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What are the Main Causes of Poverty?

Poverty refers to the situation of not having enough money to meet the needs of food, clothing, and housing. Every fourth person in India is poor, which means about 260 million people in India live in poverty. This means that it is the biggest focus of the poor in the world and shows the gravity of the challenge.

Poverty should be viewed as the poor living solely in a poor environment with isolated poor people, excluded from enjoying the social equality of the better-off in better surroundings. Social exclusion can be both a cause and a consequence of poverty in the traditional sense.



Deficiency against poverty is a measure that describes the better likelihood of certain communities (members of backward wealth) or individuals (similar to a widow or physically challenged person) being poor or living in future generations. 

Poverty Trap

Poverty Line

The poverty line is based on the level of earnings or consumption. A person is considered poor if his or her earning or consumption status falls below the mandated “minimum status” to meet their initial needs.  It represents the ability to satisfy the minimum condition of human needs. The line divides people into 2 groups:



  1. Above the poverty line
  2. Below the poverty line

POVERTY LINE

Causes of Poverty

There are many reasons for the increasing poverty in India. The low rate of growth continued from British imperialism till the nineteen-eighties. This resulted in fewer job opportunities and a lower rate of influx of resumes. It was accompanied by a high growth rate of population. Both are associated with greatly reducing the rate of growth of per capita income. Failure on both the profitable growth and population regulatory fronts perpetuated the cycle of poverty.

With the  Green Revolution,  employment opportunities were created in the agriculture sector; however, the goods were limited in some areas of ​​India. Industriousness assigned some positions, both in the public and private sectors, but these were not enough to absorb all the job applicants. Unable to find respectable jobs in the metropolis, many people were working as taxi clerks, traders, construction workers, domestic maintainers, etc. They began to live in slums on the outskirts of the metropolis and the problem of poverty, originally a pastoral phenomenon, also increased in the metropolitan area.

Another feature of high poverty grades has been the huge income inequalities. An important accounting for this is the unstable distribution of land and other treasures. Despite many programs, we have not been able to dive into the effect expressively and major policy initiatives such as land reforms; aimed at redistributing resources in pasture areas have not been duly and effectively implemented by the State Governments. 

Several disparate socio-cultural and economic factors are also responsible for poverty. People in India, including the poor, spend a lot of income to fulfill social scores and observe religious rituals. Small growers require money to purchase agricultural inputs such as seeds, poisons, etc. Since poor people hardly have any savings, they loan them from money lenders. Unable to repay, due to poverty, they become casualties of liability. Therefore, high debt status is both a cause and a consequence of poverty.

Major Causes of Poverty

The major causes of poverty are as follows:

Dimension of Poverty

The important dimensions of poverty are as follows:

Major Programs Initiated by Government

After India gained its independence,  action to reduce poverty in India was understood, as in estimating the poverty rate in India by Minhas in 1950, setting a poverty line for India in 1960, and many others. In the most critical post-independence period, the presidency of India’s third prime minister, Indira Gandhi, considered poverty as a “public consequence”. To achieve two main goals, remove poverty ‘Garibi Hatao‘ and achievement of self-reliance. D.D. Dhar fitted and initiated the 5th Five Year Plan through better measurement of income, higher growth rate advancement, and suggestive flourishing in the rural sector. 

A few important government initiatives are:

Frequently Asked Questions

Why are employment generation programs important in poverty alleviation in India?

  • The direct relation between employment and poverty alleviation: There is a close relationship between employment and poverty. If employment opportunities are created, more people will get employment, which will increase their income, thereby reducing poverty.
  • Higher Standard of Living: With the increase in employment opportunities, income will increase and poor people will be able to enjoy a higher standard of living and greater access to education, health facilities, proper sanitation, etc.

Discuss the major reasons for poverty in India.

  •  Illiteracy: The rate of illiteracy was very high in independent India just after independence. The reason for this was that the British did not spend equally on education and discouraged educational reforms. Over the years, the literacy rate has increased, but still, around 30 percent of Indians are illiterate, so they find it difficult to engage in well-played economic activities and thus remain poor.
  • Unemployment: It is the second major cause of poverty. Those who do not get work, sit idle. Unemployment is basically due to the unavailability of education which plays an important role in the social and economic development of the individual. 
  • Inequalities of Incomes: Unequal distribution of income is another cause of poverty. Money is given in the hands of some people and then they distribute it. One of the main reasons for this is the uneven distribution of land and other resources. Despite several policies, we have not been able to tackle this issue in a meaningful way. Land reforms aimed at redistributing wealth in rural areas have not been implemented properly.
  • Slow Growth of Employment Opportunities: There has been a slow growth of employment opportunities, especially in the industrial sectors. On the other hand, the population is increasing day by day leading to the growth of labor without adequate employment opportunities. Failure on both fronts: the promotion of economic growth and population control have perpetuated the cycle of poverty.

Identify the social and economic groups which are most vulnerable to poverty in India.

 Groups vulnerable to poverty can be divided into two groups:

  • Social groups vulnerable to poverty
  • Economic groups vulnerable to poverty
  • 29% of scheduled castes are poor and 43% of scheduled tribes are not able to meet their basic needs and come under social groups vulnerable to poverty.
  • The rural agricultural labor households and the urban casual labor households are the most vulnerable groups among the economic groups vulnerable to poverty

Give an account of the inter-state inequalities of poverty in India.

 In India, one of the aspects of poverty is inter-state inequalities. There are different amounts of poor people in every state. Although state-level poverty has shown a steady decline since the early seventies, success rates vary from state to state, some of the facts relating to inter-state inequalities of poverty.

  • Significant decline in poverty has been observed in Kerala, Andhra Pradesh, Gujarat, and West Bengal, Tamil Nadu.
  • In Orissa and Bihar, poverty is still a serious issue and these states have the highest poverty ratios in the country.
  • The percentage of urban poverty is also very high in states like Uttar Pradesh and Bihar.
  • The inequality is due to the changing social and political scenarios of different states.
  • Factors such as success in population control, availability of resources, and tourist destinations have also led to this disparity as all these factors are variable.

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