Poverty and Inequality

By: Megha Das (34) Kumari T (28) Neha Narla (46) Haritheji(22) Aparna KS (25)

Contents:
Developed vs developing nations Developing nations India Govt measures

Measuring poverty
When measured, poverty may be absolute or relative poverty. Absolute poverty refers to a set standard which is consistent over time and between countries. An example of an absolute measurement would be the percentage of the population eating less food than is required to sustain the human body (approximately 20002500 calories (per day). Relative poverty, in contrast, views poverty as socially defined and dependent on social context. One relative measurement would be to compare the total wealth of the poorest one-third of the population with the total wealth of the richest 1% of the population. In this case, the number of people counted as poor could increase while their income rises. There are several different income inequality metrics; one example is the Gini coefficient. Here the percentage of poor compared to the percentage of rich. The world bank defines poverty in absolute terms. The bank defines extreme poverty as living on less than US$1.25 per day

Inequality
Gap between rich and poor remain same in countries France Portugal , Spain but it is increasing more in Australia, Denmark, Finland, UK, Mexico, united states gap is more. As per statistics ratio of income for Rich and poor countries is 9:1 Gini coefficient to measure inequality it is based on two assumptions
o Every one same income o Rich only have the income

Movement of Gini coefficient

o US, Finland, Germany Sweden increased o Mexico, turkey fell down

 Since 1990, increase in extremely high income in US, Canada, Ireland, Finland due to top income tax rates falling, More people work part time, More women working.

Developed vs developing countries

Developed countries
country US Type of government federal republic government (democratic) How poverty threshold is calculated Threshold is set at three times the cost of a minimum food diet in 1963, updated annually for inflation using the Consumer Price Index, and adjusted for family size, composition, and age of householder.
a household income that is 60% or less of the average (median) British household income in that year. half of the middle income for all households, that is, 50% of median household income.

UK

constitutional monarchy (royalty and democracy combined)

Australia federal federation

Developing countries
Country Government How poverty is calculated

India

Democratic(consti Measured with the help of parameters with tutional, federal, scores given from 04, with 13 parameters. republic) Families with 17 marks or less out of a maximum 52 marks have been classified as BPL
the minimum level of per-capita consumption expenditure at which the members of a household can be expected to meet their basic needs

Afganisthan Islamic republic

 Rich nations generally employ more generous standards of poverty than poor nations. Thus, the numbers are not comparable among countries 21% of people in the developing world lived at or below $1.25 a day. Thats down from 43% in 1990 and 52% in 1981. It means that 1.22 billion people lived on less than $1.25 a day in 2010, compared with 1.91 billion in 1990, and 1.94 billion in 1981. Notwithstanding this achievement, even if the current rate of progress is to be maintained, some 1 billion people will still live in extreme poverty in 2015.

GDP

POPULATION

Poverty Headcount at National Poverty Line

FEMALE HEADED HOUSEHOLDS AND POVERTY

To check if there is a relationship between the family heads and the level of poverty Level of poverty- based on the dimension chosen Importance in India Reasons: 1) more dependents and higher non-workers to workers ratio 2) female heads work for lower wages and have less access to assets 3) Time constraints

 Two channels of gender bias in India: 1) work place discrimination 2) intra-household discrimination. Inequality index second highest among the South Asian countries. Some of the govt. measures taken: 1) National Maternity Benefit Scheme: provides a sum of 500 Rs to a pregnant mother for the first two live births. 2) Self- help movement in Andhra Pradesh: women to participate in programmes like family welfare and improve educational and nutritional status of their children

POVERTY IN INDIA
No. of poor people in India in 2011-12 = 269.7mn How is it determined??!!!

POVERTY LINE TRENDS

Year 1969 1973-74 1999-2000 2004-05 2004-05 2009-10 2011-12 RURAL URBAN per capita per day (Rs.) per capita per day (Rs.) 0.67 0.83 1.63 10.9 12.27 14.89 22.43 27.2 1.90 15.13 18.63 19.29 28.65 33.33

35.00

30.00

25.00

20.00

RURAL per capita per day (Rs.) URBAN per capita per day (Rs.)

15.00

10.00

5.00

0.00 1969 1973-74 1999-2000 2004-05 2004-05 2009-10 2011-12

Determining Poverty Line

Year 1962-2011 2009 How was poverty line measured This was measured on minimum calories required by an individual and how much is required to consume that many calories Tendulkar Committee Dimensions other than food should also be considered-Education and Health. In all, It based its calculations on the consumption of the following items: cereal, pulses, milk, edible oil, non-vegetarian items, vegetables, fresh fruits, dry fruits, sugar, salt & spices, other food, intoxicants, fuel, clothing, footwear, education, medical (noninstitutional and institutional), entertainment, personal & toilet goods, other goods, other services and durables.

The Government has set up another committee in 2012 to come up with a better way of determining poverty line

Pitfalls in measurement
1979 : 1. Planning Commission-2200 calories vs. Indian Council of Medical Research (ICMR) -3,800 calories 2. National Sample Survey 1979-2009 : Only inflation was incorporated. For example, by 2005, a rural person needed Rs.19 a day to access 2,200 calories, while at the official figure of Rs.12, she could obtain only 1,800 calories. 2009: 1.Other measures and their sources are: nutritional poverty data come from the National Family Health Survey, housing poverty and disability data from the SECC, sanitation poverty from the 2011 census. 2. Rs.33-Adequate? Higher poverty line?!!!

Practical Utility?!!
YES -> NREGS- wages are set- atleast above poverty line. NO ->
universal GOI targeted Socio-Economic and Caste Census
Food Security Bill-67% people

 The SECC contains invaluable information on homelessness, manual scavenging, disability and a host of other deprivations, all of which are major constituents of poverty. Government can target the needy. Thus poverty line is mostly a measure to project a percentage of people as poor in a country and to compare it previous periods. Its utility is limited. To quantify poverty. They camouflage the intensity and agony of poverty.

Govt measures
Jawahar Gram Samridhi Yojana (JGSY) (Jawahar Rozgar Yojana (JRY)) 1 April 1999 Aim: development of rural areasInfrastructure: roads, hospitals Sustained wage employment: only to BPL Rs 1841.80 crore: 8.57 lakh works 200,000 km of new roads

Rural Housing-Indira Awaas Yojana (IAY)

Aim: 20 lakh housing units 13 lakhs in rural area about 7.98 lakh units were built in 1999-2000 1710.00 crores in 2000-01

Others:
access to basic services productive employment sustainable livelihoods sense of human security reduction of inequalities elimination of discrimination participation in the life of the community.

Issues
Governments budgetary allocations The forgotten poor: the Dalits (the untouchables), women and minority ethnic tribes Poverty line Resource Allocation

While Expected is
each one teach one, no discrimination no deterioration, lessen the population for a better job ration tomorrow, fulfillment of all the basic needs of each citizens, more job opportunities in rural areas to stop migrations, strict action on illegal assessment of farms to build massive cities. Restore lost dignity to farming as living

References
http://rameco.myweb.uga.edu/research.html#dissertation http://in.answers.yahoo.com/question/index?qid=201208010 83009AAbpFSg http://www.poverties.org/poverty-in-india.html http://www.researchersworld.com/vol4/issue2/Paper_10.pdf http://www.hindustantimes.com/businessnews/demystifying-indian-