Poverty & Vicious Cycles of Poverty

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 Poverty

“Poverty is the worst form of violence.” – MKG.
  • Poverty can be defined as a situation where a section of society is unable to fulfil even the basic necessities of life.
  • The UN Human Rights Council has defined poverty as “A human condition characterized by the sustained or chronic deprivation of the resources, capabilities, choices, security and power necessary for the enjoyment of an adequate standard of living and other civil, cultural, economic, political and social rights”.
  • Multi-Dimensional Nature of Poverty
    • Basic Necessities of Life
      • food, clothes, shelter, livelihood, health, Education
    • Capability
    • Social Exclusion (Caste system problem)
    • Choice
    • Civil Liberties and Rights
Absolute Poverty
Fix the Poverty line.
Ex: Earning below 10,000/month is poor, earning above 10,000/month is not poor. India poverty line (9,800 in Rural & 12,000 in Urban). Absolute poverty just gives headcount ratio (Ex: Below poverty line one earn 8,000, another earns 5,000. There is also a difference in below poverty line, So called say absolute poverty give only headcount of below poverty line)
  • This concept is based on absolute needs of the people and people are defined as poor when some absolute needs are not sufficiently satisfied.
  • It is also defined in terms of insufficiency of basic needs.
  • It is a condition where household income is below a necessary level to maintain basic living standards (food, shelter, housing). This condition makes it possible to compare between different countries and also over time.
Relative Poverty
(Poverty Gap Ratio – Find severity of poverty
Ex: Take 1 Cr is below poverty line. Relative poverty measure gap between income. 3 lakh people earn 9000, 8 lakh people earn 8000, 4 lakh people earn 7000…...2.5 lakh people earn 3000…)
  • This concept is related to the general standard of living in a society.
  • Relative poverty – A condition where household income is a certain percentage below median incomes. For example, the threshold for relative poverty could be set at 50% of median incomes (or 60%).
  • Thus relative poverty relates to inequalities in a society. India is characterised by both in extreme measures, i.e., absolute and relative poverty.
Indicators
Poverty Headcount Ratio
  • The Poverty Head Count ratio measures the proportion of population whose per capita income/ consumption expenditure is below the official Poverty line or in simple terms is measures the total number of people living below the poverty line.
  • Head Count ration does not reflect the severity of poverty.
Poverty Gap Ratio
  • The Poverty Gap Ratio is the gap by which mean consumption of the poor below poverty line falls short of the poverty line.
  • It indicates the depth of poverty; the more the PGR, the worse is the condition of the poor. While the number of poor people indicates spread of poverty, PGR indicates the depth.
  • A higher poverty gap index means that poverty is more severe.
Primary and Secondary Poverty
Primary poverty
(Less income so poverty. Ex: only 5000 income)
  • It is defined as a situation where income is insufficient to meet basic needs – even if every penny is spent wisely.
Secondary poverty
  • (Sufficient income but misspent. Ex: 15,000 incomes, spent 10,000 on Alcohol, lottery, gambling etc...
  • It is defined as a situation where money is misspent on luxuries – leaving insufficient disposable income to buy necessities.

Schemes focus only on always poor, make schemes focus on all poor people & Special attention to Chronic poor.
Other Reason
  • Ritual is one of the most important reason for poverty in India.
  • Around 80% of India’s population is Hindu - many continue to follow ancient traditions that have evolved little since around 500 BC. Times of India declared that the Indian spiritual and religious market is worth around $30 billion – they remain one of the most cited authorities on this figure; though newer estimates put that figure closer to $40 billion.
Vicious Cycle of Poverty (Economy)
Vicious Cycle of Poverty (Health)
 
Vicious Cycle of Poverty (Individual)

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