Poverty : The greatest challenge faced by the Indian Economy, Class XII (C.B.S.E).

Applied Mathematics For Commerce
Students
Sets
Theory
Class XI
CBSE
Current Challenges facing Indian
Economy: Poverty
Class XII
As per CBSE Curriculum

Synopsis
1. Meaning of poverty
2. Who are Poor?
3. Measures of Poverty;Absolute and relative poverty
4. Poverty Line
5. Categorizing poor
6. Causes of poverty
7. Measures to remove poverty
8. Growth Oriented Approach
9. Specific alleviation Program
10. Meeting the minimum needs program
11. Shortcomings of PAPs.
Image by: Pinterest.com

Meaning of Poverty
• Poverty is the inability to fulfil the
minimum requirements of life.
• Poverty refers to a state in which an
individual is unable to fulfil even the
basic necessities of life, that include
food, clothing, housing, education
and health facilities.

Who are Poor?
• Anyone who cannot fulfil the basic requirements of life
are called poor. Poverty in India is divided on the basis
of area:
1. Urban Poor: Includes poor people like push cart
vendors, street cobblers, venders. This poverty is
observed in urban areas.
2. Rural Poor: Includes landless agricultural labourers.
They lack basic literacy and skills. This poverty is
observed in rural areas.

Measures of Poverty
Flemish
Region
• There are two measures to determine the extent of poverty:
1. Absolute Poverty
2. Relative Poverty

Absolute Poverty
Flemish
Region
• It refers to a situation when a person is
unable to meet the minimum consumption
level, that is, the total numbers of people
living BPL (Below Poverty Line).
• Poverty line refers to that line which
expresses per capita average monthly
expenditure incurred by the people to satisfy
their minimum needs.
• In India, nearly 20 % of the country’s
population is absolutely poor.

Relative Poverty
Flemish
Region
• It is the condition in which people lack the
minimum amount of income to maintain
the average standard of living in the society
they live.
• Example; when a household receives less
then 50% income then average income.
• It is a comparative measure of poverty. It
shows the terms of inequality of income
within the country. Image by Quora.com

Poverty Line
Flemish
Region
• Poverty line suggest the basic recommended
nutritional requirement area wise.
• The minimum calorie intake of 2400 calories
per person per day in rural areas.
• The minimum calorie intake of 2100 calories
per person per day in urban areas.

Categorizing Poverty
Flemish
Region
• Poverty can be categorized as
1. Chronic Poor: People who are always or
who are usually poor. Example, casual
workers.
2. Transient Poor: People who are churning
poor and who regularly move in and out
of the poverty. Example, small farmers,
seasonal workers.
3. Non-Poor: People who are never poor.

Causes of Poverty
Flemish
Region
1. High population growth rate which leads to
fall in per capita availability of goods and
services.
2. The existence of unemployment and
underemployment in the economy.
3. Poor agricultural infrastructure in terms of
lack of proper irrigation.
4. The economic reforms also caused poverty as
it increases income inequalities between rich
& poor.
5. Lack of adequate vocational training, that is,
lack of skilled labor.
Image by: bbamantra.com

Measures to Remove Poverty
Flemish
Region
• Measures to remove poverty
includes:
1. Growth Oriented Approach.
2. Specific Poverty Alleviation
Programs.
3. Meeting the minimum needs of the
poor.

Measures to Remove Poverty- Growth OrientedApproach
Flemish
Region
1. This approach is based on trickle-down effect, that the
effect of economic growth would spread to all sections of
the society.
2. The rapid industrial development and transformation of
agriculture through green revolution would benefit the
underdeveloped and the backward sections of the
community.
• But this approach was not successful because of high
population growth, widening inequality among rich and
poor section and due to inefficient administrative set up.

Measures to Remove Poverty- Specific Poverty Alleviation Program
Flemish
Region
• This approach focussed on increasing self employment and
wage employment programs to remove poverty from the
country. The following are the self-employment and wage-
employment programs discussed below:
1. Rural Employment Guarantee Program (REGP):
This program started on 1st April, 1995 and it aimed at
creating self-employment opportunities in rural areas.
It was started by Khadi & Village Industries Commission.
Financial help in the form of bank loans was given to set up
small industries that generate employment.

Flemish
Region
2. Prime Minister Rozgar Yojana (PMRY) :
This program started on 15th August, 1993 for
educated youth.
Its focus was on self-employment.
It aimed at providing financial help for
agriculture & related activities and helped
them to set up enterprises that generate
employment.

Flemish
Region
3. Swarna Jayanti Shahari Rozgar Yojana (SJSRY)
:
This program started on 1st December, 1997
and it aimed at creating employment
opportunities for both self-employment and
and wage-employment in urban areas.
The cost of the program is shared between
the centre & the state in the ratio of 75:25.

Flemish
Region
4. Swarna Jayanti Gram Swarozgar Yojana
(SJGSY) :
This program started in April, 1999. It is a
self-employment program.
It aims at encouraging micro enterprises
and to bring the assisted poor families
above the poverty line, through Self-help
groups (SHGs).
This program encourages people to form
SHGs and create self saving habits. Later
they can avail loans from bank.

Flemish
Region
5. Sampoorna Grameen Rozgar Yojana (SGRY) :
This program started in September,2001. It is a
wage-employment program.
It aims at providing wage employment to poor
unskilled workers in rural areas.
This program encourages labor intensive work
among rural people who give manual &
unskilled services.

Flemish
Region
6. National Rural Employment Guarantee
Act, 2005 (NREGA) :
This program aims to provide guaranteed wage
wage employment to every household.
Under this, 1 adult from each household is
provided job for a minimum of 100 days in a
year.
If the government fails to provide job, then the
the compensation is paid to the household.

Measures to Remove Poverty- Meeting the minimum needs of the poor
Flemish
Region
• This is the third approach to solve the poverty problem by providing the basic
amenities to the people.
• India was the first in the world to start the provision of the basic needs
through its public expenditure on social consumption needs like provision of
food grains at subsidised rates, education, health, water supply and
sanitation.
• The Indian government also assisted elderly people who do not have anyone
to take care of them through pensions by National Social Assistance program.

Shortcomings of Poverty Alleviation Programs (PAPs)
Flemish
Region
• The following are the major concerns that prevented successful
implementation of PAPs :
1. Unequal distribution of land and other assets due to which non-poor people
took the advantage of the programs.
2. Insufficient resource allocation as compared to the size of the poverty.
3. Ill-motivated, inadequately trained government officials acted as the
hindrance to provide aid to the poor people because of their corrupted
behaviour.

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Poverty : The greatest challenge faced by the Indian Economy, Class XII (C.B.S.E).

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