What is the basic causes of reduction of poverty in india economics?
Answers
Some of the most important causes of poverty in India are as follows: 1. Lack of Inclusive Economic Growth 2. Sluggish Agricultural Performance and Poverty 3. Non-implementation of Land Reforms 4. Rapid Population Growth 5. Unemployment and Under-employment 6. Slow Growth of Employment Opportunities in the Organised Sector 7. Inflation and Food Prices.
Even under-estimates of poverty as made by NSS 1999-2000 show that 260 million persons or 26 per cent of population live below the poverty line, that is, do not have sufficient consumption expenditure to meet minimum food intake in terms of calories. 70 per cent of the poor live in the rural areas. What are the causes of this mass poverty? We explain below some important causes of poverty in India.
Answer No -1
1. Lack of Inclusive Economic Growth:
The first important reason for mass poverty prevailing in India is lack of adequate economic growth in India. In the first three decades of planned development (1951-81) in India, annual average growth in national income had been 3.6 per cent.
With 2.1 per cent per cent per annum growth in population, per capita income grew by only 1.5 per cent per annum during this period. In addition, with the increase in saving rate from about 9 per cent in 1950-1951 to 20 per cent of GDP in 1979-80, increase in per capita consumption expenditure was too small to make any significant dent on the problem of poverty. Besides, because of prevailing income inequalities per capita consumption expenditure of the poor could have hardly risen.
In the next two decades of development (1981-2000) national income increased on an average by 5.5 per cent per annum. With about 2 per cent per annum growth in population, per capita income rose by 3.5 per cent which was quite high and, as seen above, did result in some decline in poverty ratio both in the rural and urban areas.
But this could not sufficiently reduce poverty because land reforms could not be implemented in agriculture and industrial growth did not generate much employment opportunities. Besides strategy of growth benefited the rich more than it helped the poor.
Capital intensive and labour-displacing technology was adopted in the growing industries. As a result, unemployment and underemployment increased. Besides, due to the increase in income inequalities during this period, rise in average per capita income could not bring about significant rise in per capita income of the weaker sections of the society.