The poverty in India is rising once again. The economic crisis and COVID-19 pandemic has made the life of ordinary working people more miserable. The poor people in last one year have become poorer. The extreme poverty is also on the rise.
Just in last one year, the people living in extreme poverty have doubled. People find it difficult to feed themselves. Not only the relative poverty is on rise but extreme poverty has increased even more sharply in the last one year. The impacts of COVID-19 pandemic have felt much more deeply because Indian economy was slowed down before the coronavirus spread in India.
The unemployment and poverty were rising before the COVID-19 pandemic. The rural economy was in crisis. The rural India felt the negative impacts of lockdown and mass migration back to rural areas from urban centres as the result of the lockdown.
The COVID-19 pandemic struck India when it recorded its lowest economic growth in over a decade. The slowing economy was hit hard by lockdown imposed to slowdown the spread of coronavirus. The Indian economy contracted nearly 10% in 2020. The economic crisis had disproportionately impacted the rural areas, where majority of Indians still live.
Unemployment was high; consumption expenditure was constantly coming down; and public spending on development was stagnant. These considered as pillars of economic growth in any country.
The informal sector workers found it hard to get jobs and work during 2020. The horrifying stories of precarious survival are pouring out. Starvation and hunger has become a new normal in the lives of poor families. People are cutting back on food items; many have stopped having the basics like lentil as food inflation has spiked.
The Mahatma Gandhi National Rural Employment Guarantee Scheme is no more able to absorb demands for employment. Many are digging into their meagre savings. With the second wave of the pandemic hitting hard, it is a situation of extreme desperation.
According to the Pew Research Center research using World Bank data, has estimated that the number of poor in India (with income of $2 per day or less in purchasing power parity) has more than doubled in just a year due to the pandemic-induced recession. This means, India is back in a situation to be called a “country of mass poverty.”
With this, India’s uninterrupted progress in poverty reduction since the 1970s has stalled. Last time India reported an increase in poverty was in the first quarter-century after Independence. From 1951 to 1974, the population of the poor increased from 47 to 56 per cent of the total population.
In the recent years, India emerged as the country with the highest rate of poverty reduction. In 2019, the Global Multidimensional Poverty Index reported that India lifted 271 million citizens out of poverty between 2006 and 2016. Contrast this with the situation in 2020: the highest global poverty increase happened in India.
India has not counted its poor since 2011. But the United Nations estimated the number of poor in the country to be 364 million in 2019, or 28 per cent of the population. All the estimated new poor due to the pandemic is in addition to this.
Also, as estimates point out, millions in urban areas have also slipped below the poverty line. Even the middle class has shrunk by a third, says Pew Center’s estimate. Overall, cutting across population and geographical segments, millions of Indians have either become poorer, or poor, or on the brink of becoming poor.
60% of the poor still lives in the states of Bihar, Jharkhand, Odisha, Madhya Pradesh, Chhattisgarh, Uttar Pradesh and Uttarakhand. The reason for these states to be in the category of the poorest state is because 85% of tribal people live there. Also, most of these regions are either flood-prone or suffer from calamities.
These conditions hamper agriculture to a great extent, on which the household income of these groups depends. Tribal people, Dalits and working people including farm workers in villages and casual workers in cities are still very poor and make the poorest class in India.
People have reduced spending or are not able to spend. They have already exhausted their savings, reducing their capacity to spend in future. Government spending is also proportionate to the crisis. This means a perpetuation of the current economic situation. And a way out of it is not certain, like the pathway of the pandemic.
There are many ways of defining and estimating poverty in a country, such as India. For example, the Tendulkar Committee in India based its calculations of subsistence level on the requirement of cereal, pulses, milk, edible oil, non-vegetarian items, vegetables, fresh fruits, dry fruits, sugar, salt & spices, other food, fuel, clothing, footwear, education, medical (non-institutional and institutional), entertainment, personal & toilet goods, other goods, other services and durables.
Hence, as per Tendulkar Committee methodology, the national poverty line (in Rs per capita per month) for the year 2011-12 was calculated at Rs 816 for rural areas and Rs 1000 for urban areas. Using this methodology, the National Sample Survey Organisation estimated poverty at 21.9% of the population (269 million) in 2011-12. That means in the category of poor fell the people whose daily income was less than Rs 27 a day in villages and Rs 33 a day in cities. On the other hand, the subsequent Rangarajan Committee pegged the poverty line at Rs 32 in rural areas and Rs 47 in urban areas. On this basis, the number of poor living below the poverty line in India in 2011-2012 was revised to 29.5% of the population (363 million).
In contrast, the international poverty line as updated in October 2015 by the World Bank stands at US$1.90 per day (2011 PPP). In 2011, 21.2% of the total population in India was estimated to be living below this poverty line, as per the World Bank data.
Household expenditure is considered for calculating the poverty count in India. In this method, the purchasing power of people for buying food and some essential non-food items is taken into account.
But in spite of all the attempts, the overall number of poor in India is still increasing and becoming a hurdle. Poverty is just like a disease to which many other problems such as crime, low-paced development, etc are associated. There are number of people in India who still live on the streets and beg for the whole day to eat a meal.
Underprivileged children are unable to attend school and, and those have the opportunity drop out after a year or so. People below poverty line live in unhygienic conditions and are so prone to many health problems. With this, the vicious cycle of poor health, lack of education and more poverty keeps on increasing.
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