Introduction
According to NITI Aayog, India has made significant strides by lowering multidimensional poverty from 24.85% in 2015-16 to 14.96%, successfully lifting approximately 13.5 crore people out of poverty. Nevertheless, absolute and relative deprivation persist widely, sustained by structural economic impediments, social marginalisation, and vulnerability to shocks.
Major Causes of Poverty in India
Poverty in India is a multifaceted issue driven by interconnected economic, social, and environmental factors:
- Economic Structural Imbalances: There is a severe over-dependence on agriculture, which engages nearly 45% of the workforce while contributing only around 18% to GDP, resulting in chronic disguised unemployment. Furthermore, over 90% of the total labour force is concentrated in the informal economy, characterized by low productivity, stagnant wages, and absence of job security.
- Social Exclusion and Inequity: Entrenched caste-based discrimination and historically skewed land ownership perpetuate intergenerational poverty among marginalized groups. Additionally, low Female Labour Force Participation (standing at 37% as per PLFS 2023) depresses household income potential and slows inclusive growth.
- Environmental Vulnerabilities and Health Shocks: Recurrent climatic events such as droughts and floods disproportionately hit agrarian households. Catastrophic out-of-pocket health expenditures routinely push vulnerable rural and semi-urban families back into transient or chronic poverty.
- The Vicious Cycle of Poverty: Low household income leads to negligible savings and under-investment in health and education, which in turn leads to low human capital productivity and continues the cycle of depressed earnings.
Measures to Address Poverty
Tackling poverty demands moving beyond passive safety nets toward active asset generation and capacity building:
- Asset and Credit Creation: Broaden financial inclusion and self-employment opportunities through micro-credit interventions like PM MUDRA Yojana and PM SVANidhi for urban informal vendors, combined with effective land tenancy reforms.
- Wage Support and Social Security: Strengthen demand-driven rural wage employment through the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) and provide direct income stabilization to smallholders via PM-KISAN.
- Human Capital Development: Protect nutritional baselines through targeted food transfers under the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) and mitigate impoverishing healthcare costs via comprehensive coverage under Ayushman Bharat (PM-JAY).
- Skill Aggregation and Industrialization: Reorient skill training under the Pradhan Mantri Kaushal Vikas Yojana (PMKVY) to meet the technological demands of MSMEs, catalyzing labour-intensive manufacturing and facilitating structural transition out of low-yield agriculture.
Conclusion
Eradicating poverty sustainably requires a structural transition from redistributive welfare subsidies to capability-enhancing development. Addressing rural-urban consumption disparities, as highlighted in the Household Consumption Expenditure Survey 2022-23, will be essential for realizing the mandate of Sustainable Development Goal 1 (No Poverty).