0 1978 51.3 53.1 45.2 1983 44.5 45.7 40.8 1988 38.9 39.1 38.2 1994 36.0 37.3 32.4 1999 26.1 27.1 23.6

Causes for Rural Poverty Some of the basic reasons of rural poverty in India are: Unequal distribution of income. High population growth. Illiteracy. Large families. 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.

Steps Taken by Government to Reduce Rural Poverty 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. Causes for Urban Poverty The causes of urban poverty in India are: 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.

Jawaharlal Nehru National Urban Renewal Mission

Social

Overpopulation Population density

Birth rates

Distribution of resources

Lack of education

Environmental degradation

Economic trends Demographic shifts

Eco

no

mic

High rate of unemployment

Unfair trade

Corruption (Economically-wise) Tackling corruption Poor Governance

Po

liti

ca

l

Prejudice and inequality Centralization of Power

External & Other Causes

Historical

Civil War

Natural Disasters

Uneven distribution of resources

Lack of adequate resources in the world economy

Ca

use

s o

f P

ove

rty

Causes of 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


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Box: Feminization of Poverty

Feminization of Poverty

The feminization of poverty is the “growing female share of the population living under the poverty line” The Feminization of Poverty is the term given to the phenomenon in which women experience poverty at far higher rates than men. History of the term The idea of a „feminization of poverty‟ dates back to the 1970s but was popularized from the 1990s on by some United Nations documents The concept became renowned as a result of a study by Diana Pearce which focused on the gender patterns in the evolution of poverty rates in the United States between the beginning of the 1950s and the mid-1970s. It was initially used to mean “an increase of women among the poor” and “an increase of female headed households among the poor households”. This approach was abandoned because the measures of feminization of poverty based on them can be affected by changes in the demographic composition of population - for instance, the impoverishment of female headed households can be neutralized by a reduction of the numbers of female headed households in the population. For that reason, subsequent studies adopted an alternative approach, comparing the evolution of the levels of poverty within each gender group. Causes What causes the impoverishment of women may also cause the impoverishment of men. Therefore, what matters most to understand the causes of the feminization of poverty is not what causes poverty in aggregate terms but the gender inequalities behind poverty. In fact, since feminization is a process, women are prone to suffer greater and longer forms of poverty. The poverty suffered by women is far more severe than men and is rising disproportionately. Women headed households are the poorest of the poor and the hardships from the family are transferred to the children, continuing the poverty.

The feminization of poverty, among many other factors, may be caused by changes in: Family composition Dissolution of marital unions, constitution of families without these unions, higher male mortality Family organization Gender division of labor and consumption within the household, gender roles regulating the control over household resources Inequality in the access to public services or in their quality Barriers to education of girls, educational segregation by sex, lack of women specific health attention Inequality in social protection Contributory pensions systems reproducing previous labor market inequalities, lower access to pensions and social assistance by women, inequality in benefit concession or in benefit values in targeted policies Labor market inequalities Occupational segregation, intra-career mobility, differential levels of employment in paid work, wage discrimination, duration of work shifts. Legal, paralegal and cultural constrains in public life Property rights, discrimination in the judiciary system, constrains in community and political life, etc.


26

Causes of Poverty in India (Wikipedia)

Causes of Poverty in India (Wikipedia) Caste system

Casteism is widespread in rural areas, and continues to segregate Dalits. Dalits constitute the bulk of poor and unemployed However, the steady rise and empowerment of the Dalits through social reforms and the implementation of reservations in employment and benefits.

Caste explanations of poverty fail to account for the urban/rural divide. Using the UN definition of poverty 65% of rural forward castes are below the poverty line.

British era

The Mughal era ended at about 1760. Jawaharlal Nehru claimed "A significant fact which stands out is that those parts of India which have been longest under British rule are the poorest today." The Indian economy was purposely and severely de industrialized (especially in the areas of textiles and metal-working) through colonial privatizations, regulations, tariffs on manufactured or refined Indian goods, taxes, and direct seizures..

In 1830, India accounted for 17.6% of industrial production against Britain's 9.5%, but by 1900 India's share was down to 1.7% against Britain's 18.5%. (The change in industrial production per capita is even more extreme due to Indian population growth). This is because Europe - particularly Britain - industrialized before the rest of

the world.

This view claims that British policies in India exacerbated weather conditions to lead to mass famines which, when taken together, led to between 30 to 60 million deaths from starvation in the Indian colonies. Community grain banks were forcibly disabled, land was converted from food crops for local consumption to cotton, opium, tea, and grain for export, largely for animal feed.

"British replaced the wasteful warlord aristocracy by a bureaucratic-military establishment, carefully designed by

utilitarian technocrats, which was very efficient in maintaining law and order. [...] However, the pattern of consumption changed as the new upper class no longer kept harems and palaces, nor did they wear fine muslins and damascened swords. This caused some painful readjustments in the traditional handicraft sector. It seems likely that there was some increase in productive investment which must have been near zero in Moghul India: government itself carried out productive investment in railways and irrigation and as a result there was a growth in both agricultural and industrial output."

India's economic policies India compared with other Asian countries In 1947, the average annual income in India was $439, compared with $619 for China, $770 for South Korea, and $936 for Taiwan. By 1999, the numbers were $1,818; $3,259; $13,317; and $15,720. (numbers are in 1990 international Maddison dollars) In other words, the average income in India was not much different from South Korea in 1947, but South Korea became a developed country by 2000s. At the same time, India was left as one of the world's poorer countries.

Hindu rate growth Hindu rate of growth is an expression used to refer to the low annual growth rate of the economy of India, which stagnated around 3.5% from 1950s to 1980s, while per capita income averaged 1.3%. At the same time, Pakistan grew by 5%, Indonesia by 6%, Thailand by 7%, Taiwan by 8%, and South Korea by 9% and .The term was coined by Indian economist Raj Kumar Krishna

License Raj

License Raj refers to the elaborate licenses, regulations and the accompanying red tape that were required to set up and run business in India between 1947 and 1990. The License Raj was a result of India's decision to have a planned economy, where all aspects of the economy are controlled by the state and licenses were given to a select few. Corruption flourished under this system. The labyrinthine bureaucracy often led to absurd restrictions - up to 80 agencies had to be satisfied before a firm could be granted a license to produce and the state would decide what was produced, how much, at what price and what sources of capital were used


27

Other Reasons Causes of Poverty in India Continued ……. Over-reliance on agriculture There is a surplus of labour in agriculture. Farmers are a large vote bank and use their votes to resist reallocation of land for higher-income industrial projects. While services and industry have grown at double digit figures, agriculture growth rate has dropped from 4.8% to 2%. About 60% of the population depends on agriculture whereas the contribution of agriculture to the GDP is about 18%.

High population growth rate High population growth rate, although demographers generally agree that this is a symptom rather than cause of poverty. Despite this, India currently adds 40 million people to its middle class every year. It is estimated that 300 million Indians now belong to the middle class; one-third of them have emerged from poverty in the last ten years. At the current rate of growth, a majority of Indians will be middle-class by 2025. Literacy rates have risen from 52 percent to 65 percent in the same period.

Neo-liberal policies and their effects Human cost of the "inequality & liberalization‖ in rural areas Other points of view hold that the economic reforms initiated in the early 1990s are responsible for the

collapse of rural economies and the agrarian crisis currently underway. As P Sainath describes in his reports on the rural economy in India, the level of inequality has risen to extraordinary levels, when at the same time, hunger in India has reached its highest level in decades. He also points out that rural economies across India have collapsed, or on the verge of collapse due to the neo-liberal policies of the government of India since the 1990s. The human cost of the "liberalization" has been very high. The huge wave of farm suicides in Indian rural population from 1997 to 2007 totaled close to 200,000, according to official statistics. Commentators have faulted the policies pursued by the government which, according to Sainath, resulted in a very high portion of rural households getting into the debt cycle, resulting in a very high number of farm suicides. The average poor family in 2007 has about 100 kg less food per year than it did in 1997.

Switching from food to cash crops Government policies encouraging farmers to switch to cash crops, in place of traditional food crops, has resulted in an extraordinary increase in farm input costs, while market forces determined the price of the cash crop. Farm suicides have occurred with the failure of cash crops, because with food crops such as rice,

even if the price falls, there is food left to survive on.

It is pointed out that there has been a wealth increase of close to $1 Trillion in the time frame of 2003-2007 in the Indian stock market, while only 4-7% of the Indian population holds any equity. During the time when Public investment in agriculture shrank to 2% of the GDP, the nation suffered the worst agrarian crisis in decades, the same time as India became the nation of second highest number of dollar billionaires.

Public investment in agriculture shrank

Farm incomes have collapsed. Hunger has grown very fast. Public investment in agriculture shrank to nothing a long time ago. Employment has collapsed. Non-farm employment has stagnated. (Only the National Rural Employment Guarantee Act has brought some limited relief in recent times.) Peasant households in debt doubled in the first decade of the neoliberal “economic reforms,” from 26 per cent of farm households to 48.6 per cent. Millions move towards towns and cities where, too, there are few jobs to be found. Life was being made more and more impossible for small farmers.

As of 2006, the government spends less than 0.2% of GDP on agriculture and less than 3% of GDP on

education. However, some government schemes such as the mid-day meal scheme and the NREGA have

been partially successful in providing a lifeline for the rural economy and curbing the further rise of poverty.

.


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Traditional picture of the distribution of wealth in the world

Perceptions of Poverty “Poverty often deprives a man of all spirit and virtue; it is hard for an empty bag to stand

upright”- Benjamin Franklin “Loneliness and the feeling of being unwanted is the most terrible poverty.” - Mother Teresa. “Poverty is the worst form of violence.”- Mahatma Gandhi “The mother of revolution and crime is poverty”- Aristotle “It is a tragic mix-up when the United States spends $500,000 for every enemy soldier killed, and

only $53 annually on the victims of poverty.”- Martin Luther King “Every gun that is made, every warship launched, every rocket fired signifies, in the final sense, a

theft from those who hunger and are not fed, those who are cold and are not clothed.” Dwight D. Eisenhower

“Poverty is lack of freedom, enslaved by crushing daily burden, by depression and fear of what the future will bring." - A Georgian

"If you want to do something and have no power to do it, it is talauchi (poverty).” A Nigerian "Lack of work worries me. My children were hungry and I told them the rice is cooking, until they

fell asleep from hunger.” - An Egyptian. "When one is poor, she has no say in public, she feels inferior. She has no food, so there is

famine in her house; no clothing, and no progress in her family." - A Ugandan "For a poor person everything is terrible - illness, humiliation, shame. We are cripples; we are

afraid of everything; we depend on everyone. No one needs us. We are like garbage that everyone wants to get rid of.” - A Moldovian

Perceptions of Poverty & Traditional picture of the distribution of wealth in the world


29

There are Many different types of poverty: A. Absolute - one‟s consumption or income level is inadequate to meet the basic necessities of life

depends on quantitative calculations that derive a poverty line (minimum std.) objective, scientific Absolute poverty – this refers to people who do not even have basic necessities: which include

Food, Clean water, Clothing, Shelter, Basic health care B. Relative poverty – this refers to people who are not as well off as others around them, but

might still be quite wealthy C. Cyclical Poverty: refers to poverty that may be widespread throughout a population, but the

occurrence itself is of limited duration. In non-industrial societies (past or present), this sort of inability to provide for one‟s basic needs rest mainly upon temporary food shortages caused by natural phenomena or poor agricultural planning.

D. Collective Poverty: In contrast of the cyclical poverty which is temporary, widespread or “collective” poverty involves a relatively permanent insufficiency of means to secure basic needs. Low life expectancy, high levels of infant mortality and poor health characterize life in this societies.It is usually related to economic under development. Examples: Africa, Asia, South and Central America Proposed remedy: Expansion of the GNP through improved agriculture and industrialization or both Population limitation. Improve population control programs

E. Concentrated Collective Poverty: Parts of an industrialized country suffer from poverty because most of the developments took place in selected area particularly in urban places.

Their chief economic traits are unemployment and underemployment, unskilled occupations and job instability.

The government must have programs that will develop regions or rural areas in terms of agriculture and raising the level of skills of employable members of these areas.

F. Case Poverty: It refers to the inability of an individual or family to secure basic needs even social surroundings of general prosperity. This inability is generally related to the lack of some basic attributes that would permit the individual to maintain himself.

The helpless aged, the blind, the physically handicapped, the chronically ill, etc. Solution: education, sheltered employment and economic maintenance G. Generational poverty is defined as having been in poverty for at least two generations;

however the characteristics begin to surface much sooner than two generations if the family lives with others who are from generational poverty.

H. Situational poverty is defined as a lack of resources due to a particular event (I.e., a death, chronic illness, divorce, etc.).

I. Urban poverty occurs in areas classified as urban. The urban poor deal with a complex aggregate of chronic and acute stressors (including crowding, violence, and noise) and are dependent on often-inadequate large-city services.

J. Rural poverty occurs in areas classified as rural. In rural areas, there are more single-guardian households, and families often have less access to services, support for disabilities, and quality education opportunities. Programs to encourage transition from welfare to work are problematic in remote rural areas, where employment opportunities are few

Types of Poverty


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The Effects of Poverty Poverty involves a complex array of risk factors that adversely affect the population in a

multitude of ways. The four primary risk factors afflicting families living in poverty are

Emotional and social challenges.

Acute and chronic stressors.

Cognitive lags.

Health and safety issues.

Various studies reported that 35 percent of poor families experienced six or more risk factors

(such as divorce, sickness, or eviction); only 2 percent experienced no risk factors. In contrast,

only 5 percent of well-off families experienced six or more risk factors, and 19 percent

experienced none.

The aggregate of risk factors makes everyday living a struggle; they are multifaceted and

interwoven, building on and playing off one another with a devastatingly synergistic effect. In

other words, one problem created by poverty begets another, which in turn contributes to

another, leading to a seemingly endless cascade of deleterious consequences called “Poverty

Cycle”.

What is the Cycle of Poverty? The cycle of poverty has been described as a phenomenon where poor families become trapped

in poverty for generations. Because they have no or limited access to critical resources, such as

education and financial services, subsequent generations are also impoverished.


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Due to the many root causes of poverty and the complexity with how poverty is measured and

defined there are

multiple cycles of

poverty—based on,

among other things,

economic, social,

spiritual and

geographical factors.

Many cycles overlap or

perpetuate new cycles

and therefore any

attempt to depict the

cycle of poverty will be

far more simplistic

than realistic.

The figure above shows—in very simplistic terms—how a cycle of poverty related to hunger

keeps a person or household poor in one of the world's developing countries.

The following figures show examples of how to break this cycle of poverty

Access to Medicine Many common infection can be

treated with the right medicine – as long as

they are available. This can save lives, keep people working

& strengthen the economy

Micro Credit Loans Increasing household

income with small loan that can be

invested in business such as agriculture & farming. This leads

to greater access to basic needs & food

Training in agriculture

Working with farmers

to help them improve their agriculture

techniques, create greater crop yields &

protect the

environment


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Diagram: Vicious & Virtuous cycle –Effects of Poverty

Effects of Poverty

Poverty

Vulnerability Isolation

Powerlessness

Physical

Weakness


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Box: Cycle of Poverty among Share Croppers & Poverty among child labourers


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Diagram: The tragic cycle of interaction among poverty, malnutrition & disease

The tragic cycle of interaction among poverty, malnutrition & disease

Documents

Understanding Poverty Part I