essay on the meaning of poverty

Poverty Essay for Students and Children

500+ words essay on poverty essay.

“Poverty is the worst form of violence”. – Mahatma Gandhi.

How Poverty is Measured?

For measuring poverty United nations have devised two measures of poverty – Absolute & relative poverty.  Absolute poverty is used to measure poverty in developing countries like India. Relative poverty is used to measure poverty in developed countries like the USA. In absolute poverty, a line based on the minimum level of income has been created & is called a poverty line.  If per day income of a family is below this level, then it is poor or below the poverty line. If per day income of a family is above this level, then it is non-poor or above the poverty line. In India, the new poverty line is  Rs 32 in rural areas and Rs 47 in urban areas.

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Causes of Poverty

According to the Noble prize winner South African leader, Nelson Mandela – “Poverty is not natural, it is manmade”. The above statement is true as the causes of poverty are generally man-made. There are various causes of poverty but the most important is population. Rising population is putting the burden on the resources & budget of countries. Governments are finding difficult to provide food, shelter & employment to the rising population.

The other causes are- lack of education, war, natural disaster, lack of employment, lack of infrastructure, political instability, etc. For instance- lack of employment opportunities makes a person jobless & he is not able to earn enough to fulfill the basic necessities of his family & becomes poor. Lack of education compels a person for less paying jobs & it makes him poorer. Lack of infrastructure means there are no industries, banks, etc. in a country resulting in lack of employment opportunities. Natural disasters like flood, earthquake also contribute to poverty.

In some countries, especially African countries like Somalia, a long period of civil war has made poverty widespread. This is because all the resources & money is being spent in war instead of public welfare. Countries like India, Pakistan, Bangladesh, etc. are prone to natural disasters like cyclone, etc. These disasters occur every year causing poverty to rise.

Ill Effects of Poverty

Poverty affects the life of a poor family. A poor person is not able to take proper food & nutrition &his capacity to work reduces. Reduced capacity to work further reduces his income, making him poorer. Children from poor family never get proper schooling & proper nutrition. They have to work to support their family & this destroys their childhood. Some of them may also involve in crimes like theft, murder, robbery, etc. A poor person remains uneducated & is forced to live under unhygienic conditions in slums. There are no proper sanitation & drinking water facility in slums & he falls ill often &  his health deteriorates. A poor person generally dies an early death. So, all social evils are related to poverty.

Government Schemes to Remove Poverty

The government of India also took several measures to eradicate poverty from India. Some of them are – creating employment opportunities , controlling population, etc. In India, about 60% of the population is still dependent on agriculture for its livelihood. Government has taken certain measures to promote agriculture in India. The government constructed certain dams & canals in our country to provide easy availability of water for irrigation. Government has also taken steps for the cheap availability of seeds & farming equipment to promote agriculture. Government is also promoting farming of cash crops like cotton, instead of food crops. In cities, the government is promoting industrialization to create more jobs. Government has also opened  ‘Ration shops’. Other measures include providing free & compulsory education for children up to 14 years of age, scholarship to deserving students from a poor background, providing subsidized houses to poor people, etc.

Poverty is a social evil, we can also contribute to control it. For example- we can simply donate old clothes to poor people, we can also sponsor the education of a poor child or we can utilize our free time by teaching poor students. Remember before wasting food, somebody is still sleeping hungry.

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Concept of Poverty Definition Essay

Introduction, poverty as a measure of low income, the “basic needs” approach, poverty as an inescapable political act, the freedoms approach, poverty as the lack of wealth, how to measure poverty.

Poverty is a widely useful and common concept in many spheres of socioeconomic development. Albeit a universal concept, many people have different conceptions of the term. In fact, Misturelli and Heffernan (2010) say the concept has different clusters of meanings and definitions.

Other researchers believe the evolving nature of poverty contributes to its varied meanings. The discourse analysis of Misturelli and Heffernan (2010) was among the first research studies to document how the evolving nature of poverty gave it different meanings and definitions. Pantazis, Gordon and Levitas (2006) take a pragmatic construction of this argument by arguing that most people cannot define poverty in any way that they like.

The discourse, or subject areas, of these meanings provide the differences. This paper builds on these arguments by reviewing different conceptions of the term.

Since the 1880s, researchers have come up with three main conceptions of the term – “subsistence, basic needs and relative deprivation” (Talbot, Madanipour & Shucksmith 2013). Pantazis, Gordon and Levitas (2006) use the first criterion to define poverty by saying that it is “The Lack of income, access to good quality health, education and housing, and the exposure to poor quality living environments” (p. 30).

They say these attributes affect people’s well-being. In line with the same understanding, Pantazis, Gordon and Levitas (2006) say low income is an important component of poverty because it affects people’s well-being as well. Here, it is important to understand that short spells of low incomes do not necessarily affect people’s well-being.

However, long spells of low incomes are bound to have the reverse effect (ill-being). Although this discussion does not directly contribute to our understanding of poverty, it helps us to understand the views of other researchers who group low-income people as “poverty-stricken” people (Pantazis, Gordon & Levitas 2006).

This is false. In fact, unless the low income has a negative effect on the people affected, it is incorrect to equate low income with poverty. Nonetheless, this is one perception that outlines people’s understanding of the term.

Booth and Rowntree (cited in Pantazis, Gordon & Levitas 2006) are among the first researchers to explore the concept of poverty. They did so by studying the concept in the context of early 19 th century England.

Here, they opposed the commonly held belief that poverty meant the lack of financial resources (only). Instead, they expanded this understanding by saying that poor health, housing, and the lack of education (among other socioeconomic variables) also defined poverty (Pantazis, Gordon & Levitas 2006).

The United Nations (UN) also adopts a similar understanding of poverty by saying that the concept is “a condition characterised by severe deprivation of basic human needs, including food, safe drinking water, sanitation facilities, health, shelter, education and information” (United Nations Development Programme 2006, p. 5).

The main difference between this definition and other definitions of poverty highlighted in this paper is the broad understanding of the concept. Stated differently, other researchers use a narrow definition of socioeconomic factors (such as the lack of income) to define poverty, while the basic needs approach constructs poverty through a wider realm of factors that affect human well-being.

Many researchers have often explored the relationship between poverty and politics (United Nations Development Programme 2006). Most of them say that poverty is an inescapably political act. Global institutions, such as the UN, also hold the same view.

For example, the UN has often argued that poverty rarely exists in “politically mature” democracies (such as Europe) (United Nations Development Programme 2006). Conversely, they argue that poor countries, which do not have “politically mature” democracies, report the highest levels of poverty.

This argument further stretches to social and political structures. For example, many researchers believe that poverty is a product of extreme capitalistic societies (Talbot, Madanipour & Shucksmith 2013). This view closely aligns with the Marxist school of thought, but the United Nations Development Programme (2006) defines it as the Anglo-Saxon preoccupation.

Proponents of such views say that capitalistic structures create significant wage differentials that limit people’s growth opportunities (Talbot, Madanipour & Shucksmith 2013). Therefore, people who are born in poverty find it difficult to escape this cycle because of structural limitations (caused by capitalistic systems).

The United Nations Development Programme (2006) expounds on this analysis by saying that political structures (representative of capitalistic societies) need an “industrial reserve army,” which owners of factors of production can use and dispose at their will. Since researchers have different reservations regarding the factuality of this view, its proponents argue that political structures created poverty by relating it to income (Talbot, Madanipour & Shucksmith 2013).

They also say that although poverty existed before the creation of these capitalistic structures, it was mainly limited to life-cycle changes (such as elderly people experiencing the highest rates of poverty) (United Nations Development Programme 2006).

Understanding poverty through people’s ability to live freely and valuable lives emerged from critiques of the income approach to poverty. Its proponents believed that reducing poverty to income deprivation was a shallow understanding of the concept (United Nations Development Programme 2006). Instead, they argued that poverty was a broad concept that included people’s liberties and their enjoyment of the same.

For example, the Sen’s capability approach uses the same premise to define poverty (United Nations Development Programme 2006). The UN has also used this approach to construct the human development index (United Nations Development Programme 2006).

This approach rejects income deprivation as the main proxy for understanding poverty. Comparatively, it proposes an alternative approach of constructing poverty as the deprivation of the freedom to live a valuable life.

Researchers have defined poverty as the lack of wealth (or little wealth). Proponents of this view also define poverty as the inability to consume goods and services (low purchasing power) (Misturelli & Heffernan 2010). Additionally, this definition also includes no (or poor) access to quality services.

The subsistence conception of poverty emerged from Victorian England when nutritionists defined poverty as people’s inability to have an income that could maintain their physical health (United Nations Development Programme 2006). Although people had other needs, such as shelter and clothing, subsistence was the main proxy for defining poverty.

The United Nations Development Programme (2006) says, although this understanding is old, it has influenced scientific dogma for more than ten decades. For example, statistical figures used to describe the social conditions of different countries have often used subsistence measures to do so.

International agencies still use the same measure today. Past British territories used the same measure to rule their colonies. For example, former British authorities used the measure to determine the wages of black people in South Africa (during the apartheid era). They also used the same model to frame development plans in Asian colonies (United Nations Development Programme 2006).

Poverty measurement metrics mainly depend on the multiple definitions of the concept. Furthermore, different countries have varying measurements of the concept. For example, some European countries measure poverty by evaluating national statistics regarding the number of people who apply for social welfare support (United Nations Development Programme 2006).

Most of these measurement metrics relate to the construction of poverty as a lack of income. For example, Talbot, Madanipour & Shucksmith (2013) say many European countries use income metrics to define at-risk-populations of poverty. Others define poverty-stricken people as those that earn less than 60% of the national median of disposable income (Talbot, Madanipour & Shucksmith 2013).

Other measures of poverty align with the “basic needs” approach of poverty. However, this analysis is contextual because different parts of the world have different types of basic needs. For example, Europeans may define their basic needs as an annual holiday, quality food, and adequate housing (among other factors) (Vecernik 2004).

Therefore, here, it is difficult to define relative poverty as merely lacking enough resources to survive. In this regard, relative measurements make it difficult for statisticians to compare the rate of poverty across different regions.

This paper shows that most definitions of poverty align with the “resource view” (gaining access to resources, or lacking them). This paper has also shown that some researchers define poverty as an inescapable political act. Although mature democracies have low levels of poverty, it is misleading to argue that such democracies do not suffer from poverty at all.

Furthermore, these countries still grapple with inequality challenges, despite their low levels of poverty. In fact, these countries use a relative definition of poverty (Talbot, Madanipour & Shucksmith 2013). An interesting finding about this analysis is that most professionals (“non-poor” people) developed most of the definitions of poverty outlined in this paper. In other words, their definitions of poverty are expressions of their training and educational skills.

In fact, such definitions reflect the power of development professionals to define poverty based on their perceptions. This is an unfair representation of the concept because poor people should have the power to define it.

Based on the findings of this paper, safely, one could say that the definition of poverty depends on who is asking, how people understand it, and the type of audience. However, income is at the centre of the definition because, historically, people have used it to define the concept.

However, based on the varied views and constructs of poverty, and its relation to income, the latter is no less problematic than the concept of poverty itself. Nonetheless, based on an overall assessment of the findings of this paper, correctly, one could say that poverty affects income-deprived people who are unable to gain access to quality life determinants, such as quality food and shelter.

Therefore, a correct (or informed) understanding of poverty cannot merely depend on an abstract understanding of low income as the main proxy. Therefore, to understand the real measurement, or definition, of income, it is crucial to identify a specific income level, beyond which people experience deprivation.

Misturelli, F & Heffernan, C 2010, ‘The concept of poverty a synchronic perspective’, Progress in Development Studies, vol. 10, no. 1, pp. 35-58.

Pantazis, C, Gordon, D & Levitas, R 2006, Poverty and Social Exclusion in Britain , The Policy Press, Bristol.

Talbot, H, Madanipour, A & Shucksmith, M 2013, The Territorial Dimension of Poverty and Social Exclusion in Europe, University of Newcastle, New Castle.

United Nations Development Programme 2006, Poverty in Focus , < https://ipcig.org/pub/IPCPovertyInFocus9.pdf >.

Vecernik, J 2004, ‘Who Is Poor in the Czech Republic? The Changing Structure and Faces of Poverty after 1989’, Czech Sociological Review , vol. 40, no. 6, pp. 807–834.

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What Is Poverty?

Understanding poverty, aspects of poverty, discrimination and poverty, how poverty is measured, how to reduce poverty, the bottom line, what is poverty meaning, causes, and how to measure.

James Chen, CMT is an expert trader, investment adviser, and global market strategist.

Thomas J Catalano is a CFP and Registered Investment Adviser with the state of South Carolina, where he launched his own financial advisory firm in 2018. Thomas' experience gives him expertise in a variety of areas including investments, retirement, insurance, and financial planning.

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Investopedia / Laura Porter

The term poverty refers to the state or condition in which people or communities lack the financial resources and other essentials for a minimum standard of living . As such, they cannot meet their basic human needs.

People and families who live in poverty may go without proper housing, clean water, healthy food, and medical attention. Each nation may have its own criteria for determining the poverty line and counting how many of its people live in poverty.

Poverty is a socioeconomic condition that is the result of multiple factors—not just income. These factors include race, sexual identity, sexual orientation, and access to education, among others.

Key Takeaways

• Poverty is a state or condition in which a person or community lacks the financial resources and other essentials for a minimum standard of living.
• Poverty-stricken people and families might go without proper housing, clean water, healthy food, and medical attention.
• Poverty is an individual concern as well as a broader social problem.
• Welfare programs are used by governments to help alleviate poverty.
• Poverty is the result of a confluence of factors, and not determined solely by income.

Poverty refers to the lack of adequate financial resources such that individuals, households, and entire communities don't have the means to subsist or to acquire the basic necessities for a flourishing life. This absence of means can result in struggles to obtain food, clothing, shelter, and medicine.

Poverty is both an individual concern as well as a broader social problem. At the individual or household level, not being able to make ends meet can lead to a range of social, physical, and mental issues. At the societal level, high poverty rates can be a damper on economic growth and be associated with problems like crime, unemployment , urban decay, poor education, and poor public health.

Governments often put social welfare programs in place to help lift individuals, families, and communities out of poverty. Some countries have stronger welfare states (social safety nets) than others. For instance, the United States tends to be much more individualistic and has relatively limited welfare programs. European countries, in comparison, have a much broader range of welfare programs and supports for those in need.

37.9 Million

According to the latest census, the number of people in the U.S. who lived in poverty in 2022, or 11.5% of the nation's population.

Poverty in the U.S.

Poverty status in the U.S. is assigned to people whose income falls under a certain threshold, which is set by the Department of Health and Human Services (HHS) . U.S. poverty rates, or the percentage of the U.S. population living in poverty, are calculated by the U.S.  Census Bureau .

When measuring poverty, the Census Bureau excludes the following people:

• Institutionalized people
• People living in military quarters
• People living in college dormitories
• Individuals under the age of 15

U.S. Poverty Thresholds

Each year, the Census Bureau updates its poverty threshold statistics. The table below shows the 2022 income thresholds for those in poverty. Each column represents the number of people living in a household under the age of 18.

• The poverty income threshold for a family of four with two children under the age of 18 was $29,678 per year.
• For two people over age 65 with no children under 18, the poverty threshold was $17,689 per year.

Poverty thresholds, as well as the number of children under the age of 18 in a home, are important because they help determine how government aid such as food assistance and medical care should be allocated. The measurement for those in poverty uses pretax income or income before taxes are taken out by the Internal Revenue Service (IRS) .

Global Poverty

Poverty has decreased in developed countries since the Industrial Revolution . Increased production reduced the cost of goods, making them more affordable, while advancements in agriculture increased crop yields , as well as food production.

The international poverty line is a monetary threshold under which an individual is considered to be living in poverty. This figure is calculated by taking the poverty threshold from each country—given the value of the goods needed to sustain one adult—and converting it into U.S. dollars. The current international poverty line is $2.15 per day.

Many people around the globe still struggle to make ends meet. According to the World Bank , an estimated 700.6 million people lived in extreme poverty in September 2023.

It's estimated that more than 40% of the world's population lives in poverty, with the U.S. scoring the worst among developed nations. According to a report published in the journal Frontiers in Public Health, communities of color are more susceptible to poverty because of "racist notions of racial inferiority and frequent denial of the structural forms of racism and classism" globally and within the U.S.

COVID-19 was responsible for plunging roughly 100 million more people into extreme poverty, according to the World Bank.

Poverty and Children

The impact of poverty on children is substantial. Children who grow up in poverty typically suffer from severe and frequent health problems. Infants born into poverty have an increased chance of low birth weight, which can lead to physical and mental disabilities.

In certain developing countries, poverty-stricken infants are nine times more likely to die in their first month compared to babies born in high-income countries. Those who live may have hearing and vision problems.

Children in poverty tend to miss more school due to sickness and endure more stress at home. Homelessness is particularly hard on children because they often have little to no access to healthcare and lack proper nutrition, which often results in frequent health issues.

What Causes Poverty?

Poverty is a difficult cycle to break and can pass from one generation to the next. It is often determined by socioeconomic status, ethnicity, gender, and geography.

Many people are born into poverty and have little hope of overcoming it. Others may fall into poverty because of negative economic conditions, natural disasters , or surging living costs, as well as drug addiction, depression, and mental health issues.

Other root causes of poverty include:

• Limited to no job growth
• Poor infrastructure
• Conflict and war
• High cost of living
• Social barriers
• Lack of government support

For those able to move out of poverty, progress is often temporary. Economic shocks, food insecurity , and climate change threaten their gains and may force them back into poverty.

Typical consequences of poverty include alcohol and substance abuse, little to no access to education, poor housing and living conditions, and increased levels of disease. Access to good schools, healthcare, electricity, clean drinking water, and other critical services remains elusive for many in poverty.

Heightened poverty is likely to cause increased tensions in society as inequality increases and, in turn, lead to rising crime rates.

As noted above, poverty isn't simply related to income levels. In fact, there are a number of factors that can push people to or below the poverty line. Discrimination is just one of them.

In some cases, governments may pass certain laws and regulations that prevent certain individuals or communities from accessing services, such as healthcare, education, or social services. These people may also be denied access to the labor market or housing, which can prevent them from reaching a suitable standard of living. In other cases, deep-rooted societal beliefs can isolate individuals, families, and entire communities.

Some of the most common groups of people who may experience this type of discrimination include:

• People living with HIV/AIDS
• Black, Indigenous, and People of Color
• Women, including single mothers
• Members of the LGBTQ+ community

According to the most recent statistics from the Williams Institute at the UCLA School of Law, poverty rates among members of the LGBTQ+ community have dropped since the COVID-19 pandemic. But rates are still higher than for those who don't identify as LGBTQ+. The most recent report showed that:

• 17% of LGBT people in the U.S. lived in poverty in 2021 compared to 12% in non-LGBT communities
• 21% of transgender people lived in poverty in the U.S. in 2021 compared to 20% of cisgender bisexual women
• 26% of LGBT families with children experienced poverty in 2021

The report also indicated that LGBTQ+ people of color—notably, "Black, Latinx/Hispanic, Native Hawaiian/Pacific Islander (NH/PI), American Indian/Alaskan Native (AI/AN), and Multiracial people"—are more likely to experience poverty compared to White or Asian Americans.

Poverty is commonly measured using income thresholds in many countries. Centralized bodies like the Census Bureau collect data and update the information on an annual basis based on inflation .

This information, which, in the U.S., is reported through the Consumer Price Index for All Urban Consumers (CPI-U) , generally includes income thresholds compiled from different sizes and types of families or households. Each family member in a household that falls under the threshold is considered to be in poverty, according to the Census Bureau.

Certain types of individuals are not included in the count, as their level of poverty cannot be determined. These groups include:

• People within certain group settings like prisons and nursing homes
• Individuals living in military barracks
• Those living in college dorms
• People under the age of 15 whose income cannot be determined

Keep in mind that using income thresholds is just one way that countries measure poverty.

The United Nations and the World Bank are major advocates of reducing world poverty. The World Bank has an ambitious target of reducing poverty to less than 3% of the global population by 2030. Some of the actionable plans to eliminate poverty include the following:

• Installing wells that provide access to clean drinking water
• Educating farmers on how to produce more food
• Constructing shelter for those in need
• Building schools to educate disadvantaged communities
• Providing enhanced access to better healthcare services by building medical clinics and hospitals

For poverty to be eradicated as the World Bank intends, communities, governments, and corporations need to collaborate to implement strategies that improve living conditions for the world’s poor.

Some of these strategies may include boosting socioeconomic conditions, fighting and eliminating systemic racism, establishing minimum wages that align with the cost of living, providing paid leave, and promoting pay equity .

What Countries Have the Highest Poverty Rates?

The countries with the highest poverty rates include South Sudan (82.30%), Equatorial Guinea (76.80%), Madagascar (70.70%), Central African Republic (68.80%), and Burundi (64.09%).

Which States Have the Highest Poverty Rates?

As of 2024, the states with the highest poverty rates were Louisiana (19.60%), Mississippi (19.40%), New Mexico (18.40%), West Virginia (16.80%), and Kentucky (16.50%). The District of Columbia's poverty rate is 16.50%.

Can Poverty Be Solved?

The answer to this question is complicated and nuanced. Social welfare programs and private philanthropy are some avenues through which to provide for those in poverty, along with access to essentials like clean water, good food, and adequate healthcare. However, more is needed. Programs that encourage and help impoverished individuals to obtain skills, jobs, and education are crucial for a longer-term cure.

Poverty is defined as the state or condition where people and communities cannot meet a minimum standard of living because they lack the proper resources . These include (but aren't limited to) financial resources, basic healthcare and education, clean drinking water, and infrastructure.

Living in the socioeconomic condition of poverty is a result of multiple factors such as race, sexual identity, sexual orientation, and access to education, among others.

Organizations such as the United Nations and the World Bank, which believe that poverty will continue to grow well beyond 2030, urge nations to fight it by implementing policies and regulations that can drastically improve the quality of living for all communities.

U.S. Census Bureau. " Poverty in the United States: 2022 ."

U.S. Department of Health & Human Services. " Poverty Guidelines ."

U.S. Census Bureau. " Differences Between Available Surveys & Programs for Poverty ."

U.S. Census Bureau. " How the Census Bureau Measures Poverty ."

U.S. Census Bureau. " Poverty Thresholds ."

U.S. Department of Health & Human Services. " Programs that Use the Poverty Guidelines as a Part of Eligibility Determination ."

The World Bank. " Fact Sheet: An Adjustment to Global Poverty Lines ."

The World Bank. " Global Poverty Monitoring Technical Note: September 2023 Update to the Poverty and Inequality Platform (PIP) ."

Frontiers. " Poverty, Racism, and the Public Health Crisis in America ."

The World Bank. " Poverty ."

National Library of Medicine. " Distribution and Determinants of Low Birth Weight in Developing Countries ."

The World Bank. " A Child Under 15 Dies Every Five Seconds Around the World – UN Report ."

UNICEF. " Levels and Trends in Child Mortality ."

UCLA School of Law Williams Institute. " LGBT Poverty in the United States ."

The World Bank. " Ending Extreme Poverty ."

World Population Review. " Poverty Rate by Country 2024 ."

World Population Review. " Poverty Rate by State 2024 ."

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Poverty – Dimensions and Challenges Explained

Last updated on February 25, 2024 by Pallavi Aggarwal

Poverty is a state or condition in which a person lacks the resources for a minimum standard of living.

Traditionally, the term poverty refers to lacking enough resources to provide the necessities of life – food, clean water, shelter, and clothing. But modern economists extend the term to include access to health care, education, and even transportation.

Poverty is often further divided into absolute poverty and relative poverty.

Table of Contents

Poverty Definition by the United Nations (UN)

Fundamentally, poverty is a denial of choices and opportunities, a violation of human dignity.

• It means a lack of basic capacity to participate effectively in society.
• It means not having enough to feed and cloth[e] a family, not having a school or clinic to go to, not having the land on which to grow one’s food or a job to earn one’s living, not having access to credit.
• It means insecurity, powerlessness, and exclusion of individuals, households, and communities.
• It means susceptibility to violence, and it often implies living in marginal or fragile environments, without access to clean water or sanitation.

As per the United Nations Organisation (UN), poverty entails more than the lack of income and productive resources to ensure sustainable livelihoods. Its manifestations include hunger and malnutrition, limited access to education and other basic services, social discrimination and exclusion, as well as the lack of participation in decision-making.

Poverty Definition by the World Bank

In 1990, the World Bank introduced the concept of ‘poverty line’ to capture absolute poverty. Then, it was set at $1 per day.

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As per the revised measures (2017), the World Bank defines extreme poverty as someone living on less than US$1.90 per day. This figure is known as the International Poverty Line (IPL).

In an attempt to be more precise with its classifications, the organization recently added new standards of poverty for people living in middle and high-income countries. Now, poverty lines are set at $3.20 a day for people in “lower-middle-income” countries, such as Egypt or India, and $5.50 a day for “upper-middle-income” countries, such as Jamaica or South Africa. The World Bank also released a third standard for high-income countries, like the US, at $21.70 a day.

In 2018, the World Bank introduced a Societal Poverty Line (SPL) , to capture the relative aspect of poverty. The SPL is a hybrid line, combining the US$1.90-a-day absolute poverty line with a relative component that increases as median consumption or income in an economy rises.

However, no single indicator can capture the multiple dimensions of poverty.

Poverty Estimation by Dr Amartya Sen

Dr Amartya Sen provided a useful alternative to understanding poverty.

His capability approach to understanding poverty goes beyond income and stresses the whole range of means, available to achieve human capabilities such as literacy, longevity, and access to income.

Poverty Line

The conventional approach to measuring poverty is to specify a minimum expenditure (or income) required to purchase a basket of goods and services necessary to satisfy basic human needs. This minimum expenditure is called the poverty line.

The basket of goods and services necessary to satisfy basic human needs is the Poverty Line Basket (PLB).

The proportion of the population below the poverty line is called the poverty ratio or headcount ratio (HCR).

Most countries and international institutions (World Bank, United Nations, etc.) follow a similar approach to counting the poor.

Also read: Economic and Social Development – Sustainable Development, Poverty, Inclusion, Demographics, Social Sector Initiatives, etc.

The Global Multidimensional Poverty Index (MPI)

The Global Multidimensional Poverty Index (MPI) is an international measure of multidimensional poverty covering 107 developing countries.

Global MPI was first developed in 2010 by the Oxford Poverty and Human Development Initiative (OPHI) and the United Nations Development Programme (UNDP) for UNDP’s Human Development Reports.

The Global MPI is released at the High-Level Political Forum (HLPF) on Sustainable Development of the United Nations in July, every year.

Global MPI 2020

The Global Multidimensional Poverty Index (MPI) compares acute multidimensional poverty for 107 countries in developing regions. These countries are home to 5.9 billion people, three-quarters of the world’s population.

Of these people, 1.3 billion people (22%) are identified by the global MPI as multidimensionally poor as per the Global Multidimensional Poverty Index 2020.

According to Global MPI 2020, India is 62 nd among 107 countries with an MPI score of 0.123 and a  27.91% headcount ratio , based on the NFHS 4 (2015/16) data.

3 Dimensions and 10 Indicators in MPI

The MPI assesses poverty at the individual level.

If a person is deprived in a third or more of ten (weighted) indicators, the global MPI identifies them as ‘MPI poor’.

The extent – or intensity – of their poverty is also measured through the percentage of deprivations they are experiencing.

Other parameters include:

• disempowerment
• poor quality of work
• social exclusion
• rural-urban disparity
• the threat of violence,
• living in environmentally hazardous areas

The need for understanding multiple connotations

• Monetary-based poverty measures are inadequate: In most cases, not all individuals who are income-poor are multidimensionally poor, and not all multidimensionally poor individuals are income-poor.
• Economic growth does not always reduce poverty or deprivation.  Several studies have found that economic growth is not strongly associated with a reduction in other deprivations, such as child malnutrition or child mortality.
• Poverty as multidimensional : Poor people describe ill-being to include poor health, nutrition, lack of adequate sanitation and clean water, social exclusion, low education, bad housing conditions, violence, shame, disempowerment, and much more.
• Need for more policy-relevant information on poverty, so that policymakers are better equipped to deal with it: For example, an area in which most people are deprived of education requires a different poverty reduction strategy from an area in which most people are deprived of housing conditions.

Poverty Estimation in India

In India, the first official rural and urban poverty lines at the national level were introduced in 1979 by Y. K. Alagh Committee and official poverty counts began for the first time.

Later, in 1993, the D. T. Lakdawala Committee extended these poverty lines to states and over time allowing official poverty counts over time and in the states.

In 2005, recognizing that the rural poverty line was too low, the government appointed the Tendulkar committee to take a fresh look at the poverty lines. Reporting in 2009, the Tendulkar Committee revised upward the rural poverty line. Continued media criticisms led the government to appoint the Rangarajan Committee in 2012.

Reporting in June 2014, the Rangarajan Committee recommended raising further both the rural and urban poverty lines. The decision is yet to be taken on the Rangarajan Committee recommendations.

Therefore, the Tendulkar poverty line remains the official poverty line and is the basis of the current official poverty estimates in 1993-94, 2004-05, and 2011-12.

Note: As per the Tendulkar estimation, the percentage of people living below the poverty line in India is 21.9% . However, as per Rangarajan’s estimation, the percentage of people living below the poverty line in India is 29.5%.

Also read: Urban Poverty

Poverty alleviation programs in India

India has been conducting various poverty alleviation programs.

Employment programmes and skill-building

• Jawahar Gram Samriddhi Yojana:  The JRY was meant to generate meaningful employment opportunities for the unemployed and underemployed in rural areas through the creation of economic infrastructure and community and social assets.
• Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) 2005: The Act provides 100 days of assured employment every year to every rural household. One-third of the proposed jobs would be reserved for women. Under the programme, if an applicant is not employed within 15 days s/he will be entitled to a daily unemployment allowance.
• National Rural Livelihood Mission : Ajeevika (2011): It evolves out the need to diversify the needs of the rural poor and provide them jobs with regular income every month. Self Help Groups are formed at the village level to help the needy.
• National Urban Livelihood Mission : The NULM focuses on organizing urban poor in Self Help Groups, creating opportunities for skill development leading to market-based employment and helping them to set up self-employment ventures by ensuring easy access to credit.
• Pradhan Mantri Kaushal Vikas Yojana : It will focus on the fresh entrants to the labor market, especially the labor market and class X and XII dropouts.

Food and shelter

• Food for Work Programme:  It aims at enhancing food security through wage employment. Food grains are supplied to states free of cost, however, the supply of food grains from the Food Corporation of India (FCI) godowns has been slow.
• Annapurna: This scheme was started by the government in 1999–2000 to provide food to senior citizens who cannot take care of themselves and are not under the National Old Age Pension Scheme (NOAPS). This scheme would provide 10 kg of free food grains a month for eligible senior citizens. They mostly target groups of ‘poorest of the poor’ and ‘indigent senior citizens’.
• Pradhan Mantri Awaas Yojana : It has two components: Pradhan Mantri Awaas Yojana (Grameen) and Pradhan Mantri Awaas Yojana (Urban). It was launched in 2015. It unites schemes like Ujjwala Yojana (provides LPG to BPL), access to toilets, water, and drinking water facilities, and Saubhagya Yojana (electricity).
• Other schemes like the Integrated Child Development Program, Midday Meal scheme, etc are also providing food to the needy sections like children and women.

Access to credit

• Pradhan Mantri Kisan Samman Nidhi : This scheme aims to provide financial assistance to provide working capital support to all the landholding farmers. This brings in the idea of universal basic income for the farmers in India.
• Pradhan Mantri Jan Dhan Yojana : It aimed at direct benefit transfer of subsidy, pension, insurance, etc., and attained the target of opening 1.5 crore bank accounts. The scheme particularly targets the unbanked poor.
• Integrated Rural Development Programme (IRDP ): It was introduced in 1978-79 and aimed at assisting the rural poor in the form of subsidy and bank credit for productive employment opportunities through successive plan periods.
• The incidence of extreme poverty continues to be much higher in rural areas than in urban areas.
• Despite rapid growth and development,  an unacceptably high proportion of our population continues to suffer from severe and multidimensional deprivation. 
• While a large number of poverty alleviation programmes have been initiated, they function in silos. There is  no systematic attempt to identify people who are in poverty , determine their needs, address them, and enable them to move above the poverty line.
• The  resources allocated to anti-poverty programmes are inadequate and there is a tacit understanding that targets will be curtailed according to fund availability. For instance, the Mahatma Gandhi National Rural Employment Guarantee Act does not provide the guaranteed 100 days of work in many states.
• There is  no method to ensure that programmes reach everybody they are meant for .
• Lack of proper implementation and right targeting
• There has been a  lot of overlapping of schemes.
• Every year a huge number is added to the population pool of the country.  This renders the scheme ineffective.

Way Forward

The World Health Organization has described poverty as the greatest cause of suffering on earth. Poverty eradication should not be the goal of the government but the goal of the government policies should be to create prosperity. Both monetary and non-monetary measures of poverty are needed to better inform the policies intended to address the needs and deprivations faced by poor populations.

Accelerating rural poverty reduction:

• It’s  not just about agricultural growth , which has long been considered the key driver of poverty reduction. Rural India is not predominantly agricultural and shares many of the economic conditions of smaller urban areas.
• Capitalizing on the growing connectivity between rural and urban areas , and between the agriculture, industry, and services sectors, has been effective in the past.

Creating more and better jobs

• Future efforts will need to address job creation in more productive sectors, which has until now been lukewarm and has yielded few salaried jobs that offer stability and security.

Focusing on women and Scheduled Tribes

• The most worrying trends are the  low participation of women in the labour market and the  slow progress among scheduled tribes .
• India’s women  have been  withdrawing from the labour force since 2005 and less than one-third of working-age women are now in the labour force. As a result, India today ranks last among BRICS countries, and close to the bottom in South Asia in female labour force participation.
• Scheduled Tribes  started with the highest poverty rates of all of India’s social groups, and have progressed more slowly than the rest.
• Women and Scheduled Tribes  are at risk of being locked out of India’s growth and prosperity.

Improving human development outcomes for the poor

• The recent past shows that some problems, such as  undernutrition and open defecation , are endemic and not only confined to the poor but others too, and have not improved with economic growth.
• Better health, sanitation, and education will not only help raise the productivity of millions, they will also empower the people to meet their aspirations and provide the country with new drivers of economic growth.

Together with mooting the discussion on the need to provide a universal basic income , infrastructural and skill development combined with effective implementation of welfare policies will go a long way in eradicating poverty in the country.

Read:  Household Consumption Expenditure Survey (HCES)

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Home — Essay Samples — Social Issues — Poverty in America — Understanding The Causes of Poverty

Understanding The Causes of Poverty

• Categories: Poverty in America

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Published: Aug 1, 2024

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