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Poverty in India
Poverty in India is a major issue. Rural Indians depend on unpredictable agriculture
incomes, while urban Indians rely on jobs that are, at best, scarce.

Since its independence, the issue of poverty within India has remained a prevalent
concern. As of 2010, more than 37% of India’s population of 1.35 billion still lives below
the poverty line. More than 22% of the entire rural population and 15% of the urban
population of India exists in this difficult physical and financial predicament.

Poverty Situation

The division of resources, as well as wealth, is uneven in India - this disparity creates
different poverty ratios for different states. For instance, states such as Delhi and
Punjab have low poverty ratios. On the other hand, almost half the population in states
like Bihar and Orissa live below the poverty line.

A number of factors are responsible for poverty in the rural areas of India. Rural
populations primarily depend on agriculture, which is highly dependant on rain patterns
and the monsoon season. Inadequate rain and improper irrigation facilities can
obviously cause low, or in some cases, zero production of crops.
Additionally, the Indian family unit is often large, which can amplify the effects of
poverty. Also, the caste system still prevails in India, and this is a major reason for rural
poverty - people from the lower casts are often deprived of the most basic facilities and
opportunities. The government has planned and implemented poverty eradication
programs, but the benefits of these programs are yet to bear fruits.

The phenomenal increase in population in the cities is one of the main reasons for
poverty in the urban areas of India. A major portion of this additional population is due to
the large scale migration of rural families from villages to cities. This migration is mainly
attributed to poor employment opportunities in villages.

Since 1970, the Indian government has implemented a number of programs designed to
eradicate poverty, and has had some success with these programs. The government
has sought to increase the GDP through different processes, including changes in
industrial policies. There is a Public Distribution System, which has been effective to
some extent. Other programs include the Integrated Rural Development Program,
Jawahar Rozgar Yojana and the Training Rural Youth for Self Employment (TRYSEM),
and other on-going initiatives.

India's employment perspective

 Overview of unemployment Underemployment

Sector-wise absorption of labour Age structure of population: 1997-2002

Trends in Labour Force Participation Participation in labour force by age & sex

Labour Force Projections by Age Groups Population & Labour Force: 1997-2012

Projections of work opportunities Population, Labour Force & Employment

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Overview

• Economic reforms may have given a boost to industrial productivity and brought in
foreign investment in capital intensive areas. But the boom has not created jobs. This was
not unexpected. According to a report by the Washington-based Institute of Policy Studies
(IPS), the combined sales of the world's top 200 MNCs is now greater than the combined
GDP of all but the world's nine largest national economies. Yet, the total direct employment
generated by these multinationals is a mere 18.8 millions -one-hundredth of one per cent of
the global workforce.

• India's Ninth Five-Year Plan projects generation of 54 million new jobs during the Plan
period (1997-2002). But performance has always fallen short of target in the past, and few
believe that the current Plan will be able to meet its target.

• India's labour force is growing at a rate of 2.5 per cent annually, but employment is
growing at only 2.3 per cent. Thus, the country is faced with the challenge of not only
absorbing new entrants to the job market (estimated at seven million people every year),
but also clearing the backlog.

• Sixty per cent of India's workforce is self-employed, many of whom remain very poor.
Nearly 30 per cent are casual workers (i.e. they work only when they are able to get jobs
and remain unpaid for the rest of the days). Only about 10 per cent are regular employees,
of which two-fifths are employed by the public sector.

• More than 90 per cent of the labour force is employed in the "unorganised sector", i.e.
sectors which don't provide with the social security and other benefits of employment in the
"organised sector."

• In the rural areas, agricultural workers form the bulk of the unorganised sector. In
urban India, contract and sub-contract as well as migratory agricultural labourers make up
most of the unorganised labour force.

• Unorganised sector is made up of jobs in which the Minimum Wage Act is either not,
or only marginally, implemented. The absence of unions in the unorganised sector does not
provide any opportunity for collective bargaining.

• Over 70 per cent of the labour force in all sector combined (organised and
unorganised) is either illiterate or educated below the primary level.

• The Ninth Plan projects a decline in the population growth rate to 1.59 per cent per
annum by the end of the Ninth Plan, from over 2 per cent in the last three decades.
However, it expects the growth rate of the labour force to reach a peak level of 2.54 per cent
per annum over this period; the highest it has ever been and is ever likely to attain. This is
because of the change in age structure, with the highest growth occurring in the 15-19 years
age group in the Ninth Plan period.

• The addition to the labour force during the Plan period is estimated to be 53 millions
on the "usual status" concept. The acceleration in the economy's growth rate to 7 per cent
per annum, with special emphasis on the agriculture sector, is expected to help in creating
54 million work opportunities over the period. This would lead to a reduction in the open
unemployment rate from 1.9 per cent in 1996-97 to 1.47 per cent in the Plan's terminal
year, that is, by about a million persons - from 7.5 million to 6.63 million.

• In other words, if the economy maintains an annual growth of 7 per cent, it would be
just sufficient to absorb the new additions to the labour force. If the economy could grow at
around 8 per cent per annum during the Plan period, the incidence of open unemployment
could be brought down by two million persons, thus attaining near full employment by the
end of the Plan period, according to the Plan.

• However, there appears to be some confusion about the figure of open

unemployment. The unemployment figure given in the executive summary of the Ninth Plan,
gives the figure of open unemployment at 7.5 million while the annual report of the Labour
Ministry, for 1995-96, puts the figure for 1995 at 18.7 million. An internal government paper
prepared in 1997 put the unemployment figure at the beginning of the Eighth Plan at 17
millions and at 18.7 million at the end of 1994-95. Perhaps the Planning Commission
referred to the current figure while the Labour Ministry figure referred to the accumulated
unemployment backlog.

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Underemployment

• Open unemployment is not a true indicator of the gravity of the unemployment

problem in an economy such as India, characterised as it is by large-scale underemployment
and poor employment quality in the unorganised sector, which accounts for over 90 per cent
of the total employment. The organised sector contributes only about 9 per cent to the total
employment.
• Underemployment in various segments of the labour force is quite high.
For instance, though open unemployment was only 2 per cent in 1993-94, the incidence of
under-employment and unemployment taken together was as much as 10 per cent that
year. This, in spite of the fact that the incidence of underemployment was reduced
substantially in the decade ending 1993-94.
• According to the Planning Commission, the States which face the prospect of
increased unemployment in the post-Ninth Plan period (2002- 2007) are Bihar, Rajasthan,
Uttar Pradesh, Kerala and Punjab.

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Sector-wise absorption of labour
 Agriculture 62 per cent

Manufacturing & construction 16 per cent

Services 10 per cent

12 per cent
Sundry / miscellaneous jobs

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Table 1 : Age structure of population: 1997-2002

Age-group 1997 2002

0 - 14 37.23% 33.59%

15 - 59 56.07% 59.41%

60+ 6.70% 7.00%

Table 2 : Trends in Labour Force Participation Rates

(Per Thousand of Population)

Male Female
Age Group Period
Rural Urban Rural Urban

1977-78 879 746 515 257

15-29 1987-88 824 710 478 211
1993-94 804 684 455 204

1977-78 990 990 619 324

30-44 1987-88 988 987 603 301
1993-94 990 986 600 300

1977-78 963 940 538 291

45-59 1987-88 964 933 538 275
1993-94 968 937 543 283

1977-78 667 517 221 130

60+ 1987-88 670 482 220 123
1993-94 699 443 241 114
 1977-78 904 831 517 269
All (15+) 1987-88 879 810 496 239
1993-94 877 811 491 238

Note: Constituent shares in labour force in 1993-94 are Rural Male 0.499, Rural Female 0.270,
Urban Male 0.182 and Urban Female 0.049.
Table 3: Participation in Labour Force by Age Group and by Sex: 1997 - 2012
(per thousand of population)
Male Female
Age
1997 2002 2007 2012 1997 2002 2007 2012

15-19 517 482 447 412 302 282 261 241

20-24 871 408
25-29 975 454
30-34 988 505
35-39 996 526
40-44 986 (a) 538 (a)
45-49 981 524
50-54 961 476
55-59 914 411
60+ 637 205

Note: (a) No change in labour force participation in age groups above 20 years.

Table 4 : Labour Force Projections by Age Groups

1997 2002 Growth
Age Group
(Million) (% p.a.)

40.31 45.03 2.24

15-19 55.45 62.91 2.55
20-24 56.89 61.47 1.56
25-29 52.64 58.88 2.26
30-34
46.60 52.80 2.53
35-39
40-44 39.56 46.04 3.08
45-49 32.90 38.13 2.99
50-54 25.86 30.27 3.20
55-59 18.86 22.45 3.55
60+ 28.15 31.64 2.37

397.22 449.62 2.51

15+
Table 5: Population and Labour Force: 1997 - 2012
(million - 1st April)
1997 2002 2007 2012

Population 951.18 1028.93 1112.86 1196.41

Labour Force 397.22 449.62 507.94 562.91

Table 6 : Projections of Work opportunities 1997-2002

GDP Growth Work Opportunities
(% p.a.) (Million)
Sector

1997-02 1997 2002

3.9 238.32 262.48

Agriculture

7.2 2.87 3.54

Mining & Quarrying

8.2 43.56 48.22

Manufacturing

9.3 1.54 1.93

Electricity

4.9 14.74 17.03

Construction

6.7 34.78 41.67

Wholesale & Retail Trade

Transport, Storage & 7.3 11.96 14.57

Communication
Financing, Real Estate, Insurance 8.5 4.55 5.68
and Business Services
Community, Social and Personal 7.1 38.98 46.41
Service
6.5 391.30 441.52
All Sectors

Table 7 : Population, Labour Force and Employment

(Million)
8th Plan 9th Plan 10th Plan

1978 (a) 1983 (b) 1994 (a)

(1992-97) (1997-02)
(2002-07) (f)
(f) (f)

718.2 895.0 951.2 1028.9 1112.9

637.6
Population (c) (2.19) (2.12) (1.89) (1.58) (1.58)

286.6 368.5
255.8 374.2 423.4 478.8
Labour Force (2.09) (2.42)

Employment 249.1 281.2 361.5 367.2 416.4 474.7 (d)

 (2.23) (2.42)

Unemployment 6.7 5.4 7.0 7.0 7.0 4.1 (e)

2.63 1.89 1.89 1.87 1.66 0.86 (e)

Rate (%)
Notes:
1. Estimates of labour force and employment are on usual status concept and pertain to 15 years
and above.
2. Figures in brackets are compound growth rates in the preceding period.

(a) As on 1st January

(b) As on 1st July
(c) Population at the terminal year of the plan
(d) Required to attain near full employment.
(e) Unemployment reduces to negligible level by the year 2007
(f) Labour force, employment and unemployment are stated as annual averages during the Plan period.
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 LITERATES AND LITERACY RATES-2001 CENSUS (PROVISIONAL)

POPULATION, NUMBER OF LITERATES AND LITERACY RATES BY SEX-2001

S.No
. India/States Literacy Rate 2001 Literates 2001

Person Femal
Male Persons Male Female
s e
75.2 560,687,79 336,533,71 224,154,08
INDIA 64.84 53.67
6 7 6 1
Andhra 70.3
1 60.47 50.43 39,934,323 23,444,788 16,489,535
Pradesh 2
Arunchal 63.8
2 54.34 43.53 484,785 303,281 181,504
Pradesh 3
71.2
3 Assam 63.25 54.61 14,015,354 8,188,697 5,826,657
8
59.6
4 Bihar 47.00 33.12 31,109,577 20,644,376 10,465,201
8
Chhattisgar 77.3
5 64.66 51.85 11,173,149 6,711,395 4,461,754
h 8
87.3
6 Delhi 81.67 74.71 9,664,764 5,700,847 3,963,917
3
88.4
7 Goa 82.01 75.37 985,562 541,032 444,530
2
79.6
8 Gujarat 69.14 57.80 29,827,750 17,833,273 11,994,477
6
78.4
9 Haryana 67.91 55.73 12,093,677 7,480,209 4,613,468
9
Himachal 85.3
10 76.48 67.42 4,041,621 2,278,386 1,763,235
Pradesh 5
Jammu & 66.6
11 55.52 43.00 4,807,286 3,060,628 1,746,658
Kashmir 0
67.3
12 Jharkhand 53.56 38.87 11,777,201 7,646,857 4,130,344
0
76.1
13 Karnataka 66.64 56.87 30,434,962 17,661,211 12,773,751
0
94.2
14 Kerala 90.86 87.72 25,485,688 12,753,602 12,732,086
4
Madhya 76.0
India for comprehensive approach to resolve
socio-economic problems
Saturday, November 22, 2008 12:55:43 PM by IANS ( Leave a comment )

United Nations, Nov 22 (IANS) The international community needs to adopt a comprehensive
approach, and not a compartmentalised one, to tackle chronic social and economic problems that
have affected livelihood of individuals the world over, an Indian representative at the UN
said.Terming this as a major global challenge, Ashok Bhan, member of the Indian delegation to
the 63rd session of the UN General Assembly, said Friday the international community cannot
handle social and economic challenges with a compartmentalised perspective, which is often the
order of the day in the United Nations.

“Instead, a comprehensive human security approach may help in handling the problem, as
people’s insecurities are mutually interconnected and responses cannot be effectively
implemented in compartments, without proper coordination,” Bhan said.

He was addressing the 2008 Parliamentary Hearing at the UN on ‘Towards effective

peacekeeping and the prevention of conflict delivering on our commitments’.

Bhan said international debate on human security should incorporate a greater role of states and
governments in national decision-making. In today’s world, terrorism, ethnic conflicts, social
disintegration, pollution, organised crimes, international migration, financial crises and health
epidemics, are no longer isolated events, confined within national borders, he argued.

As such the concept of human security needs to be gradually realised through national effort and
international cooperation, in keeping with the economic and other capabilities of states, Bhan
said.

However, while doing so, he said, it must not be forgotten that a state has primary responsibility
not only for the protection and promotion of all human rights of its citizens, but also for
providing safe, healthy and secure environment to live in.