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Poverty – Definition, Types, Causes, Examples

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When a person is unable to get the minimum basic necessities of life this situation is known as poverty. Poverty means that the income level from employment is so less that basic human needs are not met. Poverty-stricken people can go without proper housing, clean water, healthy food, and medical attention.

Progress has been made in measuring and analyzing poverty, the World Bank Organisation is working to identify other indicators and dimensions of poverty. This includes identifying social indicators to track education, health, access to services, social exclusion, and vulnerability.



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. 

Understanding Poverty

Poverty is both an individual as well as a broader social problem. On the individual level, ends are not met which can lead to physical and mental issues. At the societal level, high poverty can damper to overall economic growth and be associated with problems like unemployment, crime, urban decay, lack of education, and detrimental health.

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 can’t 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.

Poverty as a phenomenon is as old as human existence, its significance has evolved over time. Under the traditional mode of economic production, widespread poverty had been accepted as inevitable. This meant, the total output of goods and services, even if equally divided, would still be insufficient for the entire population to lead a comfortable life. However, this was proved wrong by industrialization, as industrialized nations have outputs sufficient to raise the entire population to a comfortable level.

Poverty Trap

Types of Poverty

There are two major kinds of Poverty, that are:

  1. Cyclic Poverty: It refers to poverty that can be widespread throughout the population, but its occurrence is of limited duration. In non-industrialized countries, the inability to meet basic needs rests mainly on temporary food shortages caused by natural phenomena. Prices can be hiked because of scarcities of food, which brought misery.
  2. Collective Poverty: Collective poverty involves relative permanent insufficiency of means for secure basic needs. Both generalized and concentrated collective poverty can be transmitted from one generation to the next. Collective poverty usually is related to economic underdevelopment.
  3. Concentrated Collective Poverty: In many developed industrial countries, particular demographic groups are more vulnerable to long-term poverty. Their chief economic traits include unemployment, underemployment, unskilled occupation, and job instability.

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 in 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.

FAQs on Poverty

Question 1: What is Poverty?


Poverty refers to not having enough money to meet basic needs including food, clothing and shelter.

Question 2: What is Poverty Line?


A person is considered to be poor if his income or consumption level falls below the given “minimum level” necessary to fulfill the basic needs.

Question 3: What do you understand by human poverty?


It refers to denial of political, social, and economic opportunities to an individual to maintain a reasonable standard of living is known as human poverty.

Question 4:  Why do different countries use different poverty lines?


Each country uses different poverty lines as different countries basic needs vary according to the social and economic situations, because of the variable cost of living in different countries have different lines of poverty.

Question 5:  Which social group is most vulnerable to poverty in India?


Scheduled tribes and scheduled castes are social groups most vulnerable among with casual labour households in rural and urban areas that are dependent on agriculture labour are vulnerable economic group.

Last Updated : 16 Aug, 2023
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