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Poverty in India: Facts, Causes, Effects and Solutions

Poverty in India: Facts, Causes, Effects and Solutions

Assistant Editor

14 Mar, 2019

There are many reasons for poverty in the country. For one, the British had left the country with a starving population and limited resources. At the time of India’s independence, 80% of the population was in poverty. From that stage to where we are now (13.4% according to the WorldBank), India has done well in reducing poverty. Yet, the goal of eradicating poverty is still the top goal for policymakers. 

What are the causes of poverty in India, and what are its effects? What are the solutions to eradicate poverty in India? Here are some answers to these questions.

Poverty Facts

Poverty is a state where a person cannot meet basic needs like food, clothing, clean drinking water, and shelter. The NITI Aayog’sMultidimensional Poverty Index (MPI) 2021, which takes health, education, and standard of living as three dimensions of poverty, suggests that 25.01% of the population in the county lives in poverty. 


Causes and Effects of Poverty

1.      Demographics

a.      Poor Agricultural Infrastructure – Agriculture was the backbone of the Indian economy for a long time. The majority of the population in the country still has agriculture as the source of income. But, old agricultural practices, low productivity, and fragmented farmland ownership lead to low income and poverty in the agricultural community.

b.      Unequal distribution of assets – Over the decades, the upper and middle-income groups in India saw a faster increase in earnings compared to the lower-income groups leading to income inequality. The scenario in India is such that 80% of the wealth in the country is controlled by just 20% of the population. This unequal distribution of income is one of the reasons behind poverty.

c.      Unemployment – Unemployment is another factor that multiplies the effect of poverty in the country. Almost 77% of families do not have a regular source of income in India.

2.       Social

The various social issues that contribute to poverty are:


a.  Education and illiteracy – Lack of education is majorly responsible for poverty in India. Due to the increase in the illiteracy rates, the unemployment rate rises, and poverty rates increase.

b. Outdated Social Customs –Social customs like the caste system cause segregation and marginalization of certain sections of the society and play a prominent role in spreading poverty. Due to the caste system, certain social groups are disadvantaged in accessing basic things like food, water, and shelter in India.

c. Gender inequality – India is predominantly a patriarchal society where the female gender is discriminated against. The weak status attached to women is hugely responsible for the poor condition of women in the country. Discrimination in wages, access to education, and employment opportunities put women in poverty.

d. Corruption – Although the government promises to make considerable efforts now and then to make India corruption-free, the reality is very different. Corruption is deep-rooted in India. It is challenging to make India corruption-free. The rise in corruption rates is simultaneously increasing poverty rates.

3. Individual Individual lack of effort also becomes a huge reason behind the increase in poverty rates. Some people are lazy and do not wish to work hard. Such people suffer from poverty due to a lack of personal efforts.

Effects of Poverty in India

Poverty in India is like a disease that has devastating effects on an individual and their family. The major effects are as follows:


1. Effect on Health

The biggest effect of poverty is on health. Those who suffer from poverty do not have access to enough food, adequate clothing, access to good quality medical facilities, and clean surroundings. The lack of all these basic facilities leads to poor health. Such individuals and their families suffer from malnutrition and illness that ultimately reduce their working days and push them further into poverty.

Other effects on health are

• High Infant Mortality

Each year around 1.4 million children die in India before their 5th birthday; India is one of the countries with the highest child mortality rates. The causes of death are pneumonia, malaria, diarrhea, and chronic malnutrition. Some of these are the results of poverty.

• Malnutrition

India is on top when it comes to malnutrition. More than a 200million people lack access to sufficient food, including 61 million children.

2. Effects on Society

The effects of poverty on society are as follows:

a. Violence and crime rate – The occurrence of violence and crime is geographically coincident. Due to unemployment and marginalization, poor people often indulge in wrong practices such as prostitution, theft, and criminal activities such as chain snatching, etc.

b. Homelessness – Poor people are usually homeless. They sleep on the roadsides at night. This makes the entire scenario very unsafe, especially for women and children.

c. Stress – Due to lack of money, poor people suffer from a lot of stress which leads to a reduction in individual productivity, thereby making poor people poorer.

d. Child labor – Poverty forces poor people to send their children to work instead of sending them to schools. This is because the families fail to bear the burden of their child/children. Among the poor families, children start earning at an average age of 5 years only.

According to law, children under 14 years are prohibited from working in India. But as per the official figures, 12.5 million children between the ages of 5 and 14 are working. Also, 65 million children between the ages of 6 and 14 do not go to school and instead work in fields, factories, quarries, private households, and in prostitution.

e. Terrorism – Youngsters from poor families are the targets for terror recruitment. These people are offered large amounts of money for the destructive task of terrorism.

3. Effect on Economy

Poverty is directly proportional to the success of the economy. The number of people living in poverty is reflective of how capable the economy is. When more people are working productively, a country’s economy flourishes.

Solutions to Eradicate Poverty In India

The measures that should be taken to fight the demon of poverty in India are as follows:

1.      Providing equal access to basic amenities

Access to basic amenities, especially in rural areas, is essential to eradicate poverty. With access to food, clean drinking water, and shelter, poor people will be capable of working productively and pulling themselves out of poverty.

2.      Improving agricultural income

With the majority of the population in the country still dependent on agriculture for income, improving agricultural income will surely bring many people out of poverty. The government’s Doubling Farmer’s Income by2022-23 is an essential step in this regard.

3.      Increasing non-farm employment

Generating non-farm employment is another important solution to eradicating poverty in the country. Sectors like food processing, transport, construction, sales, marketing, etc., can generate employment for many.

4.      Fair access to credit

Fair access to credit will allow enterprising youth to set up businesses and generate employment. But, the current system does not allow fair access, and steps are being taken to correct the system. One such step is the women-oriented credit facilities introduced by banks. Government schemesMudra Yojana, Stree Shakti Yojana, Annapurna Scheme, etc., are women-oriented schemes for credit accessibility.

5.    Girl education

Providing education to a girl child is essential in eradicating poverty. It will enable girls to access formal employment and become self-reliant.

6.      Accelerating economic growth

Accelerating economic growth will generate more jobs, and the government will receive more revenue in the form of taxes. The government can, in turn, uses the money to directly attack poverty by bringing our poverty alleviation programs and building the necessary infrastructure.