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Causes for Widespread Poverty in India

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  • Last Updated : 28 Mar, 2022

Poverty is described as the inability to satisfy fundamental demands due to a lack of appropriate financial resources. Food, clothing, and shelter are all basic requirements. On the other hand, poverty is described as a lack of resources mixed with a lack of opportunity. One can also see poverty by the inability to engage in recreational activities, in addition to a lack of financial resources. Those who are barely able to pay for food and shelter are unable to contemplate these additional costs. Every single one of us is affected by poverty. Our economy is impacted by the growing costs of the healthcare system, the justice system, and other systems that give assistance to those living in poverty.

Poverty has been associated with poor health, a lack of education or skills, an inability or reluctance to work, high rates of disruptive or disorderly behaviour, and improvidence. While these characteristics have been linked to poverty, including them in a definition of poverty would hide the link between them and the inability to meet one’s basic requirements.

Some of The Major Causes of Poverty:

1. Population Growth Rate:

One of the biggest causes of poverty in India is the country’s high population growth rate. As a corollary, there is a high rate of illiteracy, a lack of healthcare facilities, and a lack of resources. Moreover, high population growth has a negative influence on per capita income, further decreasing it. India’s fast-increasing population has long been a problem it has nearly quadrupled since independence in 1947. India’s population increased by 0.99 per cent in 2020 compared to the previous year(2019). Rapid population expansion is expected to lower per capita income growth and well-being, increasing poverty. Rapid population expansion also increases landlessness and thus the frequency of poverty in densely populated poor countries with land pressure.

2. Lower Agriculture Productivity:

Agricultural productivity, which is a measure of actual agricultural growth, has made a substantial contribution to the eradication of poverty in rural areas, as seen by its higher poverty reduction elasticity. About 70% of India’s population is reliant on agriculture. One of the main causes of low productivity is the growing population burden on agricultural land. Poverty would be decreased by 0.97 per cent with a 1% increase in agricultural output per capita. Due to partitioned and fragmented holdings, a lack of finance, the use of ancient cultivation methods, illiteracy, and other factors, agricultural output in India is extremely poor. 

3. Less Efficient use of Resources:

As we know every scarce resource in an economy is used and divided among producers and consumers in a way that maximizes economic output and benefits consumers, the economy is said to be efficient. However, in India, underemployment and concealed unemployment of human resources, as well as a lack of resource utilization, has resulted in low agricultural productivity. As a result, people’s quality of life plummeted.

4. Slow Economic Growth Rate:

An economic growth rate is the percentage change within a certain time period, the total value of all items and services produced in a country when compared to a previous period. In India, the rate of economic development is far below what is required to achieve a good level of development. As a result, there is still a discrepancy between the degree of availability and the demand for products and services. 

Unskilled labour is a low-cost way for businesses to meet their production or service goals without raising consumer costs, but small and medium businesses frequently hire these workers in order to save money, which can be ineffective and slow economic growth. There should be a focus on providing poor people with the necessary skills and assets to allow them to fully benefit from any increase inappropriate employment opportunities. 

5. Effect of Inflation:

Food price inflation was a major contributor to India’s high headline inflation. Food and service prices rise as a result of this inflation. Inflation lowers the purchasing power of money. It requires poor people to pay more to obtain the same amount of goods. As a result, people become more impoverished.

6. Unemployment:

Unemployment and poverty are linked directly and positively. It causes poverty, which leads to more unemployment. Unemployed persons have no way of generating money and are unable to provide for themselves and their families. Because of the loss of money, unemployment causes poverty. As of December 2021, India had 53 million unemployed persons, with a large number of them being women. The purchasing power of money has decreased as a result of rising prices, lowering the real worth of money earned. People in low-income groups are forced to cut back on their spending and consequently fall below the poverty line. The severity of poverty is proportional to the level of unemployment.

7. Unequal Distribution of Income:

Inequality affects all people in a society, but poverty affects only a few people. Since economic liberalization, average levels of income and educational attainment have grown, evidence suggests that India’s upward mobility has remained modest over time. Those who are born into lower sectors of society tend to stay poor, perpetuating inequity. India, according to the ‘World Inequality Report 2022,’ is one of the world’s most unequal countries, with rising poverty and an ‘affluent elite.’

8. Political Factors:

Political instability, poor governance, and corruption are all key factors that contribute to poverty in today’s world. Corruption can affect income inequality and poverty through a number of routes. These routes include overall growth, skewed tax systems, and ineffective social programme targeting, as well as its effects on asset ownership, human capital development, education inequities, and factor accumulation uncertainty. In India, corruption is a problem that impacts the economy of central, state, and local government agencies in a variety of ways, resulting in poverty. According to the report of the Corruption Perception Index (CPI) of 2021, India’s rank is 85th.

Conclusion:

Whatever classifications are used, one thing is certain, poverty is a multidimensional social problem. Poverty is an issue that everyone can agree on that has to be addressed, regardless of how it is defined. Collaboration among all members of our society is vital to ensure that all of our members have the opportunity to fulfill their full potential. It is easier for us to help one another if all members of society work together. The creation of better and more productive jobs, particularly those that can absorb large numbers of working poor people, should be prioritized. Investing in labour-intensive industries, particularly agriculture, encouraging a shift in the employment structure to higher-productivity occupations and sectors, and improving job quality in the informal economy are all necessary elements for creating such jobs.

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