POVERTY AND

DEVELOPMENT
Prof. Hanumant Yadav
Hidayatullah National Law University,
Raipur

Prof. H. Yadav, LPD

INDEX

POVERTY : Meaning
13
Poverty in India

Prof. H. Yadav, LPD

10 14 -

Unemployment

Unemployment is a condition where

persons are seeking job to work on
remuneration but they are not getting it
looking to their qualification.
Thus Unemployment is Deprivation of
Employment or denial of employment
opportunities.
.
Prof. H. Yadav, LPD

UNEMPLOYMENT in india

1.
2.
3.

In 2012, the total number of

unemployed persons was 44.79
million persons. They
constituted 9.4 % of manpower.
Causes of Unemployment in India:
Population explosion
Slow rate of economic growth
Backwardness of agriculture
Prof. H. Yadav, LPD

Poverty
Prevailing education system
Lack of proper manpower of
planning

Prof. H. Yadav, LPD

Employment programmes

Realizing that poverty is major cause

of poverty, employment generation
schemes were launched.
National rural Employment Program
PMRY for urban areas
Jawahar Rozgar Yojna ( job to one
member of BPL family at least for 50
to 100 days in the year.)
Prof. H. Yadav, LPD

Law, Poverty and

Development

The objective of this course paper is to

impart in depth knowledge of poverty and
development to the students to make them
more enlightened, sensitive and actionoriented to the problems of Poverty and
Development.
This course paper discusses the rules and
regulations pertaining to provision of
social and economic justice to different
categories of poor classes and development
measures framed and enforced by the
State.
Prof. H. Yadav, LPD

POVERTY : Meaning

Poverty can be defined as a social

phenomenon in which a section of the society
is unable to fulfill its basic needs of life.
Poverty is a condition in which a person or
community lacks the essentials for a
minimum standard of well-being and life.
These essentials are material resources such
as food, safe drinking water, clothing and
shelter, or they may be social resources such
as access to health care, information and
education.
Prof. H. Yadav, LPD

Poverty : Meaning

Poverty is a state of social condition when a

large segment of society is deprived of the
minimum level of living.
Poverty is collective condition of poor people.
Poverty is lack of regular income to maintain
minimum level of living.
Consumption of less food than is required to
sustain a human body is known as condition
of extreme poverty.
Poverty is condition of lack of income and
wealth.
Prof. H. Yadav, LPD

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Other terms used to

indicate poverty

impoverishment - the state of having

little or no money and few or no material
possessions
Poverty is indicated by Poor economic or
financial condition of people.

Poverty Ratio

Poverty Ratio indicates ratio of poor

population to total population expressed
in terms of percent.
Prof. H. Yadav, LPD

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Poverty Line

The poverty line, is the minimum level of

income deemed necessary to achieve an
adequate standard of living.
Determining the poverty line is usually done
by finding the total cost of all the essential
items/ resources that an average human
adult consumes in one year.
This approach is needs-based in the sense
that an assessment is made of the minimum
expenditure needed to maintain a tolerable
life
Prof. H. Yadav, LPD

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POVERTY LINE IN INDIA

Poverty line measures the Incidence of poverty.

In India, per day calorie Intake has been taken
as base for poverty line.
2400 calorie in rural areas and 2100 calorie
intake in urban areas are required to sustain
human body of an adult male.
Those adults who are continuously deprived of
2400 calorie intake in rural areas and 2100
calorie in urban areas are treated as poor.
21.9 % of Indian population was living
below poverty line in 2012.

Prof. H. Yadav, LPD

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Poverty Line in India

In India, the prevailing prices of 1973-74 have

been taken as base for determing the Poverty
Line.
The poverty line represented monthly income
required for per capita expenditure of Rs. 49.00
for rural areas and Rs. 54.00 for urban areas in
1973-74.
For the year 2004-05, Poverty line represented
per capita monthly income of Rs.356.35 for
rural areas and Rs.538.60 in urban areas.
Persons below this income were treated as
persons living below poverty line .

Prof. H. Yadav, LPD

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India : Persons below Poverty

Line

The Planning Commission, which is the nodal

official agency for poverty estimation, has
estimated that 27.5% of the rural population
was living below the poverty line in 2004
2005,
down from 51.3% in 19771978,
and 36% in
1993-1994
75% of the poor are in rural areas with most of
them comprising daily wagers, self-employed
households and landless labourers
-----------------------------------------------------------[Source : 61st round of the National Sample Survey (NSS)]
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Rural Poverty in India

Year

Persons living below poverty line

--------------------------------------------------------------

1950-51
47 %
1960-61
45 %
1977-78
51 %
1987-88
39 %
2004-05
27 %
According to Prof. Dandekar and Rath, the
urban poor are only an overflow of the
rural poor, into the urban area.
Prof. H. Yadav, LPD

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World Bank Estimates of

Poverty

A)

B)

The World Bank defines

Extreme poverty as living on less than
US$ (PPP) 1 per day,
Moderate poverty as less than $2 a day.
It has been estimated that in 2001,
1.1 billion people had consumption
levels
below $1 a day and
2.7 billion lived on less than $2 a day.
Prof. H. Yadav, LPD

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Prof. H. Yadav, LPD

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PPP = Purchase Power

Parity

Exchange rates are

determined in such a way that
the prices of goods in different
countries are the same when
measured in the same
currency.
Prof. H. Yadav, LPD

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Magnitude of World
poverty

One third of deaths - some 18 million people a

year or 50,000 per day - are due to povertyrelated causes. That's 270 million people
during 1990-2005, the majority women and
children.
Every year nearly 11 million children die
before their fifth birthday.
In 2001, 1.1 billion people had consumption
levels below $1 a day and 2.7 billion lived on
less than $2 a day
800 million people go to bed hungry every day.
Prof. H. Yadav, LPD

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Social Poverty

Denial of opportunity to socially

backward people, i.e., Scheduled
castes, scheduled castes and other
very backward classes,

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Absolute and Relative

Poverty

Absolute Poverty : Absolute

poverty indicates incidence of
poverty i.e. total number of
poor people or percentage of
poor people to total population.
Absolute
poverty is measured by
poverty line and poverty ratio.
Prof. H. Yadav, LPD

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Relative Poverty

Relative poverty : Different concepts and

methods have been used to denote and
measure relative poverty.
One of the measure is estimate the
distance of actual distribution of income
and wealth from equal distribution of
income and wealth.
Lorenze curve and Gini-coefficients
are tools used to measure the magnitude
of relative poverty.
Prof. H. Yadav, LPD

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Relative poverty

Another concept of relative poverty is

distance mean income of upper
income strata ( upper 10 % or 20 % )
with the mean income of lower strata
( 10 % or 20 %). Gini coefficient is
used to measure this type of relative
poverty.
High Ginicoefficient indicates large disparity of
income and low coefficient indicates
low disparity.
Prof. H. Yadav, LPD

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Absolute and Relative

poverty

Generally income of person or

family is taken into account
while estimating Absolute
poverty whereas both income
and wealth are taken into
account for relative disparity.

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Multidimensional Poverty
Index

TheMultidimensional Poverty
Index(MPI)was developed in 2010
byOxford Poverty & Human
Development Initiativeand theUnited
Nations Development Programme[1]and
uses different factors to determine
poverty beyond income-based lists.
It shows the number of people who are
multidimensionally poor
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Multi Dimensiaonal
Poverty Index

1.

2.

The following ten indicators are used to

calculate the MPI
Education (each indicator is weighted
equally at 1/6)
Years ofschooling: deprived if no
household member has completed five
years of schooling
Childschool attendance: deprived if any
school-aged child is not attending school
up to class 8
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MPI
Health (each indicator is weighted
equally at 1/6)
3. Child mortality: deprived if any
child has died in the family
4. Nutrition: deprived if any adult or
child for whom there is nutritional
information is malnourished

Prof. H. Yadav, LPD

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MPI

Standard of Living (each indicator is

weighted equally at 1/18)

5. Electricity: deprived if the household has no

electricity
6. Sanitation: deprived if the households
sanitation facility is not improved (according
toMDGguidelines), or it is improved but shared
with other households
7. Drinking water: deprived if the household does
not have access to safe drinking water (according
to MDG guidelines) or safe drinking water is more
than a 30-minute walk from home roundtrip
Prof. H. Yadav, LPD

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MPI
8. Floor: deprived if the household has a
dirt, sand or dung floor
9. Cooking fuel: deprived if the household
cooks with dung, wood or charcoal.
10. Assetsownership: deprived if the
household does not own more than one
radio, TV, telephone, bike, motorbike or
refrigerator and does not own a car or
truck

Prof. H. Yadav, LPD

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Starvation line

Boyd-Orr, DG of FAO was the first person to

propound the notion of starvation line in
1945 which referred to the consumption of
less than 2300 calories per person per day.
The idea of starvation line has been
transformed by the economist into the
poverty line.
P.D. Ojha was the first economist in India to
estimate the extent of poverty in terms of
per capita per day expenditure.
Prof. H. Yadav, LPD

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Causes of Poverty in
India
1.

2.

3.
4.

5.

Unemployment ( underutilization of
manpower ) :
Capital deficiency : ( Low domestic
savings, Low domestic investment )
High growth of population
Social structure : Tribes, castes, rural
artisans, landless labourers,
Low economic growth
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Causes of poverty
6.

7.
8.
9.
10.
11.

Low level of production (Low Per

Capita Income )
Low productivity
Lack of natural resources
Lack of skill
Low technology
Lack of entrepreneurship

Prof. H. Yadav, LPD

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Remedial measures by
Govt.

1.

2.

Economic measures
Economic Planning: Preparation of
five year plans, fixing targets and
implementation of schemes.
Community development blocks and
extension services (Agriculture,
Panchayat, Cooperation, Animal
husbandry, PWD, Irrigation, Education,
Health, Women & child welfare, )
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Poverty Removal
programmes
3.

Welfare schemes for ST and SC

( Job reservations, Input Subsidies,
Scholarships, other reservations)
4. Land reforms : abolition of
zamindari system. land ceiling act,
distribution of surplus land to
landless persons, tenancy reforms,

Prof. H. Yadav, LPD

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Remedial measures by
Govt.
5. Agriculture development schemes:
Irrigation, New HYV technology,
(seeds, fertilizers ad mechanization),
Minimum support price for produce,
6. Special development programmes, namely
SFDA, MFAL, DPAP, Food for work
programme
7. 20 pt. Programme bonded labour,
untouchability, civil rights, (1975)

Prof. H. Yadav, LPD

36

Remedial measures by
Govt.
Poverty removal programmes
9.
Rural employment programmes, NREP,
JRY,
IRDP, SJGSY, SGRY, JRY,
8.

10. Public Distribution system

11. Universal literacy programme
12. Development of backward areas
programme
13. Skill Development programmes
Prof. H. Yadav, LPD

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Legal measures
Constitutional provisions
Ordinances/Acts, Statutes,
Law : Acts by Parliament
Rules and regulations passed by
the Legislative assembly
Orders

Prof. H. Yadav, LPD

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Complexities in
Measurement of Poverty

Estimation or measurement of
poverty is not easy. Due care is
required particularly by those who
are using secondary source of
information about the concept and
methodologies used by the
researcher or Institution
Prof. H. Yadav, LPD

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Complexities in
Measurement of Poverty
Individual or household measures:
The findings of majority of studies
are based on survey of household
level income or consumption. Needs
and Deprivation varies among
individual members of families, male,
female, children, aged persons, aged
persons, handicapped person
Prof. H. Yadav, LPD

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Complexities in
Measurement of Poverty
2. Private consumption only usually
included in estimation while private
consumption with publicly provided
Complexities in Measurement of Poverty
goods should be included in the
studies adopting Consumption
approach.
Goods and services supplied by
Govt. and charitable institution to
be included or not.
Prof. H. Yadav, LPD

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Complexities in
Measurement of Poverty

Monetary or monetary plus nonmonetary components of poverty :

In Income approach measurement
of poverty non-monetary goods
and services are often ignored.

Prof. H. Yadav, LPD

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Complexities in
Measurement of Poverty

Income or Consumption single

approach : The Income may be
higher but actual consumption
may be very low. Or income may
be low consumption level may be
high.faulty.

Prof. H. Yadav, LPD

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Complexities in
Measurement of Poverty

Absolute or Relative poverty:

Relative poverty in comparison to
other income group, societies or
country.
Customs, food habits, climatic,
regional factors influence the
needs of people.
Prof. H. Yadav, LPD

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Complexities in
Measurement of Poverty

Income approach : ( Often Wealth

factor is ignored ) : As a matter of
fact wealth is main criteria
denoting richness or poverty. Level
of living of an unemployed person
belonging to rich family may be
very high.
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Poverty Gap

Poverty Gap is the difference between

the per capita consumption of poor
and the poverty line.
Poverty Gap = E (Rs. 356 X1..n)/n
Poverty Gap Index (PGI) measures the
Poverty Gap.
Poverty Gap Index = E(Rs. 356 X1 ..n) x 100
n

E = sigma or sum of
Prof. H. Yadav, LPD

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Squared Poverty Gap

Squared poverty Gap (SPGI) : It

is composed of Poverty Gap ratio
and consumption and distribution
of poor as measured by the
coefficient of variation.

SPGI = underroot of sum of (356 Xn)

squared deviations divided by number and
multiplied by 100.
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Squared Poverty Gap

Poverty line
Consumption dev squared
Rs. 400 x
y
d
d2
---------------------------------------------------------------1 400
350 50
2500
2 400
300 100 10000
3 400
370
30
900
4
400
250
150
22500
5
400
320
80
6400
---------------------------------------------------------------

No.

2000

1590
Prof. H. Yadav, LPD

410

42300
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Human Poverty

Human poverty denotes as Deprivation

of basic human needs in terms of food,
shelter, education, health facilities.
The denial of opportunity and choices
are causes of human poverty.
Human Poverty Index is a composite
Index which measures three elements of
human life : 1) Longevity 2) knowledge
and 3) access to basic needs :
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Survival Deprivation Index

Longevity is measured in terms of

life expectancy at the age of 40 or
number of persons surviving at the
age of 40 years).
( Survival deprivation means that
these persons are not surviving
after age of 40.
Prof. H. Yadav, LPD

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Deprivation of Education /
Knowledge Index
1.
2.

Low Adult literacy Rate

Number of children not enrolled
or not in the school of age-group
7-14

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Deprivation of Economic
Provisioning

1.

2.

3.

Deprivation of basic human needs

% of Population no access to safe
drinking water
% of population without access to
primary health services
% of Underweight children be low 5
years
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Low Per Capita GNP/GNI

Poor Countries
Low Income countries
Developing ( Presently low income
but rate of growth is consistently
5 % or more ) / Lower-middle
income more than $US 875.
Under developed countries = Low
income countries
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Human Poverty Index in

India
Deprivation

Value

--------------------------------------------------------( Life expectancy at age of 40 ) %

16
2.
Deprivation of Education and knowledge
Adult Literacy rate %
1995
48
3. Deprivation in safe water, health
Services, provisioning & nutrition to child
29
Human Poverty Index Value
35.9
Human Development Report 1998
1.

Survival deprivation

1995

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Indicators of Poverty
Poor Countries/Underdeveloped
countries
1. Low per Capita
GNP / GNI
-----------------------------------------------------------------------------------------------------

Country
Per Capita GNP US$
-------------------------------------------------------------I - Low Income
$ 875 or less
2- Lower Middle Income $ 876 - 3465
3- Upper Middle Income $ 3466 - 10725
4- High Income
$ 10726 & above
--------------------------------------------------------------------------------------------------Prof. H. Yadav, LPD

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Per Capita National

Income US$ ( 1996-97
prices)

GNI (per capita US$)

World (Average ) US$ 6987
USA
US$ 43740
European Union US $ 31914
China
US $ 1740
India
US $ 720
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Indicators of Poverty
Significant size of Population
below Poverty line
3. Over-dependency on Agriculture
sector
A) Disguised Unemployment
B) Zero Marginal Productivity
4. Heavy Population pressure
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Low Rate of Capital Formation

6.
Inequality of Income and
Wealth
7. Underutilization of Resources
8. Lack of Entrepreneurship
9. Export of Raw material and
Minerals
5.

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Indicators of poverty
10. Technological backwardness
11. Poor Infrastructure
a) Poor Transport and
Communication facilities
b) Poor Banking facilities
c) Poor Technological and Professional
Education and Training Facilities
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Non-economic factors
1. Low Life Expectancy
2. High Infant Mortality Rate
3. High Mother Mortality Rate
4. High Rate Illiteracy
particularly among female
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5.
6.
7.

Traditional Outlook
Casteism and Regionalism
Low status of women

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Multi-dimensional Poverty
Index (MPI)

Multi-dimensional Poverty Index (MPI)

was constructed by Oxford Poverty
and Human Development (OPHD)
United Nations Development Program
(UNDP) 2011 Human Development
Report.
MPI has three dimensions ( Living
Standards, Education and Health ) and
10 indicators,
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Poverty

Poverty is human condition, It is

despair, grief and pain.
Lester Brown, World without borders, 1972.

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Statewise population below

poverty line - (Poorest
States)
.

State

& of population
below poverty line

All India

21.9 %

Chhattisgarh

39.9

Jharkhand

36.9

Bihar

33.7

Odisha

32.6

Assam

32.0

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Population living below

poverty line Important
States
States

& of population below

poverty line

India

21.9

Madhya Pradesh

31.6

Uttar Pradesh

29.4

Karnataka

20.9

West Bengal

20.0

Maharashtra

17.3

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States with Low % of

Poverty - 2012
..

States

& of population
below poverty line

Punjab

5.2

Kerala

7.0

Andhra Pradesh

9.2

Haryana

11.2

Tamilnadu

11.3

Rajasthan

14.7

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Rangarajan Committee
Poverty Line: Rural Area Rs. 32 per
day
Urban Area : Rs. 47 per day
29.5 % of Indian population is living
below povery line.

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Complexity in Measurement
of poverty

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Complexity in Measurement
of poverty

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Complexity in Measurement
of poverty

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Complexity in Measurement
of poverty

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Complexity in Measurement
of poverty

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Complexity in Measurement
of poverty

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National Social Assistance

programme

1.

NSAP Launched on 15th Aug. 1995

for providing assistance to
families below the poverty line.
National Old Age Pension Scheme
(NOAPS) : Pension of Rs. 75 per
month to destitute and to persons
above 65 years of age living
below poverty line.
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National Social
Development programmes
2.

3.

National Family Benefit Scheme (NBFS) :

Assistance of Rs. 10,000 in lump sum in case
of accidental death and Rs, 5000 in case of
natural death of bread winner living below
poverty line to the survivor.
National Maternity Benefit Scheme (NMBS)
Maternity benefit of Rs. 300/- for expectant
mothers per pregnancy upto first two live
births.

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Pradhan Mantri
Gramodaya Yojna (PMGY
To eradicate human poverty PMGY was Launched
in the year 2000-01 nation wide for sustainable
human development at the village level.
Per annum budget allotment : ,Rs. 2800 crore.
There are six components of this Yojna:
1.
Primary Health
2.
Primary Education
3.
Gramin Awas ( Rural Shelter)
4.
Rural Drinking Water Project
5.
Nutrition
6.
Rural Electrification
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