Causes of Poverty in India

Colonial Exploitation: Colonial rule in India is the main reason of poverty and backwardness in India. The Indian economy was purposely and severely de-industrialized through colonial privatizations. British rule replaced the wasteful warlord aristocracy by a bureaucratic-military establishment. However, colonial exploitation caused backwardness in India. In 1830, India accounted for 17.6 per cent of global industrial production against Britain's 9.5 per cent, but, by 1900, India's share was down to 1.7 per cent against Britain's 18.5 per cent. This view claims that British policies in India, exacerbated by the weather conditions led to mass famines, roughly 30 to 60 million deaths from starvation in the Indian colonies. Community grain banks were forcibly disabled, land was converted from food crops for local consumption to cotton, opium, tea, and grain for export, largely for animal feed.

Lack of Investment for the Poor: There is lack of investment for the development of poorer section of the society. Over the past 60 years, India decided to focus on creating world class educational institutions for the elite, whilst neglecting basic literacy for the majority. This has denied the illiterate population – 33 per cent of India – of even the possibility of escaping poverty. Thus, there is no focus on creating permanent income-generating assets for the poor people.

Social System in India: The social system is another cause of poverty in India. The social subsystems are so strongly interlocked that the poor are incapable of overcoming the obstacles.

India's Economic Policies: In 1947, the average annual income in India was US$439, compared with US619 for China, US$770 for South Korea. But South Korea became a developed country by the 2000s. License Raj prevailed with elaborate licenses, regulations and accompanying red tape. Corruption flourished under this system.

Over-reliance on Agriculture: In India there is high level of dependence on primitive methods of agriculture. There is a surplus of labour in agriculture. Farmers are a large vote bank and use their votes to resist reallocation of land for higher-income industrial projects. While services and industry have grown at double digit figures, the agriculture growth rate has dropped from 4.8 per cent to 2 per cent. About 60 per cent of the population depends on agriculture, whereas the contribution of agriculture to the GDP is below 18 per cent. The agricultural sector has remained very unproductive. There is no modernization of agriculture despite some mechanization in some regions of India.

High Illiteracy: Indian literacy rate rose almost tenfold during the British era. In 1947, India's literacy rate matched China's. However, in 2007, China reported at 91 per cent literacy rate versus 66 per cent for India. Now India suffers from about 35 per cent illiteracy among the adult population. Literacy levels among SC, ST and females are very low.

High Unemployment: There is high degree of underutilization of resources. The whole country suffers from a high degree of unemployment. India is marching with jobless economic growth. Employment is not growing, neither in the private sector, nor in the public sector. The IT sector has become elitist, which does not improve the poverty situation in the country. Disguised unemployment and seasonal unemployment is very high in the agricultural sector of India. It is the main cause of rural poverty in India.

Lack of Entrepreneurship: The industrial base of India has remained very slender. The industrial sickness is very widespread. The whole industrial sector suffers from capital deficiency and lack of entrepreneurial spirit.

Causes for Urban Poverty

The causes of urban poverty in India are:

 

1. Migration of Rural Youth towards Cities
   
2. Lack of Vocational Education / Training
   
3. Limited Job Opportunities of Employment in the Cities
   
4. Rapid increase in Population
   
5. Lack of Housing Facilities
   
6. No proper Implementation of Public Distribution System

 

References

Agrawal, AN (Latest Edition), Indian Economy, Biswa Pakashan, New Delhi.

Dutta, R and KPM Sundarama (Latest Edition), Indian Economy, S. Chand &

Sons, New Delhi.

Sen, Amartya (I 999), Development as Freedom, Oxford University Press, London.

World Bank (2000), Attacking Poverty, World Development Report 2000, ?

Washington