Question

how is indebtedness both cause and effect of poverty

Answer 1

1- Historically, there was a low level of economic development under the British colonial administration prior to 1947.They discouraged traditional handicraft and also industrial development, reducing job opportunities and income growth.

2- The low level of development persisted for many years after independence and due to population increase, per capita income growth was low, increasing poverty.

3- The green revolution improved opportunities in agriculture, only in certain areas of the country.

4- The growth in population increased the number of job seekers, who had to be content with low paying jobs in urban areas, leading to poverty spreading to towns and cities.

5- Socio -cultural and economic factors lead to extra expenditure, which ultimately increases poverty.

6- There is unequal distribution of land and other resources, that is why there are large income inequalities also.

7- Land reforms have not been properly implemented and lack of adequate land resources is also a reason for many people to be poor.

8- Small farmers borrow money for seeds, fertilizers and pesticides, etc and later on fail to pay landing in debt trap. This high level of indebtness is both the cause and effect of poverty.

Answer 2

Small farmers need money to buy agricultural inputs like seeds, fertilisers etc. Since poor people have hardly any savings they borrow.unable to repay because of poverty they become victims of indebtedness.so high level of indebtedness is both a cause and a consequence