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Class 11 Economics Chapter 4 Poverty Notes

Please carefully read the Poverty Notes for Class 11 Economics provided below. Use them prior to your exams as this will help you to revise the entire chapter easily. We have also provided MCQ Questions for Class 11 Economics which will be asked in the upcoming exams.

Poverty refers to a situation in which an individual is unable to fulfill the basic necessities of life.
In other words, it is the ability of a individual to fulfill the minimum requirement of life like food, clothing, shelter, education and health facilities etc.

Measures of poverty (types of poverty)

Poverty is of 2 types:-

1. Relative poverty

It refers to the poverty of people in comparison to other people, regions or nations. Example- Ramesh has lower income in comparison of Mukesh Ambani; therefore we can say that Ramesh is relative poor than Mr. Mukesh Ambani.

2. Absolute poverty

It refers to the total number of people living below poverty line.

In other words, Absolute poverty refers to a situation when the level of income of an individual is too low that they cannot even meet their minimum consumption requirements to maintain their health and work efficiently. 

Poverty line

It refers to a line which divides the population into 2 parts i.e., poor and non-poor In other words, Poverty line is a cut-off point on the line of distributio, which usually divides the population of a country as poor and non-poor.
Poverty line measures the number of people who are regarded as poor.

Determination of poverty line

In India, the poverty line is determined as follows:-

1. Minimum caloried consumption

The planning commission of India has defined poverty line on the basis of nutritional requirements.
i.e., people who are not getting 2400 calories per person per day in rural areas and 2010 calories in urban areas is considered to be living under poverty line.

2. Minimum consumption expenditure criteria

Another criterion for determining the poverty line is the Minimum consumption expenditure criteria. According to this, if a person won’t be able to made the monthly expenditure of 816 rupees (around 32 rupees per day) in rural areas and 1407 rupees (around 47 rupees per day) in urban areas comes under poverty line.

Categorizing poverty

There are many ways to categorize poverty
♦ Chronic Poor
It includes such people who are always poor and those who are usually poor 
♦ Transient Poor
It includes people who regularly moves in and out of poverty line (like small farmers) and those who are occasionally poor (seasonal workers)
♦ Non Poor
It includes people who are never comes under poverty line.

According to World Bank, if you’re living on $1.90 a day or less, you’re living in extreme poverty.

Causes of Poverty

 ♦ Rapid increase in population

The population of our country is increasing at alarming rate. This increase in population reduces the availability of natural resoures per head and also decreases the per capita income which ultimately leads to unemployment and poverty.

 ♦ Low level of national output

In comparison with the population growth the net national product of the economy falls short. The rate of increase in productivity is miserably low than the rate of increase in population. It automatically leads to increase in poverty and reduction in standard of living.

♦ Inflation

One of the most important causes of poverty is the rise in general price level. Sharp rise in price and negligible change in level of income has decreased the purchasing power of low income group and results in lower standard of living.

 ♦ High level of migration from rural areas

The crowd of rural areas migrated towards the urban area in search of employment but the existing industries and limited job opportunity won’t be able to absorb all of these people and hence this migration leads to unemployment and poverty.

♦  Unemployment

An increasing rate of unemployment is another major cause of poverty in the economy. The amount of job seekers are increasing at much higher rate than that of employment opportunity.

♦ Rural indebtedness

Condition of unemployment and lack of available resources complies the people of rural areas to borrow money from unorganized sector at higher rate of interest, this rural indebtedness is one of the most significant factors of poverty in rural areas.

♦ High iliteracy rate

An iliterate person won’t be able to participate in the emerging employment opportunities in different sectors of the urban and rural areas, as they do not have the necessary knowledge and skill to do so. This iliteracy is one of the main cause of poverty in the economy.

Effects of poverty

♦ Child labour
♦ Lack of nutrition and diet
♦ Poor standard of living
♦ Iliteracy
♦ Unemployment 
♦ Lack of hygiene

Approaches by the government of India to remove poverty

♦ Growth oriented approach

This approach is based on the expectation that the rapid increase in Gross domestic product and per capita income (economic growth) would spread the benefits to all the sections of society and will automatically reduces the amount of poverty from the economy.

♦ Minimum needs programme

It was introduced in fifth five year plan (1974-78), to provide certain basic minimum needs and improve the living standards of people. It aims at social and economic development of the underserved population.
It includes nutrition (via mid day meal scheme), rural water supply, rural electrification, Elementary education and so on.

♦ Poverty alleviation programme

The government of India has introduced variety of programs in order to remove poverty and to enhance the growth and development of the economy.
For example- Prime Minister Rozgar Yojana (PMRY), Mahatma Gandhi National rural employment guarantee Act (MGNREGA) etc.

Poverty Alleviation programmes in India

1. Mahatma Gandhi National rural employment guarantee Act (MGNREGA)

♦ The national rural employment guarantee Act (NREGA) was passed in 2005 and lateron it was remained as Mahatma Gandhi National rural employment guarantee Act (MGNREGA) in 2006 in 200 identified districts of the country.

♦ Under this act, all those who are willing to work at the minimum wage rate offered, will get employment for a period of minimum 100 days . In other words, it provides at least 100 days of guaranteed wage employment in a financial year to every household who volunteer to do the specified work.
♦ Those who seeks employment can report in those rural areas where this programme is being launched.
♦ It was extended throughout the country in 2008.

2. Food for work programme

♦ Popularly known as National food for work programme.

♦ It was launched in 2004.

♦ It aims at providing more opportunities of wage employment and ensuring certain minimum nutritional levels for the poor population of rural areas.

♦ The wages for work are paid partly in food grains and partly in cash.

♦ It was 100% centrally sponsored scheme.

♦ This programme was incorporated in Mahatma Gandhi National

Rural Employment Guarantee Act (MGNREGA) in 2005.

3. Swarna Jayanti Gram Swarozgar Yojana (SGSY)

♦ It was introduced in April 1999.

♦ Under this yojana, a large number of small enterprises were established in rural areas

♦ It aims at promoting micro enterprises and to bring the assisted poor families above the poverty line, by organizing them into Self Help Groups (SHGs).

♦ Self Help Groups are small groups of poor people. They help each other to solve their problems. SHGs promote small savings among their members. The savings are kept with the bank with the name of the self help groups. Later on this common fund is used to give small loans its members.
♦ The government also provides partial financial assistance to SHGs.

4. Pradhan Mantri Gram Sadak Yojana

♦ It was launched in December 2000.

♦ It aims at improving road connectivity to all the eligible unconnected habitations in the rural areas by the end of tenth five year plan (2002-2007).

♦ A total length of about 3,00,000 km of road work has been completed till November 2010.

5. Sompoorna Gramin Rozgar Yojana (SGRY)

♦ Launched on 1st September 2001.

♦ Its main objective is to

♦ Provide employment opportunities and food security

♦ Development of infrastructure

♦ Focus on development of regional, economic and social conditions.

♦ Employment assurance scheme and jawahar gram sammridhi yojana have been merged with SGRY since April 2002.

♦ SGRY was merged with National rural employment guarantee Scheme in 2006.

6. Swarn Jayanti Shahari Rozgar Yojana (SJSRY)

♦ It was launched in 1st December 1997.

♦ It aims at creating employment opportunities for both self employed and wage employ in urban areas.

♦ It encourages setting up of self employment ventures and or provision of wage employment.

♦ It was funded on the 75:25 basis between the centre and the states

♦ It consists of 2 special schemes

♦ 1-Urban self employment programmes (USEP)

♦ 2-Urban wage employment programmes (UWEP)

Other Programme launched by the government is as follows:-

♦ Swarn Jayanti gram swarozgar yojana (SGSY)

♦ Jawahar gram sammridhi yojana

♦ Jan dhan yojana

♦ National rural livelihood mission (NRLM)

♦ Prime Minister rozgar yojana

♦ Indra Awas Yojana

♦ Pradhan Mantri gramodaya yojana

Summary

♦ Relative poverty

♦ Absolute poverty

♦ Poverty line

♦ Determination of poverty line

♦ Minimum calories consumption

♦ Minimum consumption expenditure criteria

♦ Causes of poverty

♦ Rapid increase in population

♦ Low level of national output

♦ Inflation

♦ High level of migration from rural areas

♦ Unemployment

♦ Rural indebtedness

♦ High iliteracy rate

♦ Approaches by the government of India to remove poverty

♦ Growth oriented approach

♦ Minimum needs programme

♦ Poverty alleviation programme

♦ Poverty Alleviation programmes in India.