Economy

India’s Vicious Poverty Cycle

India, the second most populated country after China, is a nation where two-thirds of the people live in poverty. India has enjoyed high rates of growth in the past and is considered to be one of the largest economies of the world. However, India has attained sustainability only in terms of quantity and not quality. Only a small percentage of the Indian population has benefited from this impressive economic boom, whereas a majority of the people living in India is still suffocating under conditions of abject poverty and destitution, with a pathetic standard of living. The Government of India has classified the population Below the Poverty Line (BPL) into two categories according to rural or urban settlement – where the income of such a person residing in rural areas is below Rs.816 per month and that of one who stays in urban towns and cities is below Rs.1000.  According to the UNS, 27.1 crore people in India, fall under the BPL category.

Poverty in India impacts families, children and individuals in different ways, and manifests itself in different problems such as malnutrition, high infant mortality rate, child labour, child marriage and life-threatening diseases like HIV or AIDS. This article attempts to analyse the causes behind India’s chronic poverty and its simultaneous ripple effect where one thing leads to another, making it a vicious cycle.

India’s key setback is overpopulation and illiteracy and these two factors act like a catalyst for the growing problem of unemployment. Overpopulation has occurred due to the fact that India has a very high level of birth rate, which has been accompanied with a steep fall in death rates. This increasing population also demands a higher rate of economic growth which would help in maintaining a decent standard of living of the population. Most of the Indian populace is employed in the agrarian sector where high levels of unemployment, disguised employment and underemployment can be recorded. Disguised unemployment can be understood as a phenomenon where labourers are seemingly employed; however, their marginal productivity is zero or negative, and hence their input does not really constitute a major contribution to the production. Underemployment on the other hand occurs when the labour forces are employed in jobs which do not engage workers full time, those which are irregular or inadequate for their training and economic needs. We know that India has an abundant labour supply and it is genuinely difficult to provide employment to its entire working population. Thus, this major problem of unemployment, underemployment and disguised unemployment exists. Hence, it can be concluded that a major reason for poverty is the menial quality of jobs with low wage rates.

Adding to that is the problem of unskilled labourers in India. This occurs because the majority of our population is illiterate, which is also a reason why the people are not employed. Also because of overpopulation, families are not able to provide quality education to the members. Therefore, that is the reason why the labourers are underpaid, earning extremely low amounts compared to those of the developed countries. Low levels of income further lead to the problem of low standards of living and the desperation of employment often leads people to live in urban slums with very unhygienic living conditions. Living in these unhygienic conditions often cause various diseases and disabilities among the people, further making them incapable of employment and victims of various diseases. A nation with individuals lacking in physical health and mental capability is naturally bound to suffer from low productivity.

Again, one of the branches of illiteracy is warped family planning. In India, there is often a trend in rural households to have more than two children; such people, however, fail to realize that greater number of children also means higher costs, while these families have low income. The large family size also further highlights the fact of quantity over quality, where people cannot receive quality education, and for that matter, even proper provisions. This further adds on to the problem of increasing overpopulation. Moreover, the obsession for a male child can also be cited as a reason for India’s rapidly growing population.

Coming to the gender aspect, there is a discriminatory price policy followed in India, where women are paid much less for doing the exact same work. A lot of times, women, such as homemakers, are involved in unpaid chores which are looked upon as a responsibility.

Further adding on to the problem, we may look at the issue of discrimination of the minorities and ethnic communities in our country. Most of us know that there exists a lot of discrimination in the country towards a certain community of people who are still considered as ‘untouchables’ and are kept in charge of certain menial jobs which are exclusive to them. It has also been estimated that around 60% of the poor people reside in the states of Orissa, Bihar, Jharkhand, Madhya Pradesh, Uttar Pradesh and Uttarakhand. It should be noted that the states mentioned above are also homes to a majority of the tribal population. Social evils like discrimination, religion-based politics, superstitions, and gender-bias further abstain us from reaching our economic goals.

We should also note that there is great inequality in the distribution of assets, which is also the principal cause of the unequal distribution of income in rural and urban areas. The RBI’s survey of assets in rural and urban households for the period of July 1991-1992 brings out that in rural areas, 27% of the households owning less than Rs 20,000 worth of assets accounted for 2.4% of total assets. A leading cause of concern for economic development is to ensure continued growth and justice through better distribution of the national wealth produced in the country.

At present we know that the Indian economy is not doing very well and is going through a recessionary phase where the agrarian, banking, automobile and telecom sectors are facing the worst blow in decades. Consumption levels have dropped so much in the last three decades that the government has stopped publishing the consumption data which can be accessed by the public. The unemployment rate in India lies at 6.1% which is the four-decade high, most likely to have been caused by demonetization, which was a terrible blow for many small-scale industries. As per the NSO in December 2019, the states of Bihar, Jharkhand and Odisha have seen a sharp increase in poverty rates over the course of the past few years. Other than these quantitative indices, India has also failed to achieve a decent position in the World Happiness Index. According to the latest World Happiness Report published by the United Nations Sustainable Development Report, India has dropped down seven spots in this system of ranking from its 2018 position. India rank is 140th out of 152 countries as of March 2019, which is far behind its immediate neighbours’ like Nepal, Bhutan, Sri Lanka, Bangladesh and Pakistan.

India’s economic turmoil can be attributed to its faulty policies. There is a hypothesis in the study of economics known as the ‘Secularization hypothesis’ where it has been empirically tested that economic development results in an individual’s decreasing religious participation and beliefs. However, in India, instead of focusing on economic development and poverty eradication as our ultimate goal, a lot of emphasis is being laid on pseudo-nationalism while severe religion-based policies are being enforced. Additionally, because of political instability, the country is going through a very rough phase where people are losing their jobs and the entire economy is in a state of havoc. A stable political condition leads to a stable economy but sadly, India is gradually moving away from its ultimate goal of a stable economy to pseudo-religious philosophies.

Picture Credits: businesstoday.in

 



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