Poverty, Deprivation and Inequalities
Poverty, Deprivation and Inequalities in India
Poverty, deprivation, and inequality remain deeply entrenched challenges in India, despite its rapid economic growth and global economic stature. The country’s complex social fabric—with its caste hierarchies, class divisions, and gender disparities—has perpetuated unequal access to resources, opportunities, and social inclusion, making poverty a multi-dimensional and persistent issue.
Key Thinkers and Concepts
Amartya Sen and Jean Drèze have extensively analyzed India’s inequality, highlighting that it is not merely economic but also social, rooted in caste, class, and gender structures. Sen’s Capability Deprivation Approach defines poverty as the lack of essential capabilities, such as financial means, information, and social participation, that prevent individuals from living fulfilling lives. In contrast, economist Ruddar Datt defines poverty in India as a struggle to attain a minimum subsistence level rather than a reasonable standard of living, underscoring the severity of deprivation.
From a Marxist perspective, inequality and poverty result from capitalism’s tendency to concentrate wealth and power among a few elite groups, who influence government policies to perpetuate their dominance, thereby maintaining the divide between the rich and poor. The Vicious Circle Theory of Poverty illustrates how poverty traps individuals in cycles of deprivation, poor health, low educational outcomes, and limited economic opportunities, all reinforcing one another.
Women bear a disproportionate burden of poverty in India, with female-headed households and poor women facing heightened vulnerabilities and often forced to engage in low-paid labor. According to the Global Multidimensional Poverty Index, poverty rates are higher in female-headed households than male-headed ones. Additionally, India has the world’s largest population of poor children—over 97 million—who suffer from inadequate nutrition, education, and health, perpetuating intergenerational poverty.
Rural and Urban Poverty
India’s poverty is unevenly distributed between rural and urban areas. While urban regions have reaped more benefits from economic development, rural areas remain disproportionately poor. According to the 2015-16 National Family Health Survey and NITI Aayog’s multidimensional poverty report, about 33% of rural inhabitants live in poverty compared to less than 9% in urban centers.
Several factors contribute to rural poverty:
Overdependence on Agriculture: With over 70% of the rural population reliant on agriculture—whose GDP contribution has declined—many face precarious livelihoods. The rise of agricultural laborers over cultivators signals growing rural impoverishment.
Rural-Urban Migration: Large-scale migration reflects rural distress but also leads to fragmented families and social instability.
Implementation Gaps in Government Schemes: Corruption and bureaucratic inefficiency dilute the effectiveness of schemes like PM Awas Yojana and Swachh Bharat Abhiyan, limiting rural poor’s access.
Disguised and Seasonal Unemployment: Many agricultural workers are underemployed or face seasonal work gaps, increasing economic vulnerability.
Educational Disparities: Rural literacy rates lag behind urban rates by about 16 percentage points, limiting access to better jobs.
Caste-Based Exclusion: Historical land concentration among upper castes marginalizes Scheduled Castes (SCs) and Scheduled Tribes (STs), many of whom remain landless laborers.
Legacy of Colonialism: The destruction of traditional rural industries under British rule deepened reliance on agriculture, increasing rural poverty.
Unequal Green Revolution Benefits: The Green Revolution’s benefits were limited to certain regions, while small farmers elsewhere fell into debt traps.
Rapid Population Growth: Population growth outstripped resource availability, straining livelihoods.
Government Initiatives to Alleviate Rural Poverty
The Indian government has implemented several measures to tackle rural poverty comprehensively:
Agricultural Infrastructure: Schemes like Integrated Farming Systems, Zero-Budget Natural Farming, and PM-KISAN provide diversified income streams and financial support to farmers, promoting sustainable agriculture.
Non-Agricultural Infrastructure: Programs like PMGSY ensure rural connectivity through roads, while PMAY-Rural addresses affordable housing, improving living standards.
Health Sector Improvements: Expansion of Primary Health Centres, Swachh Bharat Mission’s sanitation drive, Anganwadi centers for maternal-child health, and ASHA workers’ community outreach aim to improve rural health outcomes.
Employment Generation: MGNREGA guarantees 100 days of wage employment, helping reduce distress migration and providing economic security.
Rural Infrastructure Development: Focused investments in roads, electricity, and sanitation create conditions for rural economic growth.
Skill Development: The Deendayal Antyodaya Yojana promotes livelihoods by empowering women through Self-Help Groups and providing skill training for youth, enhancing employability.
Reasons for Urban Poverty in India and Government Initiatives to Address It
Urban poverty in India arises from multiple interconnected factors that together create and perpetuate hardship for millions of city dwellers. One of the primary reasons is the availability of a large number of unskilled and semi-skilled laborers in urban areas, which keeps wages persistently low. Low income restricts individuals’ ability to invest in essential aspects such as health, education, and improved living conditions. As noted by economist Amiya Kumar Bose, the expenditure disparity between the top 5% and the bottom 5% of urban residents has been widening, with the gap being more pronounced in cities than in rural areas. This economic inequality limits upward mobility and sustains poverty among the urban working class.
Another significant contributor to urban poverty is migration from rural areas. Many migrants escape poverty in their native villages, but upon arriving in cities, they often find themselves in equally precarious conditions. Scholars like Dutt and Sundaram argue that rural poverty directly translates into urban poverty since most urban poor are rural migrants. Dandekar and Rath emphasize that the urban poor essentially represent an overflow of the rural poor, sharing similar socio-economic backgrounds. This influx strains urban infrastructure and creates demand for low-cost housing, leading to the proliferation of slums.
Slum development is a direct consequence of rapid urban migration and inadequate affordable housing. These slums and informal settlements are characterized by overcrowding, poor sanitation, and limited access to basic services. The informal sector thrives in such environments, offering employment opportunities that require minimal skill and investment but provide casual, insecure jobs with low and unstable incomes and no social security. This sector’s growth contributes to what Rumki Basu highlights: an expanding informal economy, increased casualization of labor, and mounting pressure on civic amenities. Moreover, slum conditions exacerbate health problems, which lead to higher medical expenses, creating a vicious cycle that deepens poverty. Illegal activities such as drug trafficking, prostitution, and child exploitation often become prevalent in these neglected areas, further compounding social challenges.
Recognizing these challenges, the government has launched various initiatives to combat urban poverty and improve living conditions for the urban poor. Housing sector programs like the Pradhan Mantri Awas Yojana (Urban) aim to provide affordable housing and rehabilitate slum dwellers through credit-linked subsidies and infrastructure upgrades. Odisha’s Jaga Mission stands out as the world’s largest slum land title project, granting land rights to slum residents and improving their living environments; this program has received international recognition for its innovative approach.
In the public health domain, initiatives such as Delhi’s Mohalla Clinics offer free primary healthcare services close to where the urban poor live, substantially reducing their healthcare expenditure. The Swachh Bharat Mission (Urban) complements this by improving sanitation infrastructure, promoting hygiene, and thereby indirectly enhancing health outcomes and overall living standards.
To address the economic vulnerabilities of the urban poor, especially youth, skill development schemes like the Deendayal Antyodaya Yojana – National Urban Livelihoods Mission (NULM) provide training, financial support for training-related expenses, and certification to improve employability. Other programs such as the Craftsmen Training Scheme and the Green Skill Development Programme equip urban youth with industrial and environment-friendly job skills, while the National Programme for Civil Services Capacity Building (Mission Karmayogi) indirectly supports workforce readiness.
In conclusion, urban poverty in India is a complex problem fueled by low wages, migration-induced slum growth, informal sector vulnerabilities, and systemic socio-economic inequalities. While government interventions targeting housing, healthcare, sanitation, and skill development mark significant steps forward, sustained efforts are necessary to ensure that the benefits reach the urban poor effectively and inclusively, transforming urban poverty into opportunity.
Poverty, Growth, and Inequality in India
The relationship between economic growth and poverty is complex and intertwined. While economic growth can potentially reduce poverty by creating more employment opportunities and raising incomes, its benefits are not always equitably distributed. Inclusive growth, where the advantages of development reach all sections of society, is crucial for meaningful poverty eradication. However, when growth disproportionately benefits the already affluent groups, it exacerbates inequality rather than alleviating poverty.
According to the Oxfam Report, India ranks among the fastest-growing economies globally, yet it also exhibits one of the highest levels of wealth inequality. The report highlights that the richest 1% of Indians own 77% of the nation’s wealth, with 73% of wealth gains in 2017 accruing to this elite group. Conversely, the poorest half of the population saw only a marginal increase of 1% in wealth, pointing to systemic issues like crony capitalism and inheritance-driven wealth concentration. Economist Kaushik Basu echoes this concern, observing that India’s aggregate growth primarily benefits those at the top of the income ladder, leading to deepening disparities.
This growth-inequality paradox is evident across various dimensions: class divisions, regional disparities between and within states, and the persistent rural-urban divide. Despite sustained economic progress, wealth distribution remains skewed, and poverty persists. Radhicka Kapoor further emphasizes that poverty reduction is not guaranteed by growth alone; the pattern of income distribution plays a decisive role. Higher inequality undermines growth’s potential to alleviate poverty.
Research by Ishan Anand and Anjana Thampi, covering the period from 1991 to 2012, documents a sharp rise in wealth inequality driven by neo-liberal economic policies. Their findings reveal that wealth has become increasingly concentrated in urban centers and among elite urban groups. In response, Annadurai advocates for ‘deglobalization’ as a strategy to counter the adverse impacts of global capitalism on the poor and reduce wealth concentration.
Vamsi Vakulabharanam’s analysis of macroeconomic trends between 1994 and 2005 uncovers a shift in India’s dominant class structure. While the 1980s featured a coalition of landowners and industrialists holding power, post-liberalization reforms in 1991 ushered in an urban elite as the singular dominant class. This shift intensified centralization of wealth and exacerbated social inequalities.
In conclusion, India’s economic growth story is marked by a paradox where rapid development coexists with widening inequalities and persistent poverty. Addressing this challenge requires policies focused not only on growth but also on ensuring equitable income distribution and inclusive social progress.