Problem of poverty

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University Of Mumbai Alkesh Dinesh Mody Institute For Financial and Management Studies

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Problem Of Poverty In India

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Prepared By Janhavi Marde 60 Nitin Jaiswal 31 Priyanka Jethva 32 Amit Balsaraf 02 Nikhat Khan 50 Fahim Khan 46

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Acknowledgement Our Group has completed the project with the help of Professor Asgoankar. We have great pleasure and honour to present our SYBMS project on “Problem of Poverty in India”. We owe our deepest gratitude to our Professor who helped us whenever we needed.

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Contents What Is Poverty ? Two Ways Of Povert Measurement Of Poverty Poverty Head Count Index Types of poverty What Is Poverty Line ? Causes Of Poverty Measures to Reduce Poverty Efforts to alleviate poverty Outlook for poverty alleviation Government Programmes For Poverty Alleviation

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What Is Poverty ? Poverty is about not having enough money to meet basic needs including food, clothing and shelter.  However, poverty is more, much more than just not having enough money. The world bank describes poverty as: “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.”

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Two Ways Of Poverty Relative Poverty Absolute Poverty

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1) Relative Poverty Relative Poverty refers to the Income or Asset Position of one Class or Group of People in comparison with the other Classes or Groups, or of one Individual vis‐a‐vis the Others. • The essential point here is that Poverty of One is Relative to the Richness of the other. • For Example, an Average Middle Class Person is Poor when compared to the Upper Middle Class Person, who in turn, may be poorer than the Richer Person and so on.

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Absolute Poverty It is associated with a Minimum Level of Living or Minimum Consumption Requirements of Food, Clothing, Housing, Health, etc. • All those People who fail to Secure Income or Assets to have access to even these Minimum Consumption Requirements are classified as ‘Poor’. • Is relevant for the Less‐Developed Countries.

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Measurement Of Poverty

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Poverty Head Count Index

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Types of poverty 1. Economic Poverty2. Bodily Poverty3. Mental Poverty4. Cultural Poverty5. Spiritual Poverty6. Political Poverty7. Societal Poverty

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What Is Poverty Line ? Poverty Line is drawn on the basis of Expenditure that is necessary to Secure the Minimum Acceptable Living Standard for Work & Efficiency. • Since, Food is the most Basic Requirement,thus, Poverty Line is drawn on the basis of a Minimum Necessary Nutritional Standard expressed in terms of Calories Per Day.

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In India, the Minimum Calories intake of a Person has been put at 2,400 in Rural Area & 2,100 in Urban Areas. • To convert this Calorie intake based Poverty Line into a Monetary Measure of Poverty, the Cost of Minimum Consumption Requirements of Food providing the minimum calories is calculated at prevailing Price. • Thus, Government defined a Person with an Income of Less than Rs.368 (Rural) & Rs.559 (Urban) per month as living below Poverty Line.

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Causes Of Poverty Caste System Heavy Pressure Of Population Unemployment Illiteracy India’s Economic Policy

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Caste System According to S. M. Michael, Dalits constitute the bulk of poor and unemployed. According to William A. Haviland, casteism is widespread in rural areas, and continues to segregate Dalits. Others, however, have noted 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.

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The population in India as at 0:00 hours on 1st March 2001 stood at 1,027,015,247 persons. With this, India became only the second country in the world after China to cross the one billion mark. ( India is the 2nd most populated country in the world). India's estimated population to be 1,129,866,154, in July 2007. Heavy Pressure Of Population

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India's population rose by 21.34 % between 1991 - 2001. The sex ratio (i.e., number of females per thousand males) of population was 933, rising from 927 as at the 1991 Census. Persons      1,027,015,247Males          531,277,078Females      495,738,169

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Current Population of India in 2010 is around 1,150,000,000 (1.15 billion) people. Currently, India is second largest country in the world after China in terms of population. By 2030, the population of India will be largest in the world estimated to be around 1.53 billion. There has been rapid increase in Indian population in the last 60 years. Population of India at the time of Independence was only 350 million. So Indian Population has increased more than three times. Current Population of India in 2010 - 1,150,000,000 (1.15 billion)Population of India in 1947 was - 350 million

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Unemployment Unemployment refers to the situation where the Persons who are able to Work & Willing to Work, Fail to Secure Work or Activity which gives them Income or Means of Livelihood. Those who are fit to Work but do not want to Work & hence do not actively seek Work are not included among the Unemployed Persons.

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Illiteracy There is a close connection between illiteracy and poverty at all levels--global, national, and subnational; the countries with the lowest levels of literacy are also the poorest economically. Poverty breeds illiteracy by forcing children to drop out of school to work, and these illiterate people are forced to stay on the lowest levels of the work force and thus remain in poverty. Thus illiteracy in turn reinforces poverty, and poverty is cyclical in families. Women and girls are especially vulnerable to the cycle.

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In order to break the cycle of illiteracy, a multipronged program against poverty must be carried out. In India and in some other developing countries, every 5-year program has a broad antipoverty component that includes a minimum needs program, an intensified and effective employment program, specific development programs, an assets redistribution program, an increase in the flow of real income, work toward a national income policy, and legislation promoting tenancy reform and surplus land distribution, minimum wages, and equal status for women. Literacy education has a specific role--to train illiterate adults in reading, writing, and arithmetic, to equip them with some income-generating skills, and to raise awareness of societal needs.

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India’s Economic Policy 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.

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India had started out in the 1950s with: High growth rates Openness to trade and investment A promotional state Social expenditure awareness Macro stability But ended the 1980s with: Low growth rates (Hindu rate of growth) Closure to trade and investment A license-obsessed, restrictive state (License Raj) Inability to sustain social expenditures Macro instability, indeed crisis.

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Measures to Reduce Poverty Agriculture & other Rural Vocations should be rapidly developed so as to Eradicate Rural Poverty. • Village and Small Industries should be developed to create greater Employment both in Rural & Urban Areas. • Programmes should be implemented that directly target the Poor & help them increase their Income & Consumption.

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Income Inequalities should be reduced: Labour Legislation should ensure better Wages. Goods consumed by the Poor should not be Taxed. Goods required by the Poor must be Subsidised. Free Health Care & Education should be provided to the Poor. Persons belonging to Poor Families must be provided Employment. Rapid Growth of Population must be controlled & Population Growth Rate brought down through Family Planning, Education, Incentives, etc.

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Efforts to alleviate poverty Since the early 1950s, govt has initiated, sustained, and refined various planning schemes to help the poor attain self sufficiency in food production. Probably the most important initiative has been the supply of basic commodities, particularly food at controlled prices, available throughout the country as poor spend about 80 percent of their income on food.

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Outlook for poverty alleviation Eradication of poverty in India is generally only considered to be a long-term goal. Poverty alleviation is expected to make better progress in the next 50 years than in the past, as a trickle-down effect of the growing middle class. Increasing stress on education, reservation of seats in government jobs and the increasing empowerment of women and the economically weaker sections of society, are also expected to contribute to the alleviation of poverty.

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It is incorrect to say that all poverty reduction programmes have failed. The growth of the middle class (which was virtually non-existent when India became a free nation in August 1947) indicates that economic prosperity has indeed been very impressive in India, but the distribution of wealth is not at all even.

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Government Programmes For Poverty Alleviation Pradhan Mantri Gramoday Yojana (PMGY) Indira Awas Yojana (IAY) Swaranjayanti Gram Swarozgar Yojana(SGSY) Employment Assurance Scheme (EAS) Jawahar Gram Sammridhi Yojana (JGSY) National Food For Work Programme Valmiki Ambedkar Awas Yojana (VAMBAY) The Swaran Jayanti Shahkari Rozgar Yojana (SJSRY)

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Government Programmes For Poverty Alleviation Pradhan Mantri Gramoday Yojana (PMGY) Launched in December, 2000 to provide Road Connectivity through good all weather roads to all the eligible unconnected habitations in the Rural Areas by the end of Tenth Plan. • Indira Awas Yojana (IAY) Major Scheme for construction of Houses to be given to the Poor, Free of Cost.

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Swaranjayanti Gram Swarozgar Yojana(SGSY) Launched in 2001. Aims at i. Providing Wage Employment in Rural Areas ii. Food Security iii. Creation of Durable Community, Social & Economic Assets. Employment Assurance Scheme (EAS) & Jawahar Gram Sammridhi Yojana (JGSY) were merged since April, 2002.

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National Food For Work Programme Launched in November, 2004 in 150 backward Districts of the Country with the objective of providing more Opportunities of Wage Employment & ensuring certain Minimum Nutritional Levels for Rural Poor. • Valmiki Ambedkar Awas Yojana (VAMBAY) Launched in 2001 to facilitate the construction and upgradation of Dwelling Units for the Slum Dwellers & Provides a Healthy & Enabling Urban Environment through Community Toilets.

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The Swaran Jayanti Shahkari Rozgar Yojana (SJSRY) Came into operation from December, 1997 submerging the three earlier Urban Poverty Alleviation Programmes viz., Nehru Rozgar Yojana (NRY), Urban Basic Services Programmes (UBSB) & Prime Minister Integrated Urban Poverty Eradication Programme(PMIUPEP). Seeks to provide Employment to the Urban Unemployed or Under Employed Poor by encouraging the setting up of Self‐employment Ventures or Provisions of Wage Employment.

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Thank You

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