Best Notes on Poverty and Its Types

In this post we are providing the Best Notes on Poverty and Its Types – absolute poverty – relative poverty – causes of poverty – define poverty line and its types.

poverty is a condition of lacking the necessary resources and basic necessities of life, such as food, shelter, clothing, and access to healthcare, education, and clean water. It is often characterized by a lack of income or financial resources to afford these basic needs, and can also include a lack of social and economic opportunities, such as employment, healthcare, and education. Poverty is a complex issue that can be caused by a range of factors, including economic policies, social inequality, and environmental degradation.

Types of Poverty

There are several types of poverty, including:

1. Absolute poverty: Absolute poverty is the most severe form of poverty and refers to a lack of access to the basic necessities of life, such as food, shelter, and clothing. It is typically measured by the number of people living below a certain income level, such as the poverty line.
2. Relative poverty: Relative poverty is a measure of poverty that takes into account the overall level of wealth and income in a particular society or community. People who are considered to be living in relative poverty have a lower standard of living than the average person in their society, but they may still have access to the basic necessities of life.
3. Rural poverty: Rural poverty refers to poverty that is concentrated in rural areas, where access to education, healthcare, and economic opportunities may be limited. Rural poverty can be caused by a range of factors, including lack of infrastructure, natural disasters, and environmental degradation.
4. Urban poverty: Urban poverty is poverty that is concentrated in urban areas, where access to affordable housing, education, and healthcare may be limited. Urban poverty can be caused by a range of factors, including lack of affordable housing, job loss, and economic inequality.
5. Multidimensional poverty: Multidimensional poverty takes into account a range of factors that contribute to poverty, including lack of access to education, healthcare, and basic services. This approach recognizes that poverty is a complex issue that cannot be reduced to a single factor, such as income or wealth.

Causes of poverty

Poverty is a complex issue with multiple causes that can vary from country to country and region to region. However, some of the common causes of poverty include:

1. Lack of education: Lack of education or access to quality education can limit individuals’ job opportunities and income potential, leading to poverty.
2. Unemployment: High unemployment rates and low-paying jobs can contribute to poverty, especially in areas with limited job opportunities.
3. Inadequate social safety nets: Lack of access to social safety nets, such as health care, education, and social assistance programs, can contribute to poverty.
4. Discrimination: Discrimination based on factors such as gender, race, ethnicity, and disability can limit individuals’ access to education, employment, and other opportunities, leading to poverty.
5. Natural disasters and conflicts: Natural disasters, conflicts, and other crises can cause loss of livelihoods, displacement, and economic instability, leading to poverty.
6. Economic policies: Economic policies that favor the wealthy and neglect the poor can contribute to poverty, such as regressive taxation, inadequate minimum wage policies, and lack of investment in social programs.

Poverty line and its types

The poverty line is a measure of income or consumption that is used to determine the minimum level of income or consumption required to meet basic needs and sustain a decent standard of living. The poverty line can vary between countries and regions, depending on factors such as the cost of living, social norms, and cultural expectations.

There are several types of poverty lines, including:

1. Absolute poverty line: This is the minimum level of income or consumption required to meet basic needs, such as food, shelter, and clothing. The absolute poverty line is usually fixed in real terms and does not vary with changes in income or consumption patterns over time.
2. Relative poverty line: This is the minimum level of income or consumption required to maintain a certain standard of living relative to the rest of society. The relative poverty line can vary over time and between countries, depending on changes in income distribution and societal expectations.
3. Multidimensional poverty line: This is a measure of poverty that takes into account multiple dimensions of well-being, such as health, education, and living standards, in addition to income or consumption.
4. Subjective poverty line: This is a measure of poverty that is based on individuals’ perceptions of their own economic situation, rather than objective measures of income or consumption.

Headcount Ratio

The headcount ratio is a measure of poverty that indicates the proportion of the population that lives below the poverty line. It is calculated by dividing the number of people living below the poverty line by the total population. The poverty line is usually defined as the income level below which people cannot afford the basic necessities of life, such as food, clothing, and shelter.

Poverty Gap (PG)

The poverty gap (PG) is a measure of poverty that takes into account not only the proportion of people living below the poverty line but also how far they are below it. The poverty gap is calculated by subtracting the average income of the poor, as a proportion of the poverty line, from the poverty line itself. The result is then multiplied by the number of people living below the poverty line. The poverty gap measures the extent of poverty in society by indicating how much additional income is needed to bring all the poor above the poverty line. A lower poverty gap indicates that the poor are closer to the poverty line and that less additional income is required to lift them out of poverty.

World Bank and Poverty Definitions

The World Bank defines poverty as the inability to attain a minimum standard of living. This minimum standard of living is typically measured in terms of income or consumption and is defined by the World Bank as the poverty line. The poverty line is the minimum level of income or consumption required to meet basic needs for food, shelter, clothing, and other essential goods and services. The World Bank uses two main poverty definitions: the absolute poverty line and the relative poverty line.

The absolute poverty line is a fixed minimum standard of living that is the same across all countries and regions. The current absolute poverty line used by the World Bank is $1.90 per day, which is the average of the national poverty lines of the poorest 15 countries in the world, adjusted for differences in purchasing power.

The relative poverty line, on the other hand, is a measure of poverty that is relative to the overall standard of living in a particular country or region. It takes into account the fact that what is considered poverty in one country may not be poverty in another, due to differences in living standards, social norms, and other factors. The relative poverty line is usually set at a certain percentage of the median income or consumption in a particular country or region.

Urban Poverty

Urban poverty refers to poverty that is concentrated in urban areas, where a large proportion of the population lives in slums or informal settlements and lacks access to basic services such as clean water, sanitation, and healthcare. Urban poverty is often associated with rapid urbanization, which can result in unequal distribution of resources, overcrowding, and limited opportunities for employment and income generation. Urban poverty is a complex and multifaceted issue that can have significant social, economic, and environmental impacts. It can lead to social exclusion, increased crime rates, and poor health outcomes, as well as hinder economic growth and development.

Socio Economic and Caste Census (SECC)

The Socio-Economic and Caste Census (SECC) is a census conducted in India to identify households living below the poverty line and to gather information on their socio-economic and caste status. The SECC aims to provide a more comprehensive and accurate picture of poverty in India, taking into account a range of social and economic indicators beyond just income. The SECC is conducted by the Ministry of Rural Development and is based on the inclusion and exclusion criteria developed by the Planning Commission. The census collects data on household characteristics such as occupation, education, landholdings, and housing conditions, as well as information on social categories such as scheduled castes and tribes, and other backward classes.

Eradication of Poverty

Eradication of poverty refers to the long-term goal of eliminating poverty and ensuring that everyone has access to basic necessities such as food, shelter, education, and healthcare. Eradicating poverty is a complex and multifaceted challenge that requires addressing a range of social, economic, and environmental factors. Efforts to eradicate poverty typically involve a combination of policy interventions, such as poverty reduction programs, social safety nets, and investments in education, healthcare, and infrastructure. These policies aim to improve the living standards of the poor and vulnerable sections of society and provide them with opportunities for economic and social advancement.

Multidimensional Poverty Index (MPI)

The Multidimensional Poverty Index (MPI) is a measure of poverty developed by the United Nations Development Programme (UNDP) that takes into account multiple dimensions of poverty beyond just income. The MPI uses a set of ten indicators to measure poverty in three dimensions: health, education, and standard of living. The indicators used in the MPI include nutrition, child mortality, years of schooling, school attendance, cooking fuel, sanitation, water, electricity, housing, and assets. The MPI assigns a score to each household based on the indicators, and households with scores below a certain threshold are considered multidimensionally poor.

UN Development Programme, Multidimensional Poverty Index, and India 2019

The United Nations Development Programme (UNDP) has been working closely with the Indian government to address poverty in the country. In 2019, India conducted its second Socio-Economic and Caste Census (SECC), which was used to calculate the Multidimensional Poverty Index (MPI) for India. The 2019 MPI for India showed that 271 million people in India (around 21% of the population) were living in multidimensional poverty, based on a set of ten indicators across three dimensions of poverty (health, education, and standard of living). This was a significant improvement from the previous MPI calculation in 2011, which had shown that 55% of the Indian population was living in multidimensional poverty.

Niti Aayog Task Force on Poverty Elimination

The Niti Aayog Task Force on Poverty Elimination is a group established by the Niti Aayog, a policy think-tank of the Indian government, to identify strategies and interventions to eliminate poverty in India. The task force is comprised of experts and stakeholders from various sectors, including academia, civil society, and government. The task force is responsible for developing a comprehensive poverty elimination strategy for India, which includes identifying the causes of poverty and developing interventions to address them.

The strategy is based on a multidimensional approach that takes into account the different factors that contribute to poverty, such as lack of access to education, healthcare, and basic services. The task force has also been tasked with identifying the most vulnerable populations and developing targeted interventions to address their specific needs. The task force works closely with state governments and other stakeholders to ensure that poverty elimination efforts are coordinated and effective.

Sustainable Development Goals (SDGs)

The Sustainable Development Goals (SDGs) are a set of 17 goals and 169 targets adopted by the United Nations General Assembly in 2015 as part of the 2030 Agenda for Sustainable Development. The SDGs aim to end poverty, protect the planet, and ensure peace and prosperity for all.

The 17 SDGs are:

1. No Poverty
2. Zero Hunger
3. Good Health and Well-being
4. Quality Education
5. Gender Equality
6. Clean Water and Sanitation
7. Affordable and Clean Energy
8. Decent Work and Economic Growth
9. Industry, Innovation, and Infrastructure
10. Reduced Inequalities
11. Sustainable Cities and Communities
12. Responsible Consumption and Production
13. Climate Action
14. Life Below Water
15. Life On Land
16. Peace, Justice, and Strong Institutions
17. Partnerships for the Goals

The SDGs are integrated and interconnected, recognizing that progress toward one goal can contribute to progress toward others. They are also universal, apply to all countries and all people, and are intended to be achieved by 2030.

Millennium Development Goals (MDGs)

The Millennium Development Goals (MDGs) were a set of eight international development goals established by the United Nations in 2000, with the target of achieving them by 2015. The MDGs were focused on reducing poverty, and improving health, education, and other indicators in developing countries.

The eight MDGs were:

1. Eradicate extreme poverty and hunger
2. Achieve universal primary education
3. Promote gender equality and empower women
4. Reduce child mortality
5. Improve maternal health
6. Combat HIV/AIDS, malaria, and other diseases
7. Ensure environmental sustainability
8. Develop a global partnership for the development

The MDGs were designed to be achievable, measurable, and time-bound, with specific targets and indicators to track progress. While significant progress was made toward achieving the MDGs, some targets were not fully met, particularly in the poorest and most vulnerable countries.

Similarities between MDGs and SDGs

The Millennium Development Goals (MDGs) and the Sustainable Development Goals (SDGs) share several similarities:

1. Both the MDGs and the SDGs are international development goals established by the United Nations with the aim of improving the lives of people around the world.
2. Both sets of goals are time-bound and measurable, with specific targets and indicators to track progress.
3. Both the MDGs and the SDGs are focused on ending poverty, improving health and education, and promoting sustainable development.
4. Both sets of goals are intended to be achieved through a collaborative effort between governments, civil society, the private sector, and other stakeholders.

Differences between MDGs and SDGs

The Millennium Development Goals (MDGs) and the Sustainable Development Goals (SDGs) share several differences:

1. The SDGs are more comprehensive and encompass a broader range of issues, including climate change, sustainable development, and gender equality, among others, while the MDGs were primarily focused on reducing poverty and improving health and education indicators.
2. The SDGs are applicable to all countries, not just developing ones, while the MDGs were primarily focused on developing countries.
3. The SDGs have a longer timeline, with a target date of 2030, while the MDGs had a target date of 2015.

Niti Aayog and SDGs

Niti Aayog, which stands for National Institution for Transforming India, is a policy think tank of the Government of India. It has been tasked with monitoring and implementing the Sustainable Development Goals (SDGs) in India. Niti Aayog has been involved in a number of activities related to SDGs, including developing a dashboard to track the progress of the SDGs in India, coordinating with state governments to implement the SDGs at the local level, and promoting partnerships with civil society organizations, private sector, and other stakeholders to achieve the SDGs.

Niti Aayog has also launched several initiatives and programs in line with the SDGs, such as the Aspirational Districts Program, which aims to improve the development indicators of the most backward districts in the country, and the Atal Innovation Mission, which promotes innovation and entrepreneurship among young people.

Universal Basic Income (UBI)

Universal Basic Income (UBI) is a concept in which all citizens of a country receive a regular, unconditional payment from the government, regardless of their income, wealth, or employment status. The payment is intended to cover basic living expenses, such as food, shelter, and clothing. The idea behind UBI is to provide a safety net for all citizens, ensuring that everyone has a minimum level of income to meet their basic needs, and to reduce poverty and inequality. UBI proponents argue that it could also help to promote social and economic mobility, as well as provide greater security and stability for individuals and families.

Basic Income in India

Basic Income or Universal Basic Income (UBI) is a concept that has been discussed in India as a potential solution to address poverty and inequality. In 2017, a pilot project was initiated in the Indian state of Madhya Pradesh, where 6,000 residents of two villages were provided with a basic income of Rs. 1,000 per month.

The results of the pilot were mixed, with some beneficiaries reporting positive outcomes, such as increased spending on education and health, while others did not experience significant changes. In 2019, the Indian Congress party included a promise to implement a minimum income guarantee scheme, which is similar to a UBI, in its election manifesto. The party did not win the election, and the proposed scheme was not implemented.

Non-Monetary Aspects of Poverty

Non-monetary aspects of poverty refer to dimensions of poverty beyond income and material deprivation. These can include social, cultural, and political factors that contribute to a person’s experience of poverty.

Some examples of non-monetary aspects of poverty include a lack of access to education, healthcare, and basic infrastructure, such as clean water and sanitation. Discrimination and social exclusion based on factors such as gender, race, caste, and ethnicity can also contribute to poverty. Other non-monetary factors that can impact poverty include political instability, conflict, and environmental degradation. These factors can exacerbate poverty and make it more difficult for individuals and communities to break the cycle of poverty.

Poverty is a Cognitive Tax

The concept of poverty as a cognitive tax suggests that living in poverty imposes a cognitive burden on individuals that can further perpetuate poverty. The idea is that living in poverty can consume a significant amount of mental energy, leaving individuals with fewer cognitive resources to devote to other areas of their lives, such as education or career advancement. Research has shown that living in poverty can lead to chronic stress, which can impair cognitive functioning and decision-making abilities. For example, individuals living in poverty may struggle with planning, problem-solving, and decision-making, which can make it difficult to escape poverty.

FAQs on Poverty