Poverty is one of the biggest problems in India. This essay highlights the causes, effects and offers solutions to fight poverty in India.

Poverty in India: Causes, Effects and Solutions

“Poverty is humiliation, the sense of being dependent on them, and of being forced to accept rudeness, insults, and indifference when we seek help.” —Latvia 1998

In the simplest term, poverty may be defined as a social condition where individuals do not have financial means to meet the most basic standards of life that is acceptable by the society. Individuals experiencing poverty do not have the means to pay for basic needs of daily life like food, clothes and shelter.

Poverty also staves people off from accessing much needed social tools of well-being like education and health requirements. The direct consequences stemming from this problem are hunger, malnutrition and susceptibility to diseases which have been identified as major problems across the world. It impacts individuals in a socio-psychological way with them not being able to afford simple recreational activities and getting progressively marginalized in the society.

The term poverty is interconnected with the notion of the poverty line/ threshold that may be defined as the minimum figure of income that is required in a particular country for maintaining the socially acceptable quality of life in terms of nutritional, clothing and sheltering needs. The World Bank has updated its international poverty line figures to 1.90 USD (Rs. 123.5) per day on October 2015 (based on prices of commodities in year 2011-2012), from 1.5 USD(Rs. 81) as a response to the changes in the cost of living across the world as per current economy. The organization estimates that – “Just over 900 million people globally lived under this line in 2012 (based on the latest available data), and we project that in 2015, just over 700 million are living in extreme poverty.”

Poverty is a worldwide cause of concern even in economically stable countries like the USA. Current statistics state that over half the populations in the world, about 3 billion people, are forced to live on less than 2.5 dollars per day. In India, as per 2014 government reports, monthly per capita consumption expenditure is Rs. 972 per person in rural areas and Rs. 1407 per person in urban areas. This data is currently being accepted as the poverty threshold of the country. As of 2015, 21.9% of the total population lives below the national poverty threshold, as per the data of Asian Development Bank, that’s a whopping 269.7 million individuals not having enough money.

Causes of Poverty in India

Factors contributing to the persistent problem of poverty in the country are many and they need to be identified in order to be addressed properly. They can be categorized under the following heads.

1. Demographic – the main factor that contributes to poverty-ridden state of the country from a demographical point of view is the problem of over population. The growth of population in the country has so far exceeded the growth in economy and the gross result is that the poverty figures have remained more or less consistent. In rural areas, size of the families is bigger and that translates into lowering the per capita income values and ultimately lowering of standard of living. Population growth spurt also leads to generation of unemployment and that means diluting out of wages for jobs further lowering income.

2. Economic –there are a host of economic reasons behind persistence of the poverty problems which are outlined hereunder:-

a. Poor Agricultural Infrastructure –Agriculture is the backbone of Indian economy. But outdated farming practices, lack of proper irrigation infrastructure and even lack of formal knowledge of crop handling has affected the productivity in this sector tremendously. As a consequence there is redundancy and sometimes complete lack of work leading to decreased wages that is insufficient for meeting daily needs of a labourer’s family plunging them into poverty.

b. Unequal distribution of assets – with the economy changing directions rapidly, the earning structure evolves differently in different economic income groups. Upper and middle income groups see a faster increase in earnings than lower income groups. Also assets like land, cattle as well as realty are distributed disproportionately among the population with certain people owning majority shares than other sectors of the society and their profits from these assets are also unequally distributed. In India it is said that 80% wealth in the country is controlled by just 20% of the population.

c. Unemployment – another major economic factor that is causative of poverty in the country is the rising unemployment rate. Unemployment rates is high in India and according to a 2015 survey data, at the all-India level, 77% of families do not have a regular source of income.

d. Inflation and Price hike – the term Inflation may be defined as an increase in prices of commodities coinciding with the fall in the purchasing value of money. As a direct consequence of inflation, effective price of food, clothing items as well as real estate rises. The salaries and wages do not rise as much in keeping up with the inflated prices of commodities leading to effective decrease of the per capita income.

e. Faulty economic liberalization – the LPG (Liberalization-Privatization-Globalization) attempts initiated by the Indian Government in 1991 were directed towards making the economy more suited to international market-trends to invite foreign investments. Successful to certain extent in reviving the economy, the economic reforms had detrimental effects on increasing the wealth distribution scenario. Rich became richer, while the poor remained poor.

3. Social – The various social issues plaguing the country that contributes towards poverty are:-

a. Education and illiteracy – Education, rather its lack thereof and poverty form a vicious cycle that plagues the nation. Not having enough resources to feed their children, the poor consider education to be frivolous, preferring children to start contributing to the family’s income rather than draining them. On the other hand, lack of education and illiteracy prevent individuals from getting better paying jobs and they get stuck at jobs offering minimum wages. Improvement of quality of life gets hindered and the cycle once again comes into action.

b. Outdated Social Customs – Social customs like the caste system cause segregation and marginalization of certain sections of the society. Certain castes are considered untouchables still and are not employed by upper caste, leaving very specific and low paying jobs that they can live off. Economist K. V. Verghese put forth the problem in a very lucid language, “Caste system acted as a spring­board for class exploitation with the result that the counterpart of the poverty of the many is the opulence of the few. The second is the cause of the first.”

c. Lack of skilled labour – lack of adequate vocational training makes the huge labour force available in India largely unskilled, which is unsuitable for offering maximum economic value. Lack of education, much less higher education, is also a contributing factor towards this.

d. Gender inequality–the weak status attached with women, deep-rooted social marginalization and long embedded perceptions of domesticity renders about 50% of the country’s population unable to work. As a result the women of the family add to the number of dependents that need to be fed instead of being able to contribute considerably in the family income which might assuage the poverty situation of the family.

e. Corruption – despite considerable efforts from the government in the forms of various schemes to mollify the poverty situation, allegedly only 30-35% actually reaches the beneficiaries due to wide-spread practices of corruption in the country. Wealthy people with privileged connection are able to acquire more wealth simply by bribing government officials to maximize their profits from such schemes while the poor remain in a state of neglect for not being able to assert such connections.

4. Individual – individual lack of efforts also contribute towards generating poverty. Some people are unwilling to work hard or even not willing to work altogether, leaving their families in the darkness of poverty. Personal demons like drinking and gambling also leads to draining of the family income inciting poverty.

5. Political – in India, socio-economic reform strategies has been largely directed by political interest and are implemented to serve a choice section of the society that is potentially a deciding factor in the elections. As a result, the issue is not addressed in its entirety leaving much scope of improvements.

6. Climatic – maximum portion of India experiences a tropical climate throughout the year that is not conducive to hard manual labour leading to lowering of productivity and the wages suffer consequently.

Effects of Poverty

The resounding effect of poverty echoes through various layers of an India citizen’s life. If we try to have a systematic look at them, we should proceed under the three following heads:-

1. Effect on Health – one of the most devastating effects that poverty has is on the overall health of the nation. The most prominent health issue stemming from poverty is malnutrition. The problem of malnutrition is widespread in all age-groups of the country but children are most adversely affected by this. Limited income in larger families leads to lack of access to sufficient nutritious food for their children. These children over time suffer from severe health problems like low body weight, mental, physical disabilities and a general poor state of immunity making them susceptible to diseases. Children from poor backgrounds are twice as susceptible to suffer from anemia, nutrient deficiencies, impaired vision, and even cardiac problems. Malnutrition is a gross contributor of infant mortality in the country and 38 out of every 1,000 babies born in India die before their first birthday. Malnutrition among adult also leads to poor health in adults that leaches their capacity for manual labour leading to a decrease in income due to weakness and diseases. Poverty also causes definite decline in the sanitary practices among poor who cannot afford proper bathrooms and disinfectants. As a result susceptibility to waterborne diseases peak among the poor. Lack of access to as well as means to procure appropriate treatment also affects overall mortality of the population which is lower in poor countries than developed nations like the USA.

2. Effects on Society – poverty exerts some gravely concerning effects over the overall societal health as well. These may be discussed along the following lines:-

a. Violence and crime rate – incidence of violence and crime have been found to be geographically coincident. In a backdrop of unemployment and marginalization, the poor resort to criminal activities to earn money. Coupled with lack of education and properly formed moral conscience, a poverty ridden society is more susceptible to violence by its people against its own people from a sense of deep-seated discontent and rage.

b. Homelessness – apart from a definite drop in the esthetic representation of the country, homelessness affects child health, women safety and overall increase in criminal tendencies.

c. Stress – lack of money is a major cause of stress among the middle-class and the poor and leads to decline in productivity of individuals.

d. Child labour – one of the hallmarks of a poverty-ridden society is the widespread practices of exploitation and the worst of it comes in the form of child labour. Large families fail to meet the monetary needs of the members and children as young as 5 years are made to start earning in order to contribute to the family income.

e. Terrorism – proclivity of youth towards terrorism stems from a combination of extreme poverty and lack of education making them susceptible to brainwashing. Terrorist organizations offer poverty-ridden families money in exchange for a member’s participation in their activities which induces a sense of accomplishment among the youth.

3. Effect on Economy –poverty is a direct index indicating success of the economy of the country. The number of people living under the poverty threshold indicates whether the economy is powerful enough to generate adequate jobs and amenities for its people. Schemes providing subsidies for the poor of the country again impose a drain on the economy.


The measures that should be taken to fight the demon of poverty in India are outlined below:-

1. Growth of population at the current rate should be checked by implementation of policies and awareness promoting birth control.

2. All efforts should be made to increase the employment opportunities in the country, either by inviting more foreign investments or by encouraging self-employment schemes.

3. Measures should be taken to bridge the immense gap that remains in distribution in wealth among different levels of the society.

4. Certain Indian states are more poverty stricken than others like Odhisha and the North East states. Government should seek to encourage investment in these states by offering special concessions on taxes.

5. Primary needs of people for attaining a satisfactory quality of life like food items, clean drinking water should be available more readily. Improvement of the Subsidy rates on commodities and Public Distribution system should be made. Free high school education and an increased number of functioning health centers should be provided by the government.