Poverty – Dimensions and Challenges Explained

PovertyPoverty is a multidimensional concept.

The traditional definition of poverty concerns the inability of a person to realize the certain minimum basic level of consumption.

Poverty is the general scarcity of a certain amount of material possessions or money earned.

Poverty Definition by the World Bank

According to the World Bank, poverty is pronounced deprivation in well-bell being.

It includes low incomes and the inability to acquire the basic goods and services necessary for survival with dignity.

But no single indicator can capture the multiple dimensions of poverty.

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Poverty Estimation by Dr Amartya Sen

Dr Amartya Sen provided a useful alternative to understand poverty.

His capability approach to understanding poverty goes beyond income and stresses the whole range of means, available to achieve human capabilities such as literacy, longevity and access to income.

The Global Multidimensional Poverty Index

The 2019 Global Multidimensional Poverty Index published by the UN Development Program has estimated that multidimensional poverty in India has fallen by 27.5% between 2005-06 and 2015-16.

Need for understanding Multiple connotations:

  • Monetary-based poverty measures are inadequate: In most cases, not all individuals who are income poor are multidimensionally poor and not all multidimensionally poor individuals are income poor.
  • Economic growth does not always reduce poverty or deprivation. Several studies have found that economic growth is not strongly associated with a reduction in other deprivations, such as child malnutrition or child mortality.
  • Poverty as multidimensional: Poor people describe ill-being to include poor health, nutrition, lack of adequate sanitation and clean water, social exclusion, low education, bad housing conditions, violence, shame, disempowerment and much more.
  • Need for more policy-relevant information on poverty, so that policymakers are better equipped to deal with it: For example, an area in which most people are deprived in education requires a different poverty reduction strategy from an area in which most people are deprived in housing conditions.

Hence, multidimensional poverty encompasses the various deprivations experienced by poor people in their daily lives –

Health Nutrition Any adult under 70 years of age or any child for whom there is nutritional information is undernourished.
Child mortality Any child under the age of 18 years has died in the family in the five-year period preceding the survey.
Education Years of schooling No household member aged ‘school entrance age + six years or older have completed six years of schooling.
School attendance Any school-aged child is not attending school up to the age at which he/she would complete class eight.
Standard of living Cooking Fuel The household cooks with dung, wood, charcoal or coal.
Sanitation The household’s sanitation facility is not improved (according to SDG guidelines) or it is improved but shared with other households.
Drinking-Water The household does not have access to improved drinking water (according to SDG guidelines) or improved drinking water is at least a 30-minute walk from home, round trip.
Electricity The household has no electricity.
Housing At least one of the three housing materials for roof, walls and floor are inadequate: the floor is of natural materials and/or the roof and/or walls are of natural or rudimentary materials.
Assets The household does not own more than one of these assets: radio, television, telephone, computer, animal cart, bicycle, motorbike or refrigerator, and does not own a car or truck.

Other parameters include:

  • disempowerment
  • poor quality of work
  • social exclusion
  • rural-urban disparity
  • the threat of violence,
  • living in areas that are environmentally hazardous

Poverty alleviation programs in India

India has been conducting various poverty alleviation programs.

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Employment programmes and skill-building

  • Jawahar Gram Samriddhi 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.
  • 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. Under the programme, if an applicant is not provided employment within 15 days s/he will be entitled to a daily unemployment allowance.
  • National Rural Livelihood Mission: Ajeevika (2011): It evolves out the need to diversify the needs of the rural poor and provide them jobs with regular income on 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 the fresh entrant to the labour market, especially the labour market and class X and XII dropouts.

Food and shelter

  • Food for Work Programme: It aims at enhancing food security through wage employment. Foodgrains are supplied to states free of cost, however, the supply of food grains from the Food Corporation of India (FCI) godowns has been slow.
  • Annapurna: 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). 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’.
  • Pradhan Mantri Awaas Yojana: It has two components: Pradhan Mantri Awaas Yojana (Grameen) and Pradhan Mantri Awaas Yojana (Urban). It was launched in 2015. It unites schemes like Ujjwala yojana (provides LPG to BPL), access to toilets, water, drinking water facilities and Saubhagya Yojana (electricity).
  • Other schemes like Integrated Child Development Program, Midday Meal scheme etc are also providing food to the needy sections like children and women.

Access to credit

  • Pradhan Mantri Kisan Samman Nidhi: This scheme aims to provide financial assistance to provide working capital support to all the landholding farmers. This brings in the idea of universal basic income for the farmers in India.
  • 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.
  • Integrated Rural Development Programme (IRDP): It was introduced in 1978-79 aimed at providing assistance to the rural poor in the form of subsidy and bank credit for productive employment opportunities through successive plan periods.


  1. Incidence of extreme poverty continues to be much higher in rural areas than in urban areas.
  2. Despite rapid growth and development, an unacceptably high proportion of our population continues to suffer from severe and multidimensional deprivation. 
  3. While a large number of poverty alleviation programmes have been initiated, they function in silos. There is no systematic attempt to identify people who are in poverty, determine their needs, address them and enable them to move above the poverty line.
  4. The resources allocated to anti-poverty programmes are inadequate and there is a tacit understanding that targets will be curtailed according to fund availability. For instance, Mahatma Gandhi National Rural Employment Guarantee Act does not provide the guaranteed 100 days of work in many states.
  5. There is no method to ensure that programmes reach everybody they are meant for.
  6. Lack of proper implementation and right targeting
  7. There has been a lot of overlapping of schemes.
  8. Every year a huge number is added to the population pool of the country. This renders the scheme ineffective.

Way Forward

The World Health Organization has described poverty as the greatest cause of suffering on earth. Poverty eradication should not be the goal of the government but the goal of the government policies should be to create prosperity. Both monetary and non-monetary measures of poverty are needed to better inform the policies intended to address the needs and deprivations faced by poor populations.

Accelerating rural poverty reduction:

  • It’s not just about agricultural growth, which has long been considered the key driver of poverty reduction. Rural India is not predominantly agricultural and shares many of the economic conditions of smaller urban areas.
  • Capitalizing on the growing connectivity between rural and urban areas, and between the agriculture, industry and services sectors, has been effective in the past.

Creating more and better jobs

  • Future efforts will need to address job creation in more productive sectors, which has until now been lukewarm and has yielded few salaried jobs that offer stability and security.

Focusing on women and Scheduled Tribes

  • The most worrying trends are the low participation of women in the labour market and the slow progress among scheduled tribes.
  • India’s women have been withdrawing from the labour force since 2005and less than one-third of working-age women are now in the labour force. As a result, India today ranks last among BRICS countries, and close to the bottom in South Asia in female labour force participation.
  • Scheduled Tribes started with the highest poverty rates of all of India’s social groups, and have progressed more slowly than the rest.
  • Women and Scheduled Tribes are at risk of being locked out of India’s growth and prosperity.

Improving human development outcomes for the poor

  • The recent past shows that some problems, such as undernutrition and open defecation, are endemic and not only confined to the poor but others too, and have not improved with economic growth.
  • Better health, sanitation and education will not only help raise the productivity of millions, they will also empower the people to meet their aspirations, and provide the country with new drivers of economic growth.

Together with mooting the discussion on the need to provide a universal basic income, infrastructural and skill development combined with effective implementation of welfare policies will go a long way in eradicating poverty in the country.

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