NPTEL - Humanities and Social Sciences - Indian Society: Issues and Problems
NPTEL - Humanities and Social Sciences - Indian Society: Issues and Problems
NPTEL - Humanities and Social Sciences - Indian Society: Issues and Problems
Incidence of Poverty
Incidence of poverty varies widely across social groups. High incidence of poverty
prevails among the scheduled tribe and scheduled caste population, which have suffered
from social and/or economic exclusion for centuries in India. More than 45% of
households among the ST group are poor while the corresponding number is only 15%
among the non-backward households classified under the „others‟ category, Data
suggests that the ¾th of the rural poor belong to the category of landless labourers and
marginal farmers. The incidence of poverty is highest among agricultural labour
households (59%), labour households (38.5%) and among Marginal Farmers (30%).
Factors responsible for poverty are Unemployment or underemployment among rural
labourers. It has been established that incidence of unemployment is highest among the
casual labourers. Even when they are employed, their weak bargaining power results in
low wages being paid to them. The market forces are so strong that the minimum wage
legislation is observed more in breach than in compliance.
Another cause of rural poverty is low asset base of the poor. According to data – worst 10
percent of rural population owns virtually nothing and bottom 30 percent just own 2
percent of total assets. It may also be noted that large number of rural poor remain in
poverty not only because they have very few assets, but also because most of these assets
are in the form of durable consumer goods, rather than assets such as land, implements,
livestock etc. which can increase their productive capacity.
Another major cause is low educational attainment of the poor. These educational
differentials are one of the main factors for relatively lower level of income among poor.
Another popular myth for poverty is rapid increase in population. Population growth puts
pressure on the land base and as a consequence the real per capita income falls. Semi-
feudal agrarian relation is another important cause of poverty. Land reforms initiated
after independence has not brought about substantial changes in agrarian relations.
Market Imperfections
According to Meier and Baldwin, the existence of market imperfections prevents
optimum allocation and utilization of natural resources, and the result is
underdevelopment, and this, in turn, leads to poverty. The development of natural
resources depends upon the character of human resources. But due to lack of skill and
low level of knowledge, natural resources remain unutilized, underutilised and misused.
Causes of Poverty in India
Colonial Exploitation: Colonial rule in India is the main reason of poverty and
backwardness in India. The Indian economy was purposely and severely de-industrialized
through colonial privatizations. British rule replaced the wasteful warlord aristocracy by a
bureaucratic-military establishment. However, colonial exploitation caused backwardness
in India. In 1830, India accounted for 17.6 per cent of global industrial production against
Britain's 9.5 per cent, but, by 1900, India's share was down to 1.7 per cent against
Britain's 18.5 per cent. This view claims that British policies in India, exacerbated by the
weather conditions led to mass famines, roughly 30 to 60 million deaths from starvation
in the Indian colonies. Community grain banks were forcibly disabled, land was
converted from food crops for local consumption to cotton, opium, tea, and grain for
export, largely for animal feed.
Lack of Investment for the Poor: There is lack of investment for the development of
poorer section of the society. Over the past 60 years, India decided to focus on creating
world class educational institutions for the elite, whilst neglecting basic literacy for the
majority. This has denied the illiterate population – 33 per cent of India – of even the
possibility of escaping poverty. Thus, there is no focus on creating permanent income-
generating assets for the poor people.
Social System in India: The social system is another cause of poverty in India. The
social subsystems are so strongly interlocked that the poor are incapable of overcoming
the obstacles.
India's Economic Policies: In 1947, the average annual income in India was US$439,
compared with US619 for China, US$770 for South Korea. But South Korea became a
developed country by the 2000s. License Raj prevailed with elaborate licenses,
regulations and accompanying red tape. Corruption flourished under this system.
Over-reliance on Agriculture: In India there is high level of dependence on primitive
methods of agriculture. There is a surplus of labour in agriculture. Farmers are a large
vote bank and use their votes to resist reallocation of land for higher-income industrial
projects. While services and industry have grown at double digit figures, the agriculture
growth rate has dropped from 4.8 per cent to 2 per cent. About 60 per cent of the
population depends on agriculture, whereas the contribution of agriculture to the GDP is
below 18 per cent. The agricultural sector has remained very unproductive. There is no
modernization of agriculture despite some mechanization in some regions of India.
High Illiteracy: Indian literacy rate rose almost tenfold during the British era. In 1947,
India's literacy rate matched China's. However, in 2007, China reported at 91 per cent
literacy rate versus 66 per cent for India. Now India suffers from about 35 per cent
illiteracy among the adult population. Literacy levels among SC, ST and females are very
low.
High Unemployment: There is high degree of underutilization of resources. The whole
country suffers from a high degree of unemployment. India is marching with jobless
economic growth. Employment is not growing, neither in the private sector, nor in the
public sector. The IT sector has become elitist, which does not improve the poverty
situation in the country. Disguised unemployment and seasonal unemployment is very
high in the agricultural sector of India. It is the main cause of rural poverty in India.
Lack of Entrepreneurship: The industrial base of India has remained very slender. The
industrial sickness is very widespread. The whole industrial sector suffers from capital
deficiency and lack of entrepreneurial spirit.