Measuring Urban Poverty

Poverty in India is still rampant despite an impressive economic growth. An estimated

250 million people are below the poverty line and approximately 75 per cent of them are
in the rural areas. 1973-74, the urban population was 60 million. It increased to 64.6
million in 1977-78, 70.9m in 1983-84, 75.2m in 1987-88, 76.3m in 1993-94, and in 1999-
2000 it had risen to 77.2m. The growth rate of urban population is due to the large-scale
shifting of rural population to urban areas. This steep rate of growth of urban population
along with the urban bias in developing countries has brought in its wake problems like
population explosion in cities, slum formation and urban poverty. Urban poverty, which
has a serious impact on economic growth in India.

Tamilnadu is fourth most populated state in India. Tamil Nadu has performed well in
human development. With an index of 0.531, it ranked third in India, though considered
low as against western standards. This includes population, sex ratio, density of
population, per capita income, Below Poverty Line, Infant Mortality Rate, Literacy Rate,
and Women's Empowerment. The life expectancy at birth for males is 65.2 years and for
females it is 67.6 years. However, it has a number of challenges, significantly, the
poverty is high, especially in the rural areas. As of 2004-2005, the poverty line was set at
Rs. 351.86 / month for rural areas and Rs. 547.42 / month for urban areas. Poverty in the
state had dropped from 51.7% in 1983 to 21.1% in 2001. For the period 2004-2005, the
Trend in Incidence of Poverty in the state was 22.5% as against the national figure of
27.5%. Over one-half of these people live in slums or are homeless; they live in
tenements and huts, on pavements, along railway tracks, under bridges and in other
spaces available to them. The conditions of life under which the homeless and slum
dwellers of Chennai live are conditions of terrible poverty, squalor and deprivation.
Poverty is symptomatic of inadequate economic development.

Poverty in India is still rampant despite an impressive economic growth. An estimated

250 million people are below the poverty line and approximately 75 per cent of them are
in the rural areas

The estimation of poverty in India is based on two critical components. First, information
on the consumption expenditures and its distribution across households is provided by the
NSS consumption expenditure surveys. Second, these expenditures by households are
evaluated with reference to a given poverty line. Households with consumption
expenditures below the poverty line are deemed poor.

Poverty in India can be defined as a situation only when a section of peoples are unable
to satisfy the basic needs of life. The definition and methods of measuring poverty differs
from country to country. The Planning Commission estimates the proportion and number
of poor separately for rural and urban India at the national and State levels based on the
recommendations of the Task Force on ‘Projections of Minimum Needs and Effective
Consumption Demands’ (1979). The Task Force had defined the poverty line (BPL) as
the cost of an all India average consumption basket at which calorie norms were met. The
norms were 2400 calories per capita per day for rural areas and 2100 calories for urban
areas. These calorie norms have been expressed in monetary terms as Rs. 49.09 and Rs.
56.64 per capita per month for rural and urban areas respectively at 1973-74 prices. If the
person is unable to get that minimum level of calories is considered as being below
poverty line.

The poverty in India can be defined on the basis of rural poverty as well as urban
poverty.

Rural Poverty in India

India is a more rural based country highly dependent on agricultural sector. There is
higher concentration of poverty in the rural India as to the given statistics. Government's
plans and procedures have failed in many times. The important reasons for country's
poverty are as follows:

1) Alarming population Growth

2) Lack of Investment
3) Lower Literacy Rate
4) Regional inequalities
5) Failure of PDS system

Urban Poverty in India

India is stepping forward for becoming a country with more urbanized. The recent
experiences tell that the urban areas are facing the same problem of poverty as of the
rural areas. The reasons behind urban poverty are as follows:

1) Improper Training
2) Growing population
3) Slower job Growth
4) Failure of PDS System

Estimates of incidence of Poverty in India

Year Poverty Ratio (Per cent) Number Of Poor (Millions)

Rural Urban Combined Rural Urban Combined
1977-78 53.1 45.2 51.3 264.3 64.4 328.9
1983 45.7 40.8 44.5 252.0 70.9 322.9
1987-88 39.1 38.2 38.9 231.9 75.2 307.1
1993-94 37.3 32.4 36.0 244.0 76.3 320.3
1999-00 27.1 23.6 26.1 193.2 67.1 260.3
2007* 21.1 15.1 19.3 170.5 49.6 220.1
* Poverty projections for 2007
Source: Tenth Five Year Plan, Volume I, Planning Commission

The biggest cities are growing faster than smaller towns. India’s mega-cities have the
highest percentage of slum-dwellers in the country. This indicates that as big cities grow
even larger, their slums will swell. While slums have become an important place to reach
the urban poor, even though the urban poor do not all live in slums. The urban poor
population in India is estimated to be nearly 8 crores currently, while the slum population
is only 4 crores.

Establishing an appropriate poverty line to monitor changes in income poverty is also

difficult. A poverty line should be set which reflects the income needed to avoid
deprivation within each local context. For urban poverty, at the very least it should reflect
the income needed not only to purchase sufficient food but also to obtain a secure shelter
with adequate quality water, sanitation and garbage collection, to pay for transport and
for keeping children at school, and to afford health care and medicines when needed. The
‘non-food’ monetary costs of avoiding poverty are generally higher in urban areas than in
rural areas, as access to housing, resources and services are monetized – and usually
particularly expensive in larger or more prosperous cities. But very few nations have
income-based poverty lines that vary from place to place, reflecting differences in the
income needed to avoid poverty. Where there is provision for this, it usually focuses on
variations in the cost of food or variations in what the poorest 20 per cent of households
spend on non-food items, which is not the same as the income level they need to avoid
deprivation.

The multi-dimensional nature of poverty

Urban poverty is usually characterised by:

1. Inadequate household income (resulting in inadequate consumption of basic

necessities), sometimes exacerbated by an uneven distribution of consumption
within households, between men and women and between adult men and children.
2. Limited asset base for individuals, households or communities (including both
material assets such as housing and capital goods, and non-material assets such as
social and family networks and ‘safety nets’).
3. Inadequate provision of ‘public’ infrastructure and services (piped water,
sanitation, drainage, health care, schools, emergency services, etc.)
4. Inadequate protection by the law – for instance, regarding civil and political
rights, health and safety in the workplace, environmental legislation and
protection from violence.
5. ‘Voicelessness’ and powerlessness within the political system – no possibility or
right to receive entitlements, make demands within political systems or get a fair
response.
6. Exploitation and discrimination (often on the basis of gender, caste, age,
ethnicity, etc.)
Urban poverty and problems

Urban poverty was easily discernible through lack of security of land tenure, access to
affordable shelter and basic amenities, particularly, health, education and social
security.Urban poverty was linked to the aspects of social inclusion, city-wide
infrastructure and basic service delivery systems, opportunities for skill development and
employment, responsiveness of local governance structures and policies and programmes
impacting on urban environment, development and management.

The bulk of the urban poor are living in extremely deprived conditions with insufficient
physical amenities like low-cost water supply, sanitation, sewerage, drainage, community
centres and social services relating to health care, nutrition, pre-school and non-formal
education

“Workers engaged in the urban informal sector form the bulk of the urban poor. Workers
in this sector get low wages or if they are self-employed, their income is meagre. This
implies that their living conditions are low and, if employed, their wages are less than the
stipulated minimum wages. There are hardly any regulations on their working conditions
and social security is virtually non-existent. A large section of this population consists of
low-skilled rural migrants or migrants from smaller towns. Hence, for these people, right
from the time of their entry to the city they become a part of the informal sector as they
have neither the skills nor the opportunities to enter better-paid and more secure formal
sector jobs. They thus move from one level of poverty, at their place of origin, to another
level of poverty, at their destination. At the same time there is a growing section of
workers in the formal sector who have lost their jobs and are compelled to work in the
informal sector. For these people and their families this change means a reduction in their
standard of living and insecure, unregulated employment.”

People in urban areas are homeless and slum households are deprived of good housing,
they do not have access to clean water, they do not have access to hygienic systems of
waste disposal (including the sanitary disposal of faeces) and, in general, they live in
polluted and degraded environments not suited to human habitation.

Global Poverty and India

Global poverty estimates report the number of people living on less than $1 or $2 a day.
But purchasing power (dis)parities suggest that it could be more accurate to say that the
poor in countries like India are living on less than $0.20 or $0.40 a day

The World Bank -- which has to be applauded for having made the first such attempt –
started making international comparisons of poverty only about two decades ago. For
obvious reasons of convenience it developed two simple notions of poverty. The US
Treasury being the power behind the institution, and the dollar being the reserve currency
by design, the lower poverty line was set at $1 a day per capita. Those below it were
considered “the poorest of the poor”. The upper poverty line was set at $2 a day. Those
living on $1-2 a day were still poor, but not as badly off. The updated numbers today,
corrected for inflation, are $1.08 and $2.15.

In many nations, governments set income-based poverty lines too low. These are usually
based on the cost of a ‘minimum food basket’, with some small additional amount added
in recognition that there are non-food essentials that have to be paid for, such as the cost
of housing, water, transport, health care and keeping children at school. But the size of
this small additional amount is usually unrealistically low in relation to the cost of non-
food essentials, especially for people living in areas where the costs of these are
particularly high. The income needed to avoid poverty is usually particularly high in the
larger and/or more prosperous cities.

Relying on income-based poverty lines (which assume that the income needed to avoid
poverty is the same in all locations) to identify who is poor leads to large underestimates
in the scale of urban poverty. One of the key characteristics of cities is that access to
virtually everything is highly monetized – access to land, to building materials, to water,
to a place to defecate, getting to and from work, child care and, often, even schools and
health care. Where there is little public provision for basic infrastructure and services,
costs can be particularly high. Underestimates of the scale of urban poverty are
particularly high when use is made of an income-based poverty line that makes no
allowances for differences in living costs between countries – as in the World Bank’s
US$1 per person per day poverty line.

Reducing urban poverty without economic growth

The almost exclusive focus by most governments and international agencies on defining
and measuring poverty by income level leads to an assumption that economic growth is
the only real means by which poverty will be reduced. Even leaving aside any
reservations about the extent to which economic growth translates into increased real
income for poorer groups (who are often in the weakest position to benefit from
expanded economic opportunities), this also diverts attention from the many other ways
in which poverty can be reduced.

Take, for example, the case of infrastructure and services. Although it has become
unfashionable for international agencies to support these, the provision of good quality
water and sanitation can increase poorer groups’ incomes directly because households
who previously paid 10-30 per cent of their income to water vendors or kiosks and pay-
as-you use toilets now get better quality provision which also uses less income. Good
quality water and sanitation can also increase real incomes by greatly reducing the
amount that was previously spent on health care and medicines as a result of water-
related diseases and lost when income-earners were ill or had to nurse other ill family
members. Housing schemes that really respond to the needs and priorities of low-income
households can also reduce poverty – again reducing the health burden from infectious
and parasitic diseases and accidents, and also providing security, a larger asset base and
space for income-earning activities.
But ‘poverty-reducing’ measures outside of economic growth depend on local institutions
that can ‘deliver’ for the poor on one or more of the different aspects of poverty listed
above. The form of local institutions that can do so varies a lot with context; they can be
community organisations, federations of community organisations, local NGOs, local
foundations, municipal authorities or even, on occasion, national government agencies or
local offices of international agencies.

Urban Poverty Alleviation Programmes

Urban poverty alleviation is a challenging task before the nation which calls for
imaginative new approaches. The goal is to adequately feed, educate, house and employ
the large and rapidly growing number of impoverished city dwellers. The bulk of the
urban poor are living in extremely deprived conditions with insufficient physical
amenities like low-cost water supply, sanitation, sewerage, drainage, community centres,
health care, nutrition, pre-school and nonformal education. The need of the hour is to
assist the urban poor by helping them to set up micro-enterprises thereby providing them
avenues for enhancement or supplementation of their incomes. Another major area of
assistance to the urban poor is provision of funds for housing or shelter up gradation.

The Ministry of Tamil Nadu Urban Development is monitoring the implementation of

three significant programmes related to urban poverty alleviation:

1. The Nehru Rozgar Yojana

2. The Urban Basic Services for the Poor
3. The Environmental Improvement of Urban Slums

1. The Nehru Rozgar Yogana - The Yojana consisted of three schemes;

(i) the scheme of Urban Micro Enterprises,
(ii) the scheme of Urban Wage Employment and
(iii) the scheme of Housing and shelter Upgradation

2. The Urban Basic Services for the Poor –

(A) The Scheme of Housing and Shelter Up gradation seeks to provide assistance for
housing and shelter upgradation to the economically weaker sections of the urban
population as well as to provide opportunities for Wage Employment and upgradation of
construction skills. A loan upto a limit of Rs. 3,000/- at 7% rate of interest and a subsidy
upto a ceiling of Rs. 1,000/- is provided under this scheme to entitled beneficiaries for
Housing/Shelter upgradation. The loan amount of Rs. 3,000/- can be further enhanced by
an additional amount of Rs. 18,000/- under the EWS scheme of HUDCO.

(B) The centrally sponsored programme of Urban Basic Services was introduced in
1986 with the assistance of UNICEF for provision of basic social services and physical
amenities in urban slums. The programme aimed at convergence of social and physical
services rendered by different specialist departments like Health, Education, Social
Welfare and Industry/ Industrial Training in Urban Slums with special focus on child and
women survival and development through immunization, nutrition supplementation,
preschool and creche facilities and training for income generation in relation to social
services and provision of basic physical facilities such as water supply, drainage and low
cost sanitation in relation to physical services. The .programme emphasized community
based management through neighbourhood committees of the urban poor themselves.

3. Environmental improvement of Urban Slums –

The scheme aims at ameliorating the living conditions of urban slum dwellers and
envisages provision of drinking water, drainage, community baths, community latrines,
widening and paving of existing lanes, street lighting and other community facilities.