UPSC MainsECONOMICS-PAPER-II201620 Marks150 Words
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Q9.

Critically examine the difference between absolute poverty and relative poverty. Between the two which is more appropriate? Give reasons.

How to Approach

This question requires a comparative analysis of absolute and relative poverty, culminating in a reasoned judgment about which is more appropriate for policy formulation. The answer should define both concepts, highlight their differences with examples, and then argue for the greater relevance of one over the other in the contemporary context, particularly for a developing economy like India. Structure the answer by first defining the terms, then comparing them, and finally providing a justified conclusion. Focus on the practical implications of each concept for poverty alleviation strategies.

Model Answer

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Introduction

Poverty, a multifaceted socio-economic condition, is often categorized into absolute and relative forms. While both represent deprivation, they differ significantly in their definition and measurement. Absolute poverty refers to a condition where individuals lack the basic necessities for survival – food, shelter, clothing – falling below a minimum subsistence level. Relative poverty, conversely, defines poverty in relation to the economic status of other members of the society. Understanding this distinction is crucial for designing effective poverty reduction policies, especially in a rapidly changing economic landscape like India, where economic growth hasn’t necessarily translated into equitable distribution of wealth.

Absolute Poverty: A Basic Needs Perspective

Absolute poverty is defined by a fixed standard of living, typically measured against a poverty line representing the minimum income required to meet basic needs. This line is often based on the cost of a minimum calorie intake (in India, historically 2400 calories per person per day) or a basket of essential goods and services. Individuals below this line are considered absolutely poor.

  • Measurement: Typically uses a monetary threshold (e.g., World Bank’s $2.15/day poverty line as of 2022).
  • Focus: Survival and basic needs fulfillment.
  • Example: A family in rural India unable to afford two square meals a day, lacking access to clean water and sanitation, and living without adequate shelter.

Relative Poverty: A Social Comparison Perspective

Relative poverty, on the other hand, is defined in relation to the average living standards within a specific society. It focuses on income inequality and the deprivation experienced by those at the lower end of the income distribution. It doesn’t necessarily mean a lack of basic necessities, but rather a significant shortfall compared to the prevailing societal norms.

  • Measurement: Often expressed as a percentage of the median or mean income (e.g., 60% of the median income).
  • Focus: Social exclusion and inequality.
  • Example: A family in a developed country unable to afford healthcare, education, or participate in common social activities due to low income, despite having basic necessities.

Comparing Absolute and Relative Poverty

The key differences between the two can be summarized in the following table:

Feature Absolute Poverty Relative Poverty
Definition Lack of basic necessities for survival Lack of resources compared to others in society
Measurement Fixed poverty line (calorie intake, essential goods) Percentage of median/mean income
Focus Survival, basic needs Social inclusion, inequality
Relevance More relevant in developing countries More relevant in developed countries

Which is More Appropriate?

While both concepts are important, absolute poverty is arguably more appropriate for a developing country like India. This is because a significant portion of the population still struggles to meet basic needs. Focusing solely on relative poverty might overlook the plight of those who are genuinely deprived of the necessities for survival. Addressing absolute poverty is a prerequisite for achieving broader social and economic development. Furthermore, India’s historical context of widespread deprivation necessitates a primary focus on ensuring a minimum standard of living for all citizens. However, as India progresses, the focus should gradually shift towards addressing relative poverty and reducing income inequality to ensure inclusive growth.

The Multidimensional Poverty Index (MPI), adopted by NITI Aayog, attempts to capture both absolute and relative deprivation by considering factors beyond income, such as health, education, and standard of living. This holistic approach is crucial for effective poverty reduction.

Conclusion

In conclusion, while relative poverty highlights societal inequalities, absolute poverty remains the more pressing concern for a nation like India striving to uplift millions from destitution. Prioritizing the fulfillment of basic needs through targeted interventions, coupled with a long-term vision of reducing income disparities, is essential for achieving sustainable and inclusive development. A nuanced understanding of both concepts, and a policy framework that addresses both, is ultimately required for a just and equitable society.

Answer Length

This is a comprehensive model answer for learning purposes and may exceed the word limit. In the exam, always adhere to the prescribed word count.

Additional Resources

Key Definitions

Poverty Line
The minimum level of income deemed adequate to maintain an acceptable standard of living in a particular country or society. It is often used as a benchmark for measuring poverty rates.
Multidimensional Poverty Index (MPI)
An international measure of acute poverty which looks at multiple deprivations at the household level, including health, education and standard of living.

Key Statistics

As per the NITI Aayog’s National Multidimensional Poverty Index (MPI) 2023, 15.2% of India’s population is multidimensionally poor.

Source: NITI Aayog, National MPI 2023

According to the World Bank, in 2019, approximately 9.2% of the world’s population lived in extreme poverty (below $2.15 per day).

Source: World Bank, Poverty and Shared Prosperity Report 2022

Examples

The Public Distribution System (PDS)

India’s PDS is a prime example of a policy aimed at addressing absolute poverty by providing subsidized food grains to vulnerable sections of the population.

Frequently Asked Questions

Can a person be relatively poor without being absolutely poor?

Yes, a person can be relatively poor even if they have their basic needs met. They may lack the resources to participate fully in society or enjoy the same standard of living as others.

Topics Covered

EconomySocial IssuesPovertyInequalitySocial Welfare