Poverty and Financial Inclusions

Introduction

Poverty is a state or condition in which a person or community lacks the financial resources and
essentials for a minimum standard of living. Poverty means that the income level from employment
is so low that basic human needs can't be met.
According to World Bank, Poverty is pronounced deprivation in well-being, and comprises many
dimensions. It includes low incomes and the inability to acquire the basic goods and services
necessary for survival with dignity. Poverty also encompasses low levels of health and education,
poor access to clean water and sanitation, inadequate physical security, lack of voice, and
insufficient capacity and opportunity to better one's life.

In 2022, the total male population living in poverty in India was about 38 million. By contrast,the
number of females in poverty during the same time period was around 45 million.

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Latest on Causes of Poverty –

Pew Research Center, using World Bank data, has estimated that the number of poor in India
(with income of $2 per day or less in purchasing power parity) has more than doubled from 60
million to 134 million in just a year because of the pandemic-induced recession. This means India
is returned to a situation where it is called a “country of mass poverty” after 45 years.

1. Rapidly Rising Population: India’s population has steadily increased through the years.
During the past 45 years, it has risen at a rate of 2.2% per year, which means, on average,
about 17 million people are added to the country’s population each year. This also
increasesthe demand for consumption goods tremendously.
2. Low Productivity in Agriculture: A major reason for poverty is low productivity in the
agriculture sector. The reason for low productivity is manifold. Chiefly, it is because of
fragmented and subdivided landholdings, lack of capital, illiteracy about new technologies
in farming, the use of traditional methods of cultivation, wastage during storage, etc. Read,
Agriculture Product Market Committee – APMC for relevant details.
3. Underutilized Resources: There is underemployment and disguised unemployment in the
country, particularly in the farming sector. This has resulted in low agricultural output and
also led to a dip in the standard of living.
4. Low Rate of Economic Development: Economic development has been low in India. Thereis
a gap between the requirement and the availability of goods and services.
5. Price Rise: Price rise has been steady in the country and this has added to the burden the
poor carry. Although a few people have benefited from this, the lower-income groups have
suffered because of it, and are not even able to satisfy their basic minimum wants.
6. Unemployment: Unemployment is another factor causing poverty in India. The ever-
increasing population has led to a higher number of job-seekers. However, there is not
enough expansion in opportunities to match this demand for employment.
7. Shortage of Capital and Able Entrepreneurship: The shortage of capital and
entrepreneurship is making it harder to increase production.
8. Social Factors: Apart from economic and commercial, there are also social factors hindering
the eradication of poverty in India. Some of the hindrances in this regard are the laws of
inheritance, caste system, certain traditions, etc. Read about vulnerability due to caste on
the linked page.
9. Political Factors: The British colonization and rule over India for about two centuries have
caused damaging harm to the nature of India’s economy. India, which was once a chief
producer, has been reduced to a big market. Much of the natural resources of the country
were used to benefit British coffers and a lot of wealth was siphoned off to the homeland of
the rulers. They also reduced many classes of people such as farmers, artisans, potters,
weavers, etc. to their current state of poverty.

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Types of poverty

Basically, poverty can be divided into two types: Absolute Poverty and Relative Poverty.

Absolute Poverty:

 Absolute poverty refers to a condition where a person does not have the minimum amount
of income needed to meet the minimum requirements for one or more basic living needs
over an extended period of time.
 The basic needs include food and safe drinking water, shelter, clothing, sanitation facilities,
quality and affordable healthcare and education facilities, access to information.
 This minimum amount of income that is needed to fulfil the basic needs is decided upon by
each country by taking into account various factors. We shall understand this clearly when we are
discussing about the Poverty Line in India.

Relative Poverty:

 Relative poverty is closely associated with the issues of inequality.

 Relative poverty occurs when people in a country do not enjoy a certain minimum level of
living standards as compared to the rest of the population and so would vary from country to
country, sometimes within the same country. Gini coefficient can be used to measure poverty in the
relative sense.

Gini coefficient:

The Gini-coefficient measures the inequality among values of a frequency distribution (for
example, levels of income). This is the most commonly used measure of inequality. The coefficient
varies between 0, which reflects complete equality and 1, which indicates complete inequality
(one person has all the income or consumption and all others have none).

DIFFERENCE BETWEEN ABSOLUTE AND RELATIVE PVERTY:

ABSOLUTE POVERTY: This kind of poverty focusses on the basic needs of an individual. The income
level is highly considered in absolute poverty. Absolute poverty can change but relative poverty
cannot.

RELATIVE POVERTY:

 This kind of poverty does not talk about the basic needs and in fact it does not refer to
thelack of any specific need.
 It is important to highlight that one can be meeting his or her biological needs but still
be considered as poor under relative poverty measurement.
 The income level is not considered in this type.

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  People who have a considerable amount of income can meet their basic needs,
which include food, shelter, and clothing and can even go further to fund their
entertainment.
 However, one may be accomplishing these factors but still be considered poor under
the relative poverty model.
 A government may put measures to ensure that all its population can earn more than a
certain level of income per day, which will enable them to meet basic commodities like
food, clothing, and shelter. However, it is very difficult for the government to alleviate all
persons above relative poverty. This means that some people will always be poor as
compared to the rich people.

OTHER TYPES OF POVERTY:

Situational Poverty:
People or families can be poor because of some adversities like earthquakes, floods or a serious
illness. Sometimes, people can help themselves out of this situation quickly if they are given a bitof
assistance, as the cause of their situations was just one unfortunate event.

Generational Poverty:
This is when poverty is handed over to individuals and families from generations before them. In
this type, there is usually no escape from it, as people are trapped in its causes and have no access
to tools that will help them get out of it.

Multidimensional Poverty:

 Multidimensional poverty is made up of several factors that constitute poor people’s

experience of deprivation– such as poor health, lack of education, inadequate living
standard, lack of income (as one of several factors considered), disempowerment, poor
quality of work and threat from violence.
 A multidimensional measure can incorporate a range of indicators to capture the
complexity of poverty and better inform policies to relieve it. Different indicators can be
chosen appropriate tothe society and situation.
 Multi-dimensional Poverty Index gives us a measure of the extent of multi-dimensional poverty
prevailing in various countries.

Measuring Poverty
Conventionally, poverty is measured by defining a threshold level of expenditure (or income)
required to purchase goods and services necessary to satisfy basic needs at the minimal socially
acceptable level. This threshold level of expenditure is called the poverty line and the proportion of
population living below it is called the poverty ratio.

Identification of poor in India:

In India, identification of poor is done by the State Governments based on information from Below
Poverty Line (BPL) censuses of which the latest is the Socio- Economic Caste Census 2011 (SECC
2011).

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Committees for Poverty Estimation in India:

National Planning Committee:

 In 1938, Congress president Subhash Chandra Bose set up the National Planning Committee
(NPC) with Jawaharlal Nehru as chairman and Professor K. T. Shah as secretary for the
purpose of drawing up an economic plan with the fundamental aim to ensure an adequate
standard of livingfor the masses.
 The Committee regarded the irreducible minimum income between Rs. 15 to Rs. 25 per capita
per month at Pre-war prices. However, this was also not tagged something as a poverty line of
thecountry.

 Poverty estimation in India is carried out by NITI Aayog’s task force through the
calculation of poverty line based on the data captured by the National Sample Survey
Office under the Ministry of Statistics and Programme Implementation (MOSPI).
 Poverty line estimation in India is based on the consumption expenditure and not on the
income levels.
 Poverty is measured based on consumer expenditure surveys of the National Sample Survey
Organisation. A poor household is defined as one with an expenditure level below a specific
poverty line.
 The incidence of poverty is measured by the poverty ratio, which is the ratio of the number
of poor to the total population expressed as a percentage. It is also known as head-count
ratio.

First Planning Commission working group:

 The concept of the poverty line was first introduced by a working group of the Planning
Commission in 1962 and subsequently expanded in 1979 by a task force.
 The 1962 working group recommended that the national minimum for each household of
five persons should be not less than Rs 100 per month for rural and Rs. 125 for urban at
1960-61 prices.
 These estimates excluded the expenditure on health and education, which both were
expectedto be provided by the state.

Y K Alagh Committee (1979):

 Till 1979, the approach to estimate poverty was traditional i.e. lack of income.
 It was later decided to measure poverty precisely as starvation i.e. in terms of how much
peopleeat.
 This approach was first of all adopted by the YK Alagh Committee’s recommendation in 1979
whereby, the people consuming less than 2100 calories in the urban areas or less than 2400
caloriesin the rural areas are poor.
 Now these calorie requirements need some ‘monetary value’ which can be determined by
ascertaining ‘quantity’ of consumption and ‘prices/value’ of that quantity. Data relating to quantity and
value was provided by NSSO survey.
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  It was estimated that, on an average, consumer expenditure (food and non-food) of Rs.49.09
per capita per month was associated with a calorie intake of 2400 per capita per day in rural
areas and Rs.56.64 per capita per month with a calorie intake of 2100 per day in urban areas.
This ‘Monthly Per Capita Expenditure’ was termed as poverty line.
 The logic behind the discrimination between rural and urban areas was that the rural people
do more physical work.
 Moreover, an implicit assumption was that the states would take care of the health and
educationof the people. Thus, YK Alagh eventually defined the first poverty line in India.

NOTE: ABOUT NSSO

 The National Sample Survey Office (NSSO) is headed by a Director General and comes under
the National Statistical Office of the Ministry of Statistics and Programme Implementation.
 It is responsible for conduct of large scale sample surveys in diverse fields on All India basis.
 Primarily data are collected through nation-wide household surveys on various socio-
economicsubjects, Annual Survey of Industries (ASI), etc.
 Besides these surveys, NSSO collects data on rural and urban prices and plays a significant
role in the improvement of crop statistics through supervision of the area enumeration and
crop estimation surveys of the State agencies.
 It also maintains a frame of urban area units for use in sample surveys in urban areas.

Lakdawala Committee (1993):

In 1993, an expert group was constituted to review methodology for poverty estimation, chaired by
DT Lakdawala. The following were the suggestions made:
 Consumption expenditure should be calculated based on calorie consumption as used by
theAlagh Committee.
 State specific poverty lines should be constructed, and these should be updated using the
Consumer Price Index of Industrial Workers (CPI-IW) in urban areas and Consumer Price
Index ofAgricultural Labour (CPI-AL) in rural areas.
 The method of calculating poverty included first estimating the per capita household
expenditure at which the average energy norm is met, and then, with that expenditure as
the poverty line, defining as poor as all persons who live in households with per capital
expenditures below the estimated value.
 The fallout of the Lakdawala formula was that number of people below the poverty line got
almost double. The number of people below the poverty line was 16 per cent of the
population in1993-94. Under the Lakdawala calculation, it became 36.3 per cent.

Tendulkar Committee (2005):

Shortcomings of the previous methods:

1. Consumption patterns were linked to the 1973-74 poverty line baskets (PLBs) of goods and
services, whereas there were significant changes in the consumption patterns of the poor
sincethat time, which were not reflected in the poverty estimates.
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 2. There were issues with the adjustment of prices for inflation, both spatially (across regions)
andtemporally (across time).
3. Earlier poverty lines assumed that health and education would be provided by the State and
formulated poverty lines accordingly.

The major changes recommended are:

 It adopted Mixed Reference Period in place of Uniform Reference Period. During previous
methodologies, a ‘uniform reference period’ was used that included 30 days just before the
survey for all food and nonfood items. But Tendulkar group changed ‘reference period’ to past
one year for 5 nonfood items viz., clothing, footwear, durable goods, education and
institutional medical expenses. For other items 30 days reference period was retained. This is
called ‘Mixed referenceperiod’.
 A shift away from calorie consumption-based poverty estimation.
 A uniform poverty line basket (PLB) across rural and urban India.
 A change in the price adjustment procedure to correct spatial and temporal issues with price
adjustment.
 Incorporation of private expenditure on health and education while estimating poverty.
 Poverty line was in form of Rs per capita per month’.
 The Committee computed new poverty lines for rural and urban areas of each state.

Rangarajan Committee:

C Rangarajan Committee was Set up By Planning commission in 2012 and submitted report in2014.

Important points from the report are:

 The Rangarajan committee estimation is based on an independent large survey of

households byCenter for Monitoring Indian Economy (CMIE).

 It has also used different methodology wherein a household is considered poor if it is unable
to save.

 Instead of ‘Mixed reference Period’ it recommended ‘Modified Mixed reference period’ in

which reference periods for different items were taken as : 365-days for clothing, footwear,
education, institutional medical care, and durable goods, 7-days for edible oil, egg, fish and
meat, vegetables, fruits, spices, beverages, refreshments, processed food, pan, tobacco and
intoxicants, and 30-days for the remaining food items, fuel and light, miscellaneous goods
and services including non- institutional medical; rents and taxes.

 It not only takes normative levels (Normative means–what is ideal and desirable) for
adequate nourishment, clothing, house rent, conveyance and education, but also considers
behaviorally - determined (Behavioral Means–What people use or consume as per general
behavior) levels of other non- food expenses.

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  The committee has estimated that almost 30 per cent of us were poor in 2011-12. It uses
separate data sets for rural and urban parts.

 The panel computed the average requirements of calories, proteins and fats on the norms
set by the Indian Council for Medical Research in 2010. These are differentiated by age,
gender and activity for all-India rural and urban regions.

 Accordingly, the energy requirement as calculated by Rangarajan is 2,155 kcal per person
per day in rural areas and 2,090 kcal per person per day in urban areas. This is significantly
lower than the 2,400 kcal in rural areas and slightly less than 2,100 kcal in urban areas used
by the earlier Lakdawala panel.

 The reason given is that the age profile and working conditions have changed with time.

 The protein and fat requirements have been estimated on the same lines. These are 48g
and 28gper capita per day, respectively, in rural India and 50g and 26g per capita per day in
urban areas.

 According to the report of the committee, the new poverty line should be Rs 32 in rural
areasand Rs 47 in urban areas.

In broad sense a state of unemployment appears when a labour does not obtain employment
opportunity despite has willingness to work on existing wage rate. India is a developing economy
where the nature of unemployment is entirely different from that of developednations.

Lord J.M. Keynes diagnosed unemployment in developed economies to be the result of a

deficiency in effective demand. It implied that in such demand for labour falls because the demand
for the products of industry is no longer there. According to Keynes such unemployment can be
removed form the economy by increasing effective demand which in turn will increase labour
demand to give motion to the machines in the economy.

Contrary to it developing economies like India face the unemployment situation, which arises dueto
different reasons. The labour force in India is rapidly increasing due to high rate of population
growth.

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Poverty Trap

Poverty trap is a spiraling mechanism which forces people to remain poor. It is so binding in itself
that it doesn't allow the poor people to escape it. Poverty trap generally happens in developing and
under-developing countries, and is caused by a lack of capital and credit to people.

Different Types of Unemployment in India

Structural Unemployment
This type of unemployment is associated with economic structure of the country. When demand
for labor falls short to the supply of labor due to rapidly growing population and their immobility,
the problem of unemployment appears in the economy. Besides, due to growing population, rate
of capital formation falls down which again limits the employment opportunities. This type of
structural unemployment is of long run nature. Indian unemployment is basically related to this
category of unemployment.

Under Employment
Those laborers are under employed who obtain work but their efficiency and capability are not
utilized at their optimum and as a result they contribute in the production up to a limited level. A
country having this type of unemployment fails to exploit the efficiencies of their laborers.

Disguised Unemployment
If a person does not contribute anything in the production process or in other words, if he can be
removed from the work without affecting the productivity adversely, he will be treated as
disguisedly unemployed. The marginal productivity of such unemployed person is zero.
Agriculture sector of underdeveloped/developing economies possesses this type of unemployment
on a large scale.

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Frictional Unemployment
The unemployment generated due to change in market conditions (change in demand and supply)
is called frictional unemployment. Agriculture is the main occupation in India. The supply
conditions still depend on weather’s mood and similarly demand conditions depend on availability
of resources. Any change arising either of any or both creates a diversion from the equilibrium
which results in frictional unemployment.

Seasonal Unemployment
Seasonal unemployment appears due to a change in demand based on seasonal variations.
Laborers do not get work round the year. They get employment in the peak season of agricultural
activities and become unemployed when these activities are over. Indian agriculture ensures
employment for only 7-8 months and laborers remain unemployed in remaining period. This
temporary type of employment gives birth to seasonal unemployment.

Government intervention
The government has actively alleviated Poverty in recent times. As a result, about 271 million
people were lifted out of Poverty in India in a decade (2005-15). The Multi-Dimensional Poverty
Index released by Oxford Institute and the United Nations Development Program (UNDP)
acknowledges this. However, many individuals are still living a life in Poverty
Here are some of the government schemes that have helped the people:
1. National Mission on Foundational literacy and numeracy
2. Ayushman Bharat Scheme
3. Skill India Mission
4. PM Awaas Yojana
5. MGNREGA

Policy recommendations on reducing Poverty:

Universal Basic Income (UBI):

UBI, also known as citizen’s income, guaranteed minimum income, or basic income, is a
government-guaranteed payment that each citizen gets. The UBI payment is based on the core
premise of providing enough to cover the necessary critical significance. The agricultural cost of
living gives financial stability to all citizens, regardless of their birth circumstances
Because of the possibility of job losses caused by automation, the concept of a universal basic
income has gained traction in the West
According to the Economic Survey 2016-17, universal basic income should be used to replace all
present cash handouts. According to the survey, UBI should be used to replace existing social
assistance and anti-poverty programmes such as MGNREGA, PMJSY, and others
According to the survey, a working JAM (Jan Dhan, Aadhar, and Mobile) system is one of the two
criteria for a successful UBI. It guarantees that the cash transfer is sent directly to the beneficiary’s
account and that the program’s cost-sharing is negotiated between the Centre and the States.

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Poverty Alleviation Programs in India

 Integrated Rural Development Programme (IRDP): It was introduced in 1978-79 and

universalized from 2nd October, 1980, aimed at providing assistance to the rural poor in the
form of subsidy and bank credit for productive employment opportunities through
successive plan periods.

 Jawahar Rozgar Yojana/Jawahar Gram Samridhi 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.

 Rural Housing – Indira Awaas Yojana: The Indira Awaas Yojana (LAY) programme aims at
providing free housing to Below Poverty Line (BPL) families in rural areas and main targets
would be the households of SC/STs.

 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.

 National Old Age Pension Scheme (NOAPS): This pension is given by the central
government. The job of implementation of this scheme in states and union territories is
given to panchayats and municipalities. The states contribution may vary depending on the
state.
The amount of old age pension is ₹200 per month for applicants aged 60–79. For applicants
aged above 80 years, the amount has been revised to ₹500 a month according to the 2011–
2012 Budget. It is a successful venture.

 Annapurna Scheme: 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), and who have no one to take care of them in their
village. This scheme would provide 10 kg of free food grains a month for the eligible senior
citizens. They mostly target groups of ‘poorest of the poor’ and ‘indigent senior citizens’.

 Sampoorna Gramin Rozgar Yojana (SGRY): The main objective of the scheme continues to
be the generation of wage employment, creation of durable economic infrastructure in
rural areas and provision of food and nutrition security for the poor.

 Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) 2005: The Act
provides 100 days assured employment every year to every rural household. One-third of
the proposed jobs would be reserved for women. The central government will also establish
National Employment Guarantee Funds. Similarly, state governments will establish State
Employment Guarantee Funds for implementation of the scheme. Under the programme, if
an applicant is not provided employment within 15 days s/he will be entitled to a daily
unemployment allowance.

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  National Rural Livelihood Mission: Aajeevika (2011): It evolves out the need to diversifythe
needs of the rural poor and provide them jobs with regular income on a monthly basis. 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 fresh entrant to the labour market,
especially labour market and class X and XII dropouts.

 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.

Multidimensional Poverty Index (MDP)

To tackle the drawbacks associated with the poverty line, UNDP, in association with Oxford Poverty
and Human Development Initiative (OPHI), has developed the Multidimensional Poverty Index
(MDP) for the 107 developing countries. MDP uses Health, Education and Standard of Living
indicators to determine the incidence and intensity of Poverty experienced by a population
Dimensions (Indicators)

 Health (Child Mortality, Nutrition)

 Education (Years of Schooling, School Attendance)
 Standard of living (Cooking Fuel Sanitation, Drinking Water, Electricity, Housing Assets)
Each indicator is given a specific weight. A person is multidimensional poor if they are
deprived of one-third or more (33% minimum) of the arrows

MPI 2022 was released in October 2022. India ranked 62 in the Global MPI 2020 which ranked107
countries. With an estimated 23 crores of people living in multidimensional poverty, India ranks
first in the Multidimensional Poverty Index 2022. India has by far the largest number of poor
people worldwide at 22.8 crores, followed by Nigeria at 9.6 crores.

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 List of Poverty Alleviation Programmers in India
(Schemes)

Name of the Scheme/ Year of Government Objectives

Programme Formation Ministry

Integrated Rural 1978 Ministry of Rural  To raise the families of identified

Development Development target groups living below the poverty
Programme (IRDP) line through the development of
sustainable opportunities for self-
employment in the rural sector.

Pradhan Mantri Gramin 1985 Ministry of Rural  To create housing units for everyone
Awaas Yojana Development along with providing 13 lakhs
housing units to the rural areas.
 To provide loans at subsidized rates
to the people.
 To augment wage employment
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 opportunities to the households by
providing employment on- demand
and through specific guaranteed
wage employment every year.

Indira Gandhi National 15th August Ministry of Rural  To provide pension to the senior
Old Age Pension Scheme 1995 Development citizens of India of 65 years or higher
(NOAPS) and living below the poverty line.
 It provides a monthly pension of
Rs.200 for those aged between 60-79
years and Rs.500 for the people aged
above 80 years.

National Family Benefit August 1995 Ministry of Rural  To provide a sum of Rs.20,000 to the
Scheme (NFBS) Development beneficiary who will be the next head
of the family after the death of its
primary breadwinner.

Jawahar Gram Samridhi 1st April 1999 Implemented by  Developing the infrastructure of the
Yojana (JGSY) the Village rural areas which included connecting
Panchayats. roads, schools, and hospitals.
 To provide sustained wage
employment to the families belonging
to the below poverty line.
Annapurna 1999-2000 Ministry of Rural  To provide 10 kg of free food grains
Development to the eligible senior citizens who are
not registered under the National
Old Age Pension Scheme.

Food for Work 2000s Ministry of Rural  It aims at enhancing food security
Programme Development 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

Sampoorna Gramin – –  The main objective of the scheme

Rozgar Yojana (SGRY) continues to be the generation of
wage employment, creation of
durable economic infrastructure in
rural areas and provision of food and
nutrition security for the poor.

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Mahatma Gandhi 2005 Ministry of Rural  The Act provides 100 days assured
National Rural Development employment every year to every rural
Employment Guarantee household. One- third of the proposed
Act (MGNREGA) jobs would be reserved for women.
The central government will also
establish National Employment
Guarantee Funds.
 Similarly, state governments will
establish State Employment
Guarantee Funds for implementation
of the scheme. Under the programme,
if an applicant is not provided
employment within 15 days s/he will
be entitled to a daily unemployment
allowance.

National Food Security 2007 Ministry of  To increase production of rice,

Mission Agriculture wheat, pulses and coarse cereals
through area expansion and
productivity enhancement in a
sustainable manner in the identified
districts of the country
National Rural Livelihood 2011 Ministry of Rural  It evolves out the need to diversify
Mission Development the needs of the rural poor and
provide them jobs with regular
income on a monthly basis. Self Help
groups are formed at the village level
to help the needy
National Urban Livelihood 2013 Ministry of  It focuses on organizing urban poor in
Mission Housing and Self Help Groups, creating
Urban Affairs 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 Jan Dhan 2014 Ministry of  It aimed at direct benefit transfer of
Yojana Finance subsidy, pension, insurance etc. and
attained the target of opening 1.5
crore bank accounts. The scheme
particularly targets the unbanked poor

Pradhan Mantri Kaushal 2015 Ministry of Skill  It will focus on fresh entrant to the
Vikas Yojana Development and labour market, especially labour
Entrepreneurship market and class X and XII dropouts

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Saansad Aadarsh Gram 2014 Ministry of Rural  To develop the institutional and
Yojana (SAGY) development physical infrastructure in three
villages by 2019. The scheme aims to
develop five ‘Adarsh Villages’ or
‘Model Villages’ by 2024.

Pradhan Mantri Jeevan 2015 Ministry of  The scheme provides life coverage
Jyoti Bima Yojana Finance to the poor and low- income section
of the society. The scheme offers a
maximum assured amount of Rs.2
lakhs

Pradhan Mantri Suraksha 2015 Ministry of  The scheme is an insurance policy to

Bima Yojana Finance the people belonging to the
underprivileged sections of the
society

National Maternity 2016 Ministry of Health  To provide a sum of Rs.6000 to a

Benefit Scheme & Family Welfare pregnant mother who is aged above
(MoHFW) 19 years.
 The sum is provided normally 12–8
weeks before the birth in three
instalments and can also be availed
even after the death of the child.

Pradhan Mantri Ujjwala 2016 Ministry of  It envisages the distribution of 50

Yojana (PMUY) Petroleum and million LPG connections to women
Natural Gas below the poverty line

Pradhan Mantri Garib 2016 Ministry of  The scheme provides an opportunity

Kalyan Yojana (PMGKY) Finance to declare unaccounted wealth and
black money in a confidential
manner and avoid prosecution after
paying a fine of 50% on the
undisclosed income. An additional
25% of the undisclosed income is
invested in the scheme which can be
refunded after four years, without
any interest.

Solar Charkha Mission 2018 Ministry of Micro,  It aims at Employment generation

Small and for nearly one lakh people through
Medium solar charkha clusters in rural areas
Enterprises
(MSME)

Prepared by: CA Raman Luthra

 National Nutrition 2018 Ministry of  to reduce the level of under-
Mission (NNM), Poshan Women and Child nutrition and also enhance the
Abhiyan Development nutritional status of children in the
country. Also, to improve the
nutritional outcomes of adolescents,
children, pregnant women and
lactating mothers

Pradhan Mantri Shram 2019 Ministry of  It is a central government scheme

Yogi Maan-Dhan (PM- Labour and that is introduced for old age
SYM) Employment protection and social security of
Unorganised Workers (UW)

Prime Minister Street 2020 Ministry of  It aims to provide micro-credit

Vendor’s AtmaNirbhar Housing and facilities to street vendors affected
Nidhi – PM SVanidhi Urban Affairs due to COVID-19 pandemic.
(MoHUA)

Role of Public Distribution System in Poverty Alleviation

The Public Distribution System (PDS) which evolved as a system of management for food and
distribution of food grains plays a major role in poverty alleviation. This programme is operated
jointly by the Central Government and the State Government of India. The responsibilities
include:

 Allocations of commodities such as rice, wheat, kerosene, and sugar to the States
andUnion Territories.
 Issue of Ration Cards for the people below the poverty line.
 Identification of families living below the poverty line.
 Management of food scarcity and distribution of food grains.

PDS was later relaunched as Targeted Public Distribution System (TPDS) in June 1997 and is
controlled by the Ministry of Consumer Affairs, Government of India. TPDS plays a major role in
the implementation and identification of the poor for proper arrangement and delivery of food
grains. Therefore, the Targeted Public Distribution System (TPDS) under the Government of India
plays the same role as the PDS but adds a special focus on the people below the poverty line.

Why is employment generation important in poverty alleviation in India?

The unemployment issue in India is considered as one of the major causes of poverty in India. The
poverty rate of a country can be reduced with high economic growth and by reducing the
unemployment problem. Various poverty alleviation programmes are set up under the
Government of India that aims to eradicate poverty by providing employment on-demand and
through specific guaranteed wage employment every year to the households living below the
poverty line.

Prepared by: CA Raman Luthra

The generation of employment is important in poverty alleviation because of the following
reasons:

 It will increase the income level of the poor household families and will help in reducing the
rate of poverty in the country. Hence, there is a significant relationship between
unemployment and poverty.
 It will decrease the rural-urban migration through the generation of employment programs
inrural areas.
 An increase in the income level through the generation of employment programs will help
the poor in accessing basic facilities including education, health facilities, and sanitation.

What are the reasons for the ineffectiveness of poverty alleviationprograms?

The major reasons for the ineffectiveness of the poverty alleviation programs are mentioned
below:

 The poverty alleviation program may not properly identify and target the exact number of
poor families in rural areas. As a result, some of the families who are not registered under
these programs are benefited by the facilities rather than the eligible ones
 Overlapping of similar government schemes is a major cause of ineffectiveness as it leads to
confusion among poor people and authorities and the benefits of the scheme do not reach
thepoor.
 Overpopulation of the country increases the burden of providing the benefits of the
schemesto a large number of people and thus reduces the effectiveness of the programs.
 Corruption at various levels of implementation of schemes is another major reason.

Conclusion:

The social clusters are most susceptible to poverty, and they are categorized as SC and ST in the
economic clusters, the most susceptible are the agricultural labor in rural parts and the casual
labor in the urban parts. The challenges lie ahead such as the rural and the urban parts showing
vast differences in poverty.

It is true that poverty has been reduced but not up to the intended level. As a citizen or as a
government, still we have to focus on the food chain, clothing, population control, free education
at the basic level, empowerment of women and fiscally weaker sections of society, medical
facilities, etc. for better results.

Prepared by: CA Raman Luthra