Causes of Poverty in India

There are two extreme perspectives on the basis of which we can analyse the causes of poverty in India. The old and the Modern

  • One view of poverty is that it is providential and it is the result of an individual’s past karmas or sins.
  • The other view ascribes poverty to be the result of a failure of an individual’s working abilities or due to his/her lack of motivation.

One modern view links poverty with factors which are behind and individual’s control, Dadar describes the functioning of social systems in the society as the cause of poverty.

Causes of Poverty in India

The causes of poverty in India may be described as under:

  1. Rapidly rising population
  2. Low productivity in agriculture
  3. Underutilized resources
  4. Low rate of economic development
  5. Price rise
  6. Unemployment
  7. Shortage of capital and able entrepreneurship
  8. Social factor
  9. Political factor

1. Rapidly rising Population

The population during the last 45 years has increased at the rate of 2.2 % per annum. On average 17 million people are added every year to its population which raises the demand for consumption goods considerably.

2. Low productivity in Agriculture

The level of productivity in agriculture is low due to subdivided and fragmented holdings, lack of capital, use of traditional methods of cultivation, illiteracy etc. This is highly centred Causes of Poverty in India.

3. Under-utilized resources

The existence of underemployment and disguised unemployment of human resources and under utilisation of resources have resulted in low production in agriculture sector. This is also brought downfall in their standard of living.

4. Low rate of economic development

The rate of economic development in India has given below the required level. therefore there persistent gap between level of availability and requirement of goods and services. The net result is poverty.

5. Price Rise

The continuous and steam price rice has added to the miseries of poor. This Causes of Poverty in India given benefit a few people in the society. The persons in lower income group find it difficult to get their minimum needs.

6. Unemployment

The continuously expanding army aapane employed is another cause of poverty. The job seekers are increasing in number at a higher rate than the expansion of employment opportunities. Unemployment is also the Causes of Poverty in India.

Causes of Poverty in India
Causes of Poverty in India

7. Shortage of capital and able entrepreneurship

capital and level entrepreneurship have important role in accelerating the growth. But these are in short supply making it difficult to increase production significantly.

8. Social Factor

The social set up is still backward and is not conductive to faster development. Laws of inheritance, caste system, traditional and customs are putting hindrances in the way of foster development and have aggravate the problem of poverty.

9. Political Factors

The Britishers started lopsided development in India and reduced Indian economy to a colonial state. They exploited the natural resources to suit their interests and we can the industrial base of Indian economy.

In independent India, the development plans have been guided by political interests. Has the planning not been successful to tackle the problems of poverty and unemployment.

Concluding the above discussion on the causes of poverty in India, it may be said that poverty in India needs to be preserved in relationship to three factors:

  • Diverse diverse historical and cultural roots of Indian attitudes, ideas, believes and values, people’s strong linkages with the past.
  • Fundamental relationship between the biological and psychological characteristics of man.
  • Changes in Indian society pertaining to public policy, particularly during and after liberation from the British rule.
Causes of Poverty in India
Causes of Poverty in India

As such, poverty existed in India, it was because of the economic policies of the British government, lack of incentives to the people, lack of education technological knowledge, exploitation of the rural people and religious and social barriers to control the family size. If after independence efforts are being made to certain poverty, it is through family planning, new industrial and agricultural policies, spread of education and giving subsidy and training to the needy people. (Causes of Poverty in India)

Measurements of PovertyCauses of Poverty in India
Social ProblemsRural Poverty
Poverty Pains and Problems of PoorAnti Poverty Programmes
Integrated Rural Development ProgrammePoverty Alleviation Measures
Indira Awas Yojana

Steps to Reduce Poverty

However, the combination of following measures may still prove to be more helpful in reducing poverty:

  1. Reducing the fiscal deficits by the central and the state governments.
  2. Lifting lifting import and restrictions and boosting up exports
  3. Controlling the borrowings
  4. Selling units in public sector which are constantly undergoing losses.
  5. Collecting more taxes
  6. Improving cost effectiveness by monitoring welfare expenditure
  7. Making additional funds available in the field of trade and commerce and controlling the bank rate as well as the capital erosion by making the realisation of bad debts easier.
  8. Loans to the weaker section of society may be provided at preferred rates while the extent of subsidy may be kept within reasonable limits.
  9. Through many licensing restrictions have been removed, there is scenes need to remove the remaining licensing item so that the competition, intensified and dynamism may be imparted to Indian industry.
  10. Lowering customs tariff for making the Indian economy internationally competitive.
  11. Removing constraints on capital intensive infrastructure industry such as power irrigation and telecommunications show that these may develop competitive market structures.
  12. our labour legislation till now is so designed as to provide workers with maximum security in terms of employment and wages. is provided both to workers and employers.
  13. Growth in agricultural economy must be accelerated scenes two third population is still dependent on the agriculture. This require section on several fronts including resolving the problems of land tenure, raising the level of investment, increasing availability of credit, ensuring appropriate pricing policies, developing new technologies to increase productivity.
  14. Integrating various scheme of rural development.
  15. Reducing subsidies, government expenditure and Government employees.

If we unhaltingly go on with our reforms, we can overcome the severe constraints on our economy, reduce poverty, and assure a prosperous future for our people.

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