Model Answer
0 min readIntroduction
Poverty, defined as a state where an individual lacks the financial resources and essential necessities to enjoy a minimum standard of living, has been a persistent challenge in India. While successive governments have implemented various poverty alleviation programs, assessing the overall reduction in poverty levels requires careful consideration of diverse estimates and regional variations. Recent data suggests a decline in poverty rates nationally, but the pace and nature of this reduction differ significantly between urban and rural India, necessitating a critical examination of the available indicators. The Economic Survey 2022-23 indicated that extreme poverty has declined to 2.2% in 2023.
Rural Poverty Reduction
Historically, rural India has borne the brunt of poverty. However, several factors have contributed to its reduction.
- Agricultural Growth: The Green Revolution (1960s-70s) and subsequent agricultural policies boosted food production and rural incomes, though benefits were unevenly distributed.
- MGNREGA (2005): The Mahatma Gandhi National Rural Employment Guarantee Act provided a safety net by guaranteeing 100 days of wage employment to rural households, significantly reducing distress migration and increasing rural purchasing power.
- Increased Access to Services: Improved access to education, healthcare, and financial inclusion through initiatives like the National Rural Health Mission (2005) and Jan Dhan Yojana (2014) have contributed to human capital development and poverty reduction.
- NSSO Data: National Sample Survey Office (NSSO) data shows a decline in the rural poverty ratio from 33.3% in 2009-10 to 15.3% in 2011-12 and further to 11.5% in 2019-21 (as per the Periodic Labour Force Survey).
Urban Poverty Reduction
Urban poverty, while lower in absolute numbers, presents unique challenges. Reduction in urban poverty has been driven by:
- Economic Liberalization: The economic reforms of 1991 led to increased economic activity and employment opportunities in urban areas, particularly in the service sector.
- Urban Employment Programs: Schemes like the National Urban Livelihoods Mission (NULM) aim to provide skill development and employment opportunities to urban poor.
- Migration & Remittances: Rural-urban migration, coupled with remittances sent by migrants, has contributed to increased household incomes in both rural and urban areas.
- NSSO Data: The NSSO data indicates a decline in the urban poverty ratio from 20.9% in 2009-10 to 13.7% in 2011-12 and further to 8.3% in 2019-21.
Critical Examination & Discrepancies
Despite the overall decline, several caveats exist:
- Data Limitations: Poverty estimates are subject to methodological debates and revisions. Different poverty lines and consumption baskets can yield varying results.
- MPI vs. Consumption-Based Poverty: The Multidimensional Poverty Index (MPI), which considers health, education, and standard of living, paints a different picture than consumption-based poverty measures. MPI data suggests that while headcount poverty has declined, deprivation in multiple dimensions remains significant.
- Rising Inequality: While poverty rates may be falling, income inequality is increasing, meaning the benefits of growth are not evenly distributed.
- Informal Sector Vulnerability: A large proportion of the urban workforce is employed in the informal sector, making them vulnerable to economic shocks and lacking social security benefits.
- Impact of COVID-19: The COVID-19 pandemic and subsequent lockdowns reversed some of the gains made in poverty reduction, particularly among vulnerable groups.
| Indicator | Rural Poverty (2019-21) | Urban Poverty (2019-21) |
|---|---|---|
| Consumption-Based Poverty Ratio | 11.5% | 8.3% |
| MPI Poverty Headcount Ratio | 21.8% | 11.6% |
Conclusion
In conclusion, while available data indicates a reduction in poverty levels in India over time, both in rural and urban areas, it is crucial to acknowledge the limitations of these estimates and the persistence of significant challenges. The decline is not uniform, and rising inequality, vulnerabilities in the informal sector, and the impact of unforeseen events like the COVID-19 pandemic necessitate a more holistic and inclusive approach to poverty alleviation. Future strategies must focus on addressing multidimensional poverty, promoting equitable growth, and strengthening social safety nets to ensure that the benefits of development reach all sections of society.
Answer Length
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