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India still has the world’s largest number of poor people in a single country. Of its nearly 1 billion inhabitants, an estimated 350-400 million are below the poverty line, 75 per cent of them in the rural areas.

Recent positive economic developments in India have mainly helped upper- and middle-class Indians. India still suffers from substantial poverty: 34.7% of India's poorest population (the population that lives on 3/4 of the poverty line or less) still subsist on less than US$1 a day; 79.9% live on US$2 per day. The National sample survey organisation (NSSO) estimated that 26.1% of the population was living below the poverty line in 1999–2000, down from 51.3% in 1977–1978. The criterion used was monthly consumption of goods below Rs. 211.30 for rural areas and Rs. 454.11 for urban areas. 75% of the poor are in rural areas (27.1% of the total rural population) with most of them comprising daily wagers, self-employed households and landless labourers. The major causes for poverty are unemployment or under-employment, low ownership of assets (especially productive assets like land and farm equipment) and illiteracy.

Causes of poverty

The main causes of poverty are illiteracy, a population growth rate by far exceeding the economic growth rate for the better part of the past 50 years, protectionist policies pursued since 1947 to 1991 which prevented large amounts of foreign investment in the country.

Illiteracy

More than 40 per cent of the population is illiterate, with rates of illiteracy particularly high among women, tribal groups and scheduled castes.

History of attempts to alleviate poverty

Looking back over the last 50 years or so, it can only be said that progress against poverty in India has been highly uneven over time and space. It took 20 years for the national poverty rate to fall below — and stay below — its value in the early 1950s. Trend rates of poverty reduction have differed appreciably between states.

The government has initiated, sustained, and refined many programs since independence to help the poor attain self sufficiency in food production. Probably the most important initiative has been the supply of basic commodities, particularly food at controlled prices, available throughout the country. The poor spend about 80 percent of their income on food while the rest of the population spends more than 60 percent.

Since the early 1950s, successive governments have implemented various planning schemes to alleviate poverty; these have met with partial success. The programmes have improved upon the strategies of the Food for work programme and National Rural Employment Programme of the 1980s, which attempted to use the unemployed to generate productive assets and build rural infrastructure.

Other antipoverty programs include the National Rural Employment Programme and the Rural Landless Employment Guarantee Programme. The National Rural Employment Programme evolved in FY 1980 from the earlier Food for Work Programme to use unemployed and underemployed workers to build productive community assets.

Rural Landless Employment Guarantee Programme

The Rural Landless Employment Guarantee Programme was instituted in FY 1983 to address the plight of the hard-core rural poor by expanding employment opportunities and building the rural infrastructure as a means of encouraging rapid economic growth. There were many problems with the implementation of these and otherschemes, but observers credit them with helping reduce poverty. To improve the effectiveness of the National Rural Employment Programme, in 1989 it was combined with the Rural Landless Employment Guarantee Programme and renamed Jawahar Rozgar Yojana, or Jawahar Employment Plan (see Development Programs, ch. 7).

Outlook for poverty alleviation

Eradication of poverty can only be a very long-term goal in India. Poverty alleviation is expected to make better progress in the next 50 years than in the past, as a trickle-down effect of the growing middle class. Increasing stress on education, reservation of seats in government jobs and the increasing empowerment of women and the economically weaker sections of society, are also expected to contribute to the alleviation of poverty. It would be incorrect to say that all poverty reduction programmes have failed. The growth of the middle class (which was virtually non-existent when India became a free nation in August 1947) indicates that economic prosperity has indeed been very impressive in India, but the distribution of wealth has been very uneven.

In August 2005, the Indian Parliament passed the Rural Employment Guarantee Bill, the largest programme of this type in terms of cost and coverage, which promises 100 days of minimum wage employment to every rural household, in 200 of India's 600 districts. Template:Inote The question of whether economic reforms have reduced poverty or not has fueled debates without generating any clearcut answers, and has also put political pressure on further economic reforms, especially those involving downsizing of labour and reduction of agricultural subsidies.

See also

Standard of living in India

External links

• http://www.indianchild.com/poverty_in_india.htm

Notes

1. ^ Cite error: The named reference survey was invoked but never defined (see the help page).
2. Mehta, Aasha (2002). "Chronic poverty in India: overview study". Chronic Poverty Research Centre. Retrieved 2006-07-24. {{cite web}}: Unknown parameter |coauthors= ignored (|author= suggested) (help)
3. ^ Datt, Ruddar & Sundharam, K.P.M. "22". Indian Economy. pp. 367, 369, 370.{{cite book}}: CS1 maint: multiple names: authors list (link)
4. "Jawahar gram samriddhi yojana". Retrieved July 9. {{cite web}}: Check date values in: |accessdate= (help); Unknown parameter |accessyear= ignored (|access-date= suggested) (help)

• Poverty by country
• Economy of India