Poverty : Meaning, Characteristics, and Measures

What is Poverty?

Poverty is a particular issue that affects many countries around the world. There can not be a universally acknowledged definition of poverty. Broadly it can be said that:

Poverty refers to a state in which an individual is unable to fulfill even the basic necessities of life. The minimum requirements include food, clothing, shelter, education, and health facilities.

A nation suffers from a cycle of poverty when a large portion of the population is deprived of even the most necessities of life for an extended period. If the minimum needs are not fulfilled, a person has to undergo pain and suffering. Sickness and disabilities render him helpless in all aspects of life. Generation after generation person lives in poverty grows in poverty and dies in poverty. The population either breeds or multiplies itself.

Providing minimum basic needs to the people and poverty reduction have been major objectives of India. To achieve a basic living for everyone, the uplift of the poorest of the poor, integration of the impoverished into society, and a pattern of development envisioned in the next five-year plans were all prioritized. Poverty is a challenge not only for India but for the entire world as more than one-fifth of the world’s poor (around 300 million) live in India alone and are not able to meet their basic needs. Poverty has a variety of faces that have changed over time and from place to place and it has been described in a variety of ways. People most frequently wish to get out of poverty. Therefore, poverty is a call to action for both the wealthy and the poor, a call to alter the world so that more people may access education, healthcare, decent shelter, food, and protection from violence, as well as a voice in what happens in their communities. 

Who are the Poor?

Poverty is a heavy burden on humanity. A poor person lives a difficult life as he is not able to afford the necessities of life, which morally degrade them. He is incapable of acting like a human being. He feels demoralized by how society treats him. Poverty is a hard reality for a substantial portion of the Indian population. India’s poverty can be analyzed from two perspectives i.e. urban and rural. 

Poor in Urban and Rural areas

In Urban Areas, poor people include pushcart vendors, street cobblers, women who string flowers, vendors, rag pickers, and beggars. 

• The poor people possess few assets.
• They live in the kutcha hutments, with baked mud walls and roofs made of grass, thatch, bamboo, and wood. 
• The least fortunate among them don’t even have such homes.
• The majority of the urban poor are rural poor who moved to the urban areas in search of a better quality of life and a job.

In Rural Areas, landless agricultural labourers, tenant farmers with small landholding, or landless labourers who work in a range of non-agricultural activities are included among the poor people. 

• Many of the rural people are landless. Some people may own land, but it is merely dry land or wasteland.
• Many rural people are unable to eat even two meals a day.

Main Characteristics of Poverty

The main characteristics of Poverty are as follows: 

1. Hunger, Starvation, and Malnutrition:

Starvation and hunger are the basic problems of the poorest household. The rate of malnutrition among the poor is alarmingly high. 

2. Poor Health: 

Poor people are generally physically weak due to ill health, disability, or serious illness. Their children have a lower chance of surviving or being healthy when they are born.

3. Limited Economic Opportunities:

Due to their illiteracy and lack of skills, they have very limited opportunities. Poor people are highly vulnerable. Therefore, they are unable to negotiate their legal wages and get exploited by employers. 

4. Debt Trap:

Debt Trap is a situation in which a debtor is not able to repay the debt incurred. Poor people usually take loans from moneylenders, who charge high rates of interest that force them into persistent debt.

5. Lack of Facilities for Electricity and Water:

Poor people lack access to electricity. They cook their food on firewood and cow dung cake. A major part of the population that is poor does not have access to safe drinking water.

6. Gender Inequality:

Extreme gender inequality is seen in how women and men participate in the workforce, classroom, and in family decision-making. Besides, on the path to motherhood, less attention is provided to poor women. 

7. Bigger Families:

The poor families are more prominent in size, which makes their economic condition worse.

Measures of Poverty

A country can overcome the problem of poverty only when it identifies poor people. To identify them, it is essential to work out the extent of poverty. The two measures that determine the extent of poverty are as follows:

1. Relative Poverty:

Relative Poverty refers to the poverty of people, in comparison to other people, regions, or nations. For example, If A has a lower income than B, then it can be concluded that A is relatively poor. It facilitates the understanding of the relative population of different segments of society. Relative Poverty can be measured through the concepts of the Lorenz Curve and Gini Coefficient. However, the disadvantage of relative poverty is that it merely displays the relative positions of various segments of the population in the income hierarchy and does not account for how poor a person is or whether he is deprived of the basic requirements of life or not. 

2. Absolute Poverty:

Relative Poverty refers to the total number of people living below the poverty line. According to absolute measures, around 22% of India’s population is below the poverty line. Absolute poverty applies to less developed countries like India, wherever poverty is prevalent. With this, the number of poor people can be measured. Absolute Poverty can be measured through the concept of Poverty Line. However, the “Poverty line” used to measure absolute poverty does not make difference between the very poor and other poor. Moreover, it does not take into account social factors that generate and are responsible for poverty, like illiteracy, ill health, lack of access to resources, discrimination, or lack of civil and political freedoms.

For a more in-depth understanding of relative poverty and absolute poverty, let’s explore Difference between Relative Poverty and Absolute Poverty.

Measurement of Poverty: Pre and Post-Independent India

Pre-Independent India

Dadabhai Naoroji was the first person to debate the idea of poverty line in pre-independent India. He determined the poverty limit using the “Jail Cost of living”. To calculate the cost of an adult prisoner’s consumption, he selected items from the prisoner’s menu based on the going rate.

1. Dadabhai Naoroji referred to this expenditure as the expense of living in jail. He categorized the population into two parts, as only adults are imprisoned.

• He assumed that children made up one-third of the entire population. Only about half of them (i.e. 1/2 of 1/3 = 1/6) consumed a small portion, whereas the other half (i.e. 1/2 of 1/3 = 1/6) consumed half of an adult’s diet.
• Adults made up two-thirds of the population, and they consume a full diet.

2. Weighted Average of consumption of the three segments: The average poverty line is three-fourths of the adult jail cost of living.

Post-Independent India

Several attempts have been made to identify the number of poor in the country.

• The Planning Commission established a Study Group in 1962. This Planning Commission is now known as NITI Aayog.
• “Task Force on Projections of Minimum Needs and Effective Consumption Demand” was established in 1979.
• For the same reason, expert groups were formed in 1989 and 2005.

In addition to these organisations, various individual economists have also tried to create such a mechanism.