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Poverty as a Challenge | Class 9 Economics

The chapter highlights the challenges of poverty through case studies and the perspective through which poverty is viewed in the social sciences. Additionally, we will examine poverty patterns in India and the rest of the world and attempt to comprehend the concept of the poverty line. Additionally, we will study about the causes of poverty and the government's anti-poverty policies. The chapter concludes by expanding the official definition of poverty to include human poverty.


What is Poverty?

Poverty can be described as not having enough material possessions or income for a person's needs. Poor people could be landless labourers, people living in the jhuggis or labours at Dhabas.

India has the largest single concentration of the poor in the world which illustrates the seriousness of the challenge. (27crore poor people)

Two Cases of Poverty

Urban Case

  • Ram saran is a 33 year old daily wage labourer at a wheat flour mill in Ranchi. He manage to earn around 1500/month which is not sufficient to feed a family of 6 members.

  • Ram Saran lives in a one room rented house in a crowded Basti, his wife also works as a part-time maid and also earns 800/month.

  • They manage a meagre meal of dal and rice twice a day, but there’s never enough for all of them. His elder son works at a teas shop as a helper and earns another 300/month.

  • They have only two pairs of clothes each. New ones are bought only when the old clothes become un-wearable. Shoes are a luxury.

  • The younger kids are undernourished also they have no access to healthcare when they fall ill.

Rural Case

  • Lakha Singh belongs to a small village near Meerut, UP. His family doesn’t own any land, so they do odd jobs for the big farmers. They Earn Rs 50/day for hard days.

  • Often it’s in kind like a few kilograms of wheat or dal or even vegetables for toiling in the farm through the day. The family of eight cannot always manage two square meals a day.

  • Lakha lives in a kutcha hut with his family on the outskirts of the village. The women of the family spend the day chopping fodder and collecting firewood in the fields.

  • His father was a TB patient who passed away due to lack of medication. Lakha started earning at the age of 10. Oil and soap are a luxury for the family.

What are the various dimensions of Poverty according to these cases?

These cases illustrate various dimensions of poverty:

● Poverty means hunger and lack of shelter.

● Lack of Education and Proper health care.

● Lack of clean water and sanitation facilities.

● Lack of Regular jobs at a decent level.

It means living with a sense of helplessness. Poor people are in a situation in which they are ill-treated at almost every place, in farms, factories, government offices, hospitals, railway stations. Mahatma Gandhi insisted that India would be truly independent only when the poorest of its people become free of human suffering.

Poverty according to Social Scientists

Social scientists look at poverty through various lenses, usually through the level of income and consumption.

It also has some social indicators like illiteracy level, lack of general resistance due to malnutrition, lack of access to healthcare, lack of job opportunities, lack of access to safe drinking water, sanitation

Analysis of poverty based on social exclusion and vulnerability

Social Exclusion

Poor have to live only in a poor surrounding with other poor people, excluded from enjoying social equality of better-off people in better surroundings.

It is a process through which individuals or groups are excluded from facilities, benefits and opportunities that others enjoy.

The working of the caste system in India is a good example in which people belonging to certain castes are excluded from equal opportunities.


Vulnerability is determined by the options available to different communities for finding an alternative living in terms of assets, education, health and job opportunities.

It is analysed on the basis of the greater risks these groups face at the time of natural disasters (earthquakes, tsunami), terrorism etc.

Additional analysis is made of their social and economic ability to handle these risks.

Vulnerable Groups

The proportion of people below the poverty line is also not the same for all social groups and economic categories in India.

Most vulnerable to poverty are Scheduled Caste and Scheduled Tribe households.

Among the economic groups, the most vulnerable groups are the rural agricultural labour households and the urban casual labour households.

Inequalities of incomes within the family are also seen.

Poverty Line

A Common method used to measure poverty is based on the income and consumption levels. Poverty line is the amount of money needed for a person to meet his basic needs. It may vary with time and place.

How is the poverty line determined in India?

A minimum level of food requirement, clothing, footwear, fuel and light, educational and medical requirement, etc., are determined for subsistence.

  • These physical quantities are multiplied by their prices in rupees.

  • Food requirement is desired by the Calorie requirement per day by an individual.

  • The calorie needs vary depending on age, sex and the type of work that a person does.

  • The average calorie requirement in India is 2400 calories per person per day in rural areas and 2100 calories per person per day in urban areas.

  • The monetary expenditure per capita needed for buying these calorie requirements in terms of food grains, etc., is revised periodically considering the rise in prices.

The current poverty line in India is Rs 980 in urban areas and Rs 1190 in rural areas.

The poverty line is estimated periodically by conducting sample surveys. These surveys are carried out by the National Sample Survey Organisation (NSSO). World Bank use a uniform standard for the poverty line: minimum availability of the equivalent of $1.90 per person per day

Poverty Estimates

There is a substantial decline in poverty ratios in India from about 45 per cent in 1993-94 to 37.2 per cent in 2004-05. Further it came down to 22 per cent in 2011-12.

The percentage of people living under poverty declined in the earlier two decades.

What are Inter-State Disparities?

The proportion of poor people is not the same in every state. The all India Head Count Ratio (HCR) was 21.9 percent in 2011-12 states like Madhya Pradesh, Assam, Uttar Pradesh, Bihar and Orissa had above all India poverty level.

Bihar and Orissa continue to be the two poorest states with poverty ratios of 33.7 and 32.6 percent respectively. Decline in poverty in Kerala, Maharashtra, Andhra Pradesh, Tamil Nadu, Gujarat and West Bengal. States like Punjab and Haryana have traditionally succeeded in reducing poverty with the help of high agricultural growth rates.

Global Poverty Scenario

There has been a substantial reduction in global poverty. Poverty declined substantially in China and Southeast Asian countries as a result of rapid economic growth and massive investments in human resource development.

Number of poors in China has come down from 88.3 per cent in 1981 to 14.7 per cent in 2008 to 1.9 per cent in 2013. In the countries of South Asia. The proportion of people living under poverty in different countries as defined by the international poverty line (means population below $1.90 a day).

What are the causes of poverty?

● The policies of the colonial government ruined traditional handicrafts and discouraged development of industries like textiles. This resulted in less job opportunities.

● The failure at both the fronts: promotion of economic growth and population control perpetuated the cycle of poverty.

● Many job opportunities were created in the agriculture sector because of the agrarian sector but it was limited to some parts of India.

● Industries in the public and private sector did provide jobs but was not sufficient.

● Unequal distribution of land and other resources is also the major reason, land reforms which aimed at redistribution of assets in rural areas have not been implemented properly.

● The high level of indebtedness is both the cause and effect of poverty.

Anti- poverty Measures

The current anti-poverty strategy of the government is based broadly on two planks:

● Promotion of economic growth

● Targeted anti-poverty programmes.

India’s economic growth has been one of the fastest in the world. The growth rate jumped from the average of about 3.5 per cent a year in the 1970s to about 6 per cent during the 1980s and 1990s. The higher growth rates have helped significantly in the reduction of poverty. Economic growth widens opportunities and provides the resources needed to invest in human development.

Government Schemes to Cure Poverty

There are so many schemes which are formulated to affect poverty directly or indirectly:

1. Mahatma Gandhi National Rural Employment Guarantee Act, 2005: Aims to provide 100 days of wage employment to every household to ensure livelihood security in rural areas. Also aimed for sustainable development.

2. Prime Minister Rozgar Yozana (PMRY) 1993: The aim of the programme is to create self-employment opportunities for educated unemployed youth in rural areas and small towns.

3. Rural Employment Generation Programme (REGP) 1995: The aim of the programme is to create self employment opportunities in rural areas and small towns. A target for creating 25 lakh new jobs has been set for the programme under the Tenth Five Year plan.

4. Swarnajayanti Gram Swarozgar Yojana (SGSY) 1999: The programme aims at bringing the assisted poor families above the poverty line by organising them into self help groups through a mix of bank credit and government subsidy.

5. Pradhan Mantri Gramodaya Yojana (PMGY) 2000: In this additional central assistance is given to states for basic services such as primary health, primary education, rural shelter, rural drinking water and rural electrification.

Poverty as a challenge

● Poverty reduction remains India’s most compelling challenge. Wide disparities in poverty are visible between rural and urban areas.

● Poverty reduction is expected to make better progress due to higher economic growth, universal free elementary education, declining population growth, increasing empowerment of women and the economically weaker sections of society.

● “Minimum” subsistence level of living rather than a “reasonable” level of living.

● Providing health care, education and job security for all, and achieving gender equality and dignity for the poor are the major challenges.


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