Meaning of Poverty

Poverty is a socioeconomic condition where people are not able to meet the basic necessities of life. Poverty is a dynamic concept. Basic necessities of life change with time and place. There was a time when food, clothing, and shelter were considered the basic necessities. Today, literacy, health, and participation in decisions that affect one's life are also taken into the list of basic necessities. Definition of poverty changes from country to country and from time to time.

According to the World Bank Organization,

"Poverty is hunger. Poverty is lack of shelter. Poverty is being sick and not being able to see a doctor. Poverty is not having access to school and not knowing how to read. Poverty is not having a job, is fear for the future, living one day at a time...Poverty has many faces, changing from place to place and across time, and has been described in many ways. Most often, poverty is a situation people want to escape. So, poverty is a call to action - for the poor and the wealthy alike - a call to change the world so that many more may have enough to eat, adequate shelter, access to education and health, protection from violence, and a voice in what happens in their communities."

UNHRC has defined poverty as "a human condition characterized by the sustained or chronic deprivation of resources, capabilities, choices, security, and power necessary for the enjoyment of an adequate standard of living and other civil, cultural, economic, political, and social rights."

Prof. Amartya Sen suggested a capability approach to poverty. He stressed focusing on the whole range of means available to achieve human capabilities such as literacy, longevity, and access to income.

The standard of life of the poor remains low. Though the level of income is generally considered a measure of the standard of living, but the level of expenditure is a more reliable measure of the standard of living. A person may be having enough income to meet the basic necessities. But if he is not willing to spend his income, he will remain poor.

Poverty can be absolute or it can be relative.

Absolute Poverty

This concept of poverty is based on the poverty line. Individuals or households living below the poverty line are considered absolutely poor. The poverty line is fixed at the minimum level of expenditure required for meeting the basic necessities of life.

Relative Poverty

In the relative poverty concept, whether a person is poor or non-poor is determined on the basis of the average standard of living of the society where s/he is living. So, this differs with region and time. As the economic conditions of countries vary. So, a person who is considered who is relatively poor in one country may be non-poor in some other country.

Poverty Line

The minimum amount of income/expenditure that is required to meet the basic necessities of life, is the poverty line. The individuals/households living below this threshold will not be able to fulfill their need of basic necessities, and are hence, poor.

On the basis of the poverty line, the population of a country can be categorized as

• chronic poor - always poor, usually poor
• transient poor - churning poor, occasionally poor
• non-poor - never poor

The World Bank has fixed the poverty line at $2.15 per person per day. This is based on 2017 PPP.

Poverty Line in India

• The first official poverty line in India was adopted in 1979 on the recommendation of the Y.K. Alagh Committee. The poverty line was based on calorie consumption (2400 calories in rural areas and 2100 calories in urban areas).
• From 1993 till 2011, the poverty line was based on the recommendations of the Lakdawala Formula. This poverty limit was chosen such that anyone earning more than s/he could afford more than 2400 and 2100 calories worth of food, clothing, and shelter in rural and urban areas respectively.
• The Suresh Tendulkar panel set a daily per capita expenditure benchmark of Rs.27 in rural regions and Rs.33 in urban areas respectively.
• The Rangarajan Committee increased the threshold to Rs.32 and Rs.47 respectively.

Why Poverty Line?

There are two reasons for choosing the poverty line:

1. to create policies that are tailored to the needs of the poor;
2. to determine if government programmes have been successful or unsuccessful over time

The population of a country living below the poverty line is called the BPL population also.

Poverty Statistics

Worldwide

World Bank statistics

Year	Number of People living in extreme poverty	Percentage of people living in extreme poverty
2010-11	1125 million	16%
2020-21	740 million	9%
2025-26	525 million	6%

India

Year	Incidence of Poverty (in rural)	Incidence of Poverty (in urban)
2015-16	36.6%	9.0%
2019-21	21.2%	5.5%

According to the UN, India has lifted 415 million people out of multidimensional poverty between 2005-06 and 2019-21.

Causes of Poverty in India

Social Causes	Caste system Illiteracy Law of Inheritance Gender inequality Lack of mobility of labour
Economic Causes	Unemployment and underemplyment Poor economic growth Too much dependence on agriculture and the agriculture sector is not performing well Inadequate infrastructure Inflation Inadequate industrialization Less availibility of per capita resources due to overburden of population Underutilization of natural resources Colonial legacy Jobless and non-inclusive growth
Administrative causes	Inadequate planning Corruption Poor implementation of various social welfare programmes Lack of commitment
Geographical and environmental causes	Overpopulation Degradation of natural resources such as agricultural land and water Uneven distribution of natural resources such as fertile land, forest, rivers, minerals, etc. Weather-related factors such as droughts, floods, tsunami, cyclones, etc.

Poverty Cycle

Lorenz Curve

• Lorenz Curve was developed in 1905 by an American economist Max Lorenz.
• It is a graphical representation of income/wealth inequality in an economy.
• In Lorenz Curve, the cumulative population percentage is shown on the x-axis and the cumulative percentage of income is taken on the y-axis. There is a 45° line which is considered the Line of Perfectly Equal Distribution (an ideal condition that does not exist). There is another line which is known as the Line of Actual Distribution, which is called the Lorenz Curve.
• The distance between the Line of Perfectly Equal Distribution and the Line of Actual Distribution represents the degree of inequality in the distribution of income and wealth. The farther the Line of Actual Distribution (Lorenz Curve) from the Line of Perfectly Equal Distribution, the more will be the degree of inequality, and vice versa.

Gini Co-efficient

• Gini Co-efficient is based on the Lorenz Curve. It is the ratio of the area between the Line of Perfect Distribution and the Lorenz Curve to the entire area lying below the Line of Perfect Distribution.

Gini Co-efficient = (A)/(A+B) in the figure given above

• Lorenz Curve was a graphical measure of inequality in the distribution of income and wealth whereas Gini Co-efficient is a mathematical measure.
• The value of Gini Co-efficient ranges between '0' and '1'. 
• '0' represent perfect equality while '1' represents perfect inequality.
• If it is expressed as a percentage, then its value will range between '0' and '100'.
• Gini Co-efficient should not be mistaken as a measurement of wealth, it is only a measurement of inequality in the distribution of income and wealth.
• The two countries 'wealthy' and 'poor' can have the same value of Gini Co-efficient as long as they have similar income distribution. So, it does not analyze absolute poverty, it analyzes relative poverty only.

Measurement of Poverty

The three commonly used poverty estimates are

1. Head Count Ratio
2. Poverty Gap Index
3. Squared Poverty Gap Index

Head Count Ratio

• It is the most commonly used poverty measure.
• It is defined as the proportion of the national population whose consumption expenditure is below the official threshold, i.e. the poverty line expenditure.
• It gives the proportion (percentage) of the population living in poverty.
• In India, the Head Count Ratio is computed from the National Sample Survey data. 

Poverty Gap Index (PGI)

• It measures the poverty gap, i.e., the mean distance of the BPL people from the poverty line. The higher the mean distance, the more effort the government would have to do to pull the poor out of poverty. 
• Unlike the Head Count Ratio which was more a quantitative measure, PGI is a qualitative measure
• So, the PGI is defined as the mean distance below the poverty line as a proportion of the poverty line where the mean is taken over the whole population after counting the non-poor as those having a 'zero' poverty gap.
• PGI indicates the average extent to which individuals fall below the poverty line.
• It is indicative of the intensity of poverty in the sense that it is sensitive to how far people are below the poverty line.
• It is based on the assumption that all poor are not in the same situation.

Squared Poverty Gap Index (SPGI)

• It is defined as a weighted sum of poverty gaps as a proportion of the poverty line.
• By squaring the poverty gap, more weight is assigned to the section of the population that has a higher poverty gap.
• As it is not easy to interpret, so it is not used widely.
• PGI is insensitive to policies that transfer resources among the poor, the SPGI addresses this lacuna of the PGI.
• SPGI is sensitive to transfers among the poor in the sense that a transfer from a less poor to a poor individual will reduce the index.

Multidimensional Poverty Index (MPI)

• MPI was developed by the UNDP in 2010.
• It measures the deprivation of poor people in areas of health, education, and living standards.
• The various countries are ranked accordingly.
• It is published by the Oxford Poverty & Human Development Initiative (OPHI) and the UNDP.
• It is released annually and is part of the UNDP's Human Development Report.

According to the Global Multidimensional Poverty Index 2022:

• 1.2 billion people (19.1%) live in severe multidimensional poverty in 111 nations of which 593 million (50%) are children under the age of 18 years.
• The developing area with the largest presence of multidimensional poverty is Sub-Saharan Africa (nearly 579 million), closely followed by South Asia.
• About 45.5 million poor individuals lack access to food, shelter, sanitation, and cooking fuel. They are primarily concentrated in India, with the remainder living in Bangladesh and Pakistan.
• India has by far the largest number of poor people worldwide at 22.8 crore followed by Nigeria at 9.6 crore.
• Two-thirds of these people live in a household in which at least one person is deprived of nutrition.

State-wise poverty status on the basis of the multidimensional poverty index:

Estimation of Poverty in India

1901: Dadabhai Naoroji

• Estimated poverty in his book 'Poverty and Un-British Rule in India'.
• Formulated poverty line ranging from Rs.16 to Rs.35 per person per year for different regions of India.
• Poverty line was based on 1867-68 prices.
• Poverty line, he suggested, was based on the cost of a subsistence diet consisting of rice or flour, daal, mutton, vegetables, ghee, vegetable oil, and salt.

1938: National Planning Committee

• Estimated poverty line ranging from Rs.15 to Rs.20 per person per month.
• The poverty line suggested by the National Planning Committee was also based on a minimum standard of living determined in accordance with the nutritional requirements.

1944: Authors of Bombay Plan

• The Bombay Plan authors were JRD Tata, GD Brila, and Lal Shri Ram.
• They suggested a poverty line of Rs.75 per person per year.

1962: Planning Commission Working Group

• In 1962, Planning Commission constituted a working group to estimate poverty nationally.
• It formulated separate poverty lines for rural and urban areas @ Rs.20 and Rs.25 per capita per year.

1971: Dandekar and Rath

• V.M. Dandekar and N.Rath made the first systematic assessment of poverty in 1971.
• It was based on the NSS data from 1960 to 1961.
• The poverty line suggested by them was 2250 calories per person per day in both rural and urban areas.
• On the basis of this the poverty headcount for rural was 40% while that for urban was 50%.

1979: Alagh Committee

• Prof. Y.K Alagh was the Chairman of a task force constituted by the Planning Commission.
• The task force constituted a poverty line for rural and urban areas on the basis of nutritional requirements.
• Two poverty lines were suggested - one for the rural at 2400 calorie-consumption per person per day and the other for urban at 2100 calorie-consumption per person per day based on 1973-74 prices.
• Poverty estimates for subsequent years were suggested to be calculated by adjusting the price level for inflation.

1993: Lakdawala Committee

• D.K. Lakdawala Committee was constituted to review the methodology for poverty estimation.
• The committee suggested that

1. consumption expenditure should be calculated based on calories consumption as earlier
2. state-specific poverty lines should be constructed and these should be updated using the CPI-IW in urban areas and CPI-AL in rural areas
3. discontinuation of 'scaling' of poverty estimates based on National Accounts Statistics

• 54.9% poverty was estimated in all India.

2009: Tendulkar Committee

• Planning Commission, in 2005, constituted an expert group to review the methodology for poverty estimation to address the following shortcomings the previous methods:

1. consumption patterns were linked to the 1973-74 Poverty Line Baskets of goods and services, while significant changes in the consumption patterns had taken place since 1973-74;
2. there were issues with the adjustment of price for inflation, both spatially and temporally;
3. earlier poverty lines assumed that health and education would be provided by the State and formulated poverty lines accordingly

• The Tendulkar Committee recommended the following major changes:

1. a shift away from calorie-consumption-based poverty estimation;
2. a uniform Poverty Line Basket across rural and urban India;
3. a change in the price adjustment procedure to correct spatial and temporal issues with price adjustment;
4. incorporation of private expenditure on health and education while estimating poverty

• The committee also recommended the use of a Mixed Reference Period (MRP)-based estimated as opposed to Uniform Reference Period (URP)-based estimated that were used in earlier methodsthe for the estimation of poverty.
• New poverty lines for rural and urban areas of each state were computed.
• It suggested two poverty lines:

1. For rural areas Rs.27 per capita per day;
2. For urban areas Rs.33 per capita per day

• It used the data based on 2004-05 prices.
• The poverty was estimated at 37.2% which was much higher than 21.8% esimate by the 61st Round of NSSO.
• The current official indicators of poverty in India are based on the Tendulkar Poverty Line. But this line has been the subject of repeated controversies with many observers criticizing it for being too low. The controversies led the UPA government to appoint the Rangarajan Committtee in 2012, which recommned higher rural and urban poverty lines in 2014.

2014: Rangarajan Committee

• The committee under the headship of C. Rangarajan was constituted in 2012 and it gave its report in 2014.
• Similar to Lakdawala Committee, it used a method of calculating urban and rural poverty separately.
• It took into account both food and non-food items of expenditure.
• It used the Modified Mixed Response Period (MMRP) method instead of the Modified Response Period (MRP).
• Poverty was measured on the basis of the monthly expenditure of a family of five (unlike the Tendulkar Committee which considered individuals for the measurement of poverty).
• Rangarajan Committee considered calorie, protein, and fat intake for the estimation of poverty.
• The Committee raised the cost of living per day to Rs.32 and Rs.47 for rural and urban areas respectively.
• According to the poverty line suggested by the Rangarajan Committee, 29.5% of India's population was in poverty.

Amartya Sen's Capability Approach on Poverty

• This approach focuses on the enhancement of the well-being of individuals by expanding their capabilities so that they may lead a life they value.
• Instead of encouraging welfare programmes, it favours empowerment initiatives.
• The approach consisting of the following elements:

1. Freedom to achieve well-being is of primary moral importance.
2. Well-being should be understood in terms of peple's capabilities and functionings.

Amartya Sen's Index of Poverty

• Sen developed his poverty index in 1976.
• It accounts for the extent and severity of poverty as well as level of inequality in a country.
• It based on

1. Head Count Ratio
2. Poverty Gap Index
3. Gini Co-efficient

S = H[I + (1 - I)G] where, S = Sen's Poverty Index H = Head Count Ratio I = Poverty Gap Index G = Gini Coefficient

Task Force on Elimination of Poverty

• The task force was led by the Vice-Chairman of NITI Aayog Dr. Arvind Panagariya.
• It was constituted in 2015.
• It suggested a roadmap for the elimination of poverty in the country.

Recommendation of the Task Force

Poverty Measurement

The task force suggested four options for the measurement of poverty:

1. Continue with the poverty line suggested by Suresh Tendulkar;
2. Switch to the Rangarajan or other higher rural and urban poverty lines;
3. Track progress over time of the bottom 30% of the population;
4. Track progress along specific components of poverty such as nutrition, housing, drinking water, sanitation, electricity, and connectivity

• Options 3 and 4 cannot replace the poverty line, they can complement the measurement of poverty using a poverty line. A poverty line between options 1 and 2 can be chosen.

Strategy to Combat Poverty

• The task force suggested that a strategy for combating poverty must rest on two legs:

1. sustained rapid growth that is also employment intensive;
2. making ani-poverty programmes effective

• Employment-Intensive Sustained Rapid Growth - sustained rapid growth works through two channels - first, by creating jobs that pay steadily rising real wages, and second, by generating additional revenues that will allow government to expand social expenditures at a faster pace. This can be achieved by

1. raising productivity in agriculture;
2. giving remunerative prices to farmers;
3. measures aimed at Second Green Revolution in rain-fed areas in general and eastern India in particular;
4. reforms of tenancy laws to help small and marginal farmers;
5. building safety nets to bring quick relief for farmers in times of natural disasters;
6. creating gainful employment opportunities in industry and services for landless workers and marginal farmers who wish to migrate to better paid jobs;
7. acceleration in the growth of organized labour-intensive sectors such as apparel, footwear, food processing, electornic and electircal applicances, other light manufacturers, construction, and retail trade;
8. creation of some Coastal Economic Zones (CEZs)

• Making anti-poverty programmes effective - making programmes such as PDS, MDMS, MGNREGA, and Housing for All more effective. For this, the task force suggested:

1. elimination of all multiple and ghost ration cards by taking biometric readings of beneficiaries at each PDS shop;
2. promoting efficiency by offering the beneficiaries a choice between cash transfer equivalent to the current implicit subsidy and continued subsidized in-kind purchases - it will allow individuals accepting cash transfer to purchase either from a PDS shop or in the open market which is significant to create healthy competition also;
3. continued increase in incomes complemented by persuasive and informative advertising campaigns that bring home to the people the importance of a balanced diet, even in the case of school children also, some improvements can be achieved through protein-rich diets in the MDMS;
4. improving convergence of MDMS with the school health programme by creating networks of medical colleges, home science faculties, and state MDMS steering and monitoring committees;
5. ensuring that schools have proper facilities to cook MDMS meals;
6. improving the quality of assets produced by relaxing the proportion of expenditures on materials and allowing the use of contractors in the material component;
7. more productive use of MGNREGA labour by allowing farmers to hire MGNREGA workers by paying 75% (or some other proportion) of the wages with the balance paid from MGNREGA wage funds;
8. considering the issue of restricting MGNREGA to around half of the present blocks nationwide because, during most years, workdays per beneficiary have averaged below 50 which calls for better targeting of the programme in favour of the poorest households;
9. to bring a better quality of houses and speed up the provision of Housing For All, the possibility of using pre-fabricated houses can be explored and the Socio-Economic Caste Census (SECC) may be deployed to identify the beneficiaries;
10. each Gram Panchayat may be asked to identify the five poorest families in the village and endeavour to lift them out of poverty, panchayat may ensure that these families get all government benefits

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Broad Issues

Measuring Poverty: What Should be the Future Course?

• Perceptions of what defines basic human needs vary widely according to income and socio-political beliefs of the observer.
• Therefore, views on where we must set the poverty line vary widely.
• This has repeatedly led to contentious debates on the poverty line in the media.
• We need to track progress in poverty reduction.
• We are also committed to such estimates under the SDGs recently adopted at the United Nations and supported by India.
• Income or expenditure is the best single summary indicator of the material well-being of the population. Having an official poverty line and therefore official poverty estimates helps concentrate the public policy discourse around an agreed set of numbers.

An Alternative: Track the Progress of the Bottom 30%

• If we did not want to commit to a poverty line, an alternative would be to track the economic progress of the bottom 30% of the population over time. Rising incomes of this group would imply declining poverty
• The World Bank has recently adopted this approach (it tracks the incomes of the bottom 40%)
• The main limitation of this approach is that it will not allow us to answer questions such as how far are we from eliminating poverty by how much have we reduced it.
• Any decision the government takes on the poverty line is likely to give rise to similar debate. Perceptions of what defines basic human needs vary widely according to income and socio-political beliefs of the observer. Therefore, views on where we must set the poverty line vary widely. This has repeatedly led to contentious debates on the poverty line in the media. Any decision the government takes on the poverty line is likely to give rise to a similar debate. We need to track progress in poverty reduction. We are also committed to such estimates under the SDGs recently adopted by the United Nations and supported by India. Income or expenditure is the best single summary indicator of the material well-being of the population.

Having an official poverty line and therefore official poverty estimates helps concentrate the public policy discourse around an agreed set of numbers. If we did not want to commit to a poverty line, an alternative would be to track the economic progress of the bottom 30% of the population over time. Rising incomes of this group would imply declining poverty

The World Bank has recently adopted this approach (it tracks the incomes of the bottom 40%). The main limitation of this approach is that it will not allow us to answer questions such as how far are we from eliminating poverty r by how much have we reduced it.

Does Socio-Economic Caste Census (SECC) offer an alternative?

• The SECC is useful for identifying potential beneficiaries of social programs such as affordable housing, electricity, water, and toilets but not for tracking overall poverty over time
• It does not collect information on the overall income or expenditure of the household
• Over time, there is also a high risk of household responses getting biased since the households know that their responses determine whether or not they receive benefits
• So far we have no experience with how this experiment would work out over time.

Socio-Economic Caste Census

SECC 2011 is a unique paperless Census. The enumeration of the data was done using over 6.4 lakh electronic handheld devices. Household data was taken from the National Population Register along with the Temporary Identification Number (TIN). At each stage, there was an opportunity for transparency and grievance redressal. A total of 1.24 crore claims and objections were received of which 99.7% have already been resolved. Gram Panchayats and Gram Sabhas were involved in this process, besides School Teachers and Data Entry Operators as enumerators. The districts and State Governments have carried out the SECC with the Ministry of Rural Development as the nodal Ministry. Ministry of Housing and Urban Poverty Alleviation carried out the survey in urban areas and the Registrar General, Census of India carried out the caste census.

The provisional socio-economic data for Rural India has been released today. The survey has been completed in all 640 districts. It is provisional as the final lists are being uploaded in some districts after addressing all the objections received. It is being released as its use in evidence-based planning for rural development and poverty reduction needs to be undertaken immediately. It provides very useful data on households regarding various aspects of their socio-economic status – housing, land-holding/landlessness, educational status, the status of women, the differently able, occupation, possession of assets, SC/ST households, incomes, etc. SECC provided for automatic exclusion on the basis of 14 parameters, automatic inclusion on the basis of 5 parameters, and grading of deprivation on the basis of seven criteria. The data addresses the multidimensionality of poverty and provides a unique opportunity for convergent, evidence-based planning with a Gram Panchayat as a unit. The data is an opportunity to make an evidence-based selection, prioritization, and targeting of beneficiaries in different programs.

The Ministry of Rural Development has taken a decision to use the SECC data in all its programs. SECC data would have meaningful use in Housing for all, Education and Skills thrust, MGNREGA, National Food Security Act, interventions for differently able, interventions for women-led households, and targeting of households/individual entitlements on evidence of deprivation, etc. The household data is also available for planners of programs at the State, district, Block, Gram Panchayat, and village levels. SECC provides an opportunity to simultaneously address the multi-dimensionality of poverty by addressing the deprivation of households in education, skills, housing, employment, health, nutrition, water, sanitation, social and gender mobilization, and entitlement. The use of the NPR TIN Number across programs affords an opportunity to track the progress of households over the years. SECC truly makes evidence-based targeted household interventions for poverty reduction possible. It paves the way for Mission Antyodaya to work simultaneously in addressing the poverty of households through a Gram Panchayat Poverty Reduction Plan. The Ministry of Rural Development, in consultation with States, is trying to implement a convergent, integrated poverty reduction plan with Gram Panchayats and deprived households as a priority.      

Key Findings from Rural India

s.no.	Aspect	Households
1.	Total Households in the Country           (Rural plus Urban)	24.39 Crore
2.	Total Rural Households	17.91 Crore
3.	Total Excluded Households (based on fulfilling any of the 14 parameters of exclusion – i. motorized 2/3/4 wheeler/fishing boat; ii. Mechanized 3 – 4 wheeler agricultural equipment; iii. Kisan credit card with credit limit of over Rs. 50,000/-; iv. Household member government employee; v. households with non-agricultural enterprises registered with government; vi. Any member of household earning more than Rs. 10,000 per month; vii. Paying income tax; viii. Paying professional tax; ix. 3 or more rooms with pucca walls and roof; x. owns a refrigerator; xi. Owns landline phone; xii. Owns more than 2.5 acres of irrigated land with 1 irrigation equipment; xiii. 5 acres or more of irrigated land for two or more crop seasons; xiv. Owning at least 7.5 acres of land or more with at least one irrigation equipment. )	7.05 Crore(39.39%)
4.	Automatically included (based on fulfilling any of the 5 parameters of inclusion – 1. Households without shelter; ii. Destitute, living on alms; iii. Manual scavenger families; iv. Primitive tribal groups; v. legally released bonded labour)	16.50 lakh 0.92%
5.	Households considered for deprivation	10.69 Crore
6.	Households not reporting deprivation	2.00 crore
7.	Households with any one of the 7 deprivation	8.69 Crore

Deprivation Data

D1.	Households with only one room, kuccha walls and kuccha roof	2.37 Crore 13.25%
D2.	No adult member in household between age 18 and 59	65.15  lakh 3.64%
D3.	Female headed household with no adult male member between 16 and 59	68.96 Lakh 3.85%
D4.	Households with differently able member with no other able bodied adult member	7.16 lakh 0.40%
D5.	SC/ST Households	3.86 Crore 21.53%
D6.	Households with no literate adult above age 25 years	4.21 Crore 23.52%
D7	Landless households deriving a major part of their income from manual labour	5.37 Crore 29.97%

Sources of Household income

1.	Total Rural Households	17.91Crore
2.	Cultivation	5.39 Crore 30.10%
3.	Manual Casual labour	9.16 Crore 51.14%
4.	Part time or full time domestic service	44.84 lakh 2.50%
5.	Rag picking, etc.	4.08 lakh 0.23%
6.	Non Agricultural own account enterprise	28.87 lakh 1.61%
7.	Begging/charity/alms	6.68 lakh 0.37%
8.	Others ( including government service, private service, PSU employment, etc.	2.50 Crore 14.01%

Characteristics of Poor Households

Generally, households with the lowest income per person tend to be large, with many children or economically dependent members. Over a typical year, the poor spend nearly all their income on consumption of one sort or another, and half of this consumption is likely to be in the form of food. Naturally, the relative prices of food staples (food grains, dals, oil, vegetables) are crucial to their welfare. Poor households generally invest in education for boys than for girls. The poor play little part in politics. In one sense they are disenfranchised. Of course, there are some exceptional cases. Crime, ill health, and lack of access to the poor are considered other correlates of poverty.

In many countries, poverty is correlated with caste and race. The scheduled caste and tribal people in India and the Blacks in the USA are classic examples.

The extent of poverty in a country depends mainly on two factors:

1. the average level of national income anddepends
2. the degree of inequality in its distribution.