Introduction
Poverty represents the deprivation of basic human capabilities rather than merely an income or monetary shortfall, as conceptualized by Amartya Sen. While India has made immense strides in poverty reduction—bringing multidimensional poverty down to 11.28% and lifting 24.8 crore people out of poverty over nine years according to NITI Aayog (2024)—deep-seated structural challenges persist.
Causes of Poverty
Poverty in India is driven by a web of structural, economic, and institutional bottlenecks:
- Structural Health Shocks: High Out-of-Pocket Expenditure (OOPE), which constitutes 43.4% of total health spending according to the National Health Accounts (2022-23), routinely pushes vulnerable households back into poverty through catastrophic medical costs.
- Informal Economy and Skill Mismatch: With approximately 90% of the workforce concentrated in the unorganized sector without formal contracts or social safety nets, chronic income volatility and low wage growth remain pervasive.
- Agrarian Vulnerability: Extreme land fragmentation, climate risks, and recurrent environmental shocks—such as chronic droughts in Bundelkhand or recurrent floods in Eastern Uttar Pradesh—lead to systemic livelihood failures among small and marginal farmers.
- Intersecting Inequalities: Deep-seated social stratifications, caste-based exclusions, and historically low female labour force participation restrict household income generation and resource access.
Consequences of Poverty
The impact of poverty extends beyond immediate economic deprivations, creating self-reinforcing cycles across generations:
- Intergenerational Poverty Trap: Poverty results in chronic nutritional and health deprivations. According to NFHS-5, 35.5% of children under five suffer from stunting, causing irreversible cognitive deficits and locking future generations into low-skilled, low-productivity livelihoods.
- Spatial and Demographic Pressures: Chronic deprivation drives distress out-migration from rural regions, accelerating the ruralisation of urban poverty, expanding precarious informal settlements, and overstretching urban civic infrastructure.
- Socio-Psychological and Human Rights Erosion: Severe economic hardship induces social exclusion, erodes human dignity, and heightens household vulnerability to acute exploitation, including forced child labour and human trafficking.
Conclusion
Sustainably addressing poverty requires shifting focus from conventional consumption-expenditure metrics (such as the Tendulkar and Rangarajan poverty lines) to comprehensive capability enhancement. Converging protective healthcare safety nets like Ayushman Bharat (PM-JAY) with sustainable livelihood generation through Deendayal Antyodaya Yojana-NRLM and MGNREGA is vital to decisively achieve SDG 1 (No Poverty) and SDG 10 (Reduced Inequalities).