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Poverty – Definition, Types, Causes, Examples

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  • Difficulty Level : Basic
  • Last Updated : 29 Mar, 2022
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When a person is unable to get minimum basic necessities of life this situation is known as poverty. When parents are not in a condition to send their children to school or a situation where sick people cannot afford treatment and families do not have proper clean water, sanitation facilities, and regular jobs. Poor people get ill-treated and exploited at almost every place like farms, factories, government offices, hospitals, railway stations, etc. in this situation of Poverty

What is Poverty?

Poverty is defined as a state or circumstance in which an individual or a group lacks the financial means and necessities for a basic level of living. It can also be defined as a situation in which one’s earnings from work are insufficient to meet fundamental human requirements.

Poverty, according to the World Bank, is a severe lack of well-being that has various aspects. Low earnings and the inability to obtain the essential commodities and services required for a dignified existence are examples.

Poverty also includes poor health and education, a lack of access to safe drinking water and sanitation, a lack of physical security, a lack of voice, and a lack of capacity and chance to improve one’s life.

In 2011, 21.9% of India’s population was living below the national poverty threshold. 

Important points related to poverty are,

  • The two main dimensions of Poverty are Hunger and lack of shelter.
  • Poverty is a condition where one is barely having basic necessities of life. when parents are not able to send their children to school or a situation where individuals or families cant afford medical facilities
  • Lack of clean water and sanitation facilities is also one of the conditions of poverty.
  • Lack of regular job to earn or live a regular life with basic necessities of life.

Types of Poverty

There are two major kinds of Poverty, that are:

  • Absolute Poverty: When a household’s income falls below the amount required to sustain basic living standards (food, shelter, housing). This condition allows comparisons to be made across nations as well as throughout time.
  • Relative Poverty: It is defined from a social perspective as a living standard that is lower than the economic standards of the surrounding population. As a result, it is a measure of income difference. 

Causes of Poverty in India

  • India’s population has been continuously increasing throughout the years. It has increased at a pace of 2.2 percent per year for the past 45 years, implying that around 17 million people are added to the country’s population each year. This has a significant impact on the demand for consumer products.
  • Low Agricultural Productivity: The agriculture sector’s low productivity is a key source of poverty. Low productivity can be caused by a variety of factors. 
    • It is mostly due to fragmented and subdivided landholdings, a lack of cash, ignorance about modern farming technology, the use of conventional farming practices, loss during storage, and other factors. 
  • Inadequate Utilization of resources: The country suffers from underemployment and hidden unemployment, notably in the agricultural sector. Low agricultural productivity and a drop in living standards have ensued as a result of this.
  • Economic Development at a Slow Rate: India’s economic development has been slow, particularly in the first 40 years of independence before the LPG reforms in 1991.
  • Continuous Price hike: The country’s price increases have been consistent, adding to the burden carried by the poor. Although a few people have profited, the lower-income groups have suffered as a result, and are unable to meet even their most basic needs. 
  • Unemployment is another element that contributes to poverty in India. As the world’s population grows, so does the number of people looking for work. However, the increase of possibilities is insufficient to meet the demand for work.
  • Social Issues: In addition to economic problems, social factors obstruct India’s poverty eradication efforts. The laws of inheritance, the caste system, and certain customs, to name a few, are all obstacles in this respect.

Sample Questions

Question 1: Define mass poverty? Give two dimensions of Poverty?


When a large section of society in an economy has lack of basic necessities of life then It is termed as Mass Poverty. Two dimensions of Poverty are : Hunger and Lack of shelter.

Question 2: Which group of poverty affects the most in India?


There are some Social and Economic Groups of society which are most vulnerable to poverty, that are:

  • Social groups are most vulnerable to the poorer people of Scheduled Castes and Scheduled Tribes .
  • Economic group of society are most vulnerable to poverty are the people who are agricultural laborers and casual laborers as well as the backward class people , physically and mentally challenged people .

Question 3: What are the factors responsible for the reduction of Poverty in Punjab and Kerala?


The factors responsible for the reduction of Poverty in Punjab are,

  1. In Punjab main factor is high agricultural growth that has led to reduction of Poverty .
  2. In Kerala They have worked on human resource development , or invested in human capital  .

Question 4: What are headcount ratios and economic growth?


  • Head count ratio is the proportion of population that lives below the poverty line or hardly the people who get access to the basic facilities to survive .
  • Economic growth is defines as an increase in production real output of the country .

Question 5: How was the colonial government responsible for the underdevelopment of agricultural areas in India?


The colonial government responsible for the under development of agricultural area in India because under their control India’s agriculture remains fundamentally agrarian , more than 85 % of the country’s population was dependent on agriculture and lived in villages , As there is no proper resources for the development of agriculture , small farmers tend to borrow money for seeds , fertilisers and pesticides etc and later on failed to return the borrow amount that leads to high level of indebtedness and cause of poverty.

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