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Poverty and inequality

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MANISH JANGIR
MANISH JANGIR

The document defines and discusses different aspects of poverty. It defines absolute and relative poverty, with absolute poverty referring to lack of means to meet basic needs and relative poverty considering social and economic status compared to others. It discusses the poverty line as the minimum income level required to afford life's necessities, and how the World Bank adjusted the international poverty line over time. It provides statistics on global and regional poverty rates. For India, it details how the poverty line was originally calculated and varies between states, with some below 10% and others above 40%. It also discusses inequality, the Gini coefficient measure of inequality, and how India's Gini index and inequality has risen in recent decades.

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Poverty and inequality
POVERTY Poverty is general scarcity, dearth, or the state of one who lacks a certain amount of material possessions or money.
Absolute & Relative Poverty Absolute Poverty refers to the lack of means necessary to meet basic needs such as food, clothing and shelter. Relative Poverty takes into consideration individual social and economic status compared to the rest of society.
Poverty and inequality
Poverty Line the estimated minimum level of income needed to secure the necessities of life. First introduced in 1990, a dollar a day poverty line measured absolute poverty by the standards of the worlds poorest countries. The World Bank defined the new international poverty line as $1.25 a day in 2008 In October 2015, they reset it to $1.90 a day.
Poverty line in India: In 1978 It was stipulated that the calorie standard for a typical individual in rural areas was 2400 calorie and was 2100 calorie in urban areas. The poverty line was originally fixed in terms of income/food requirements in 1978. Then the cost of the grains (about 650 gms) that fulfils this normative standard was calculated. This cost was the poverty line. In 1978, it was Rs.61.80 per person per month for rural areas and Rs.71.30 for urban areas.
Calorie Distribution in India 0 500 1000 1500 2000 2500 3000 3500 4000 Required Calories Received Calories Rural Poor Rural Wealthy Urban Poor Urban Wealthy
Poverty Statistics Almost half the world over three billion people live on less than $2.50 a day. The World Bank forecasts that 702.1 million people were living in extreme poverty in 2015, down from 1.75 billion in 1990. Of these, about 347.1 million people lived in Sub- Saharan Africa (35.2% of the population) and 231.3 million lived in South Asia (13.5% of the population
Poverty and inequality
Poverty in Indian States India has the worlds largest number of poor people in a single country More than 75% of poor people reside in villages The poverty level is below 10% in states like Delhi, Goa, and Punjab etc whereas it is below 50% in Bihar (43) and Orissa (47). It is between 30-40% in Northeastern states of Assam, Tripura, and Meghalaya and in Southern states of Tamil Nadu and Uttar Pradesh.
Poverty and inequality
Inequality Economic inequality, also known as income inequality and wealth inequality, is the difference found in various measures of economic well-being among individuals in a group, among groups in a population, or among countries.
Causes of Economic Inequality (i) Wages are determined by labor market (ii) Education affects wages (iii) Growth in technology widens income gap (iv) Gender does matter (v) Personal factors
Kuznets Curve
Gini Coefficient The most popular measure of inequality is the Gini coefficient. If all individuals have the same consumption (or income), then the Gini has a value of 0, perfect equality. If one individual has all the consumption, the Gini has a value of 1 , perfect inequality.
Note: An average value of Year 2008, 2009 and 2010 is taken 0 5 10 15 20 25 30 35 40 45 Gini Index Gini Index
Poverty and inequality
Inequality in India 2004-05 to 2011-12 Gini Index Rural : .26 to .28 Urban: .35 to .38 Inequality has been on the rise since 1990s 29 30 31 32 33 34 35 1990 1995 2000 2005 2010 Gini Index Gini Index
Poverty and inequality
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Poverty and inequality

  • 2. POVERTY Poverty is general scarcity, dearth, or the state of one who lacks a certain amount of material possessions or money.
  • 3. Absolute & Relative Poverty Absolute Poverty refers to the lack of means necessary to meet basic needs such as food, clothing and shelter. Relative Poverty takes into consideration individual social and economic status compared to the rest of society.
  • 5. Poverty Line the estimated minimum level of income needed to secure the necessities of life. First introduced in 1990, a dollar a day poverty line measured absolute poverty by the standards of the worlds poorest countries. The World Bank defined the new international poverty line as $1.25 a day in 2008 In October 2015, they reset it to $1.90 a day.
  • 6. Poverty line in India: In 1978 It was stipulated that the calorie standard for a typical individual in rural areas was 2400 calorie and was 2100 calorie in urban areas. The poverty line was originally fixed in terms of income/food requirements in 1978. Then the cost of the grains (about 650 gms) that fulfils this normative standard was calculated. This cost was the poverty line. In 1978, it was Rs.61.80 per person per month for rural areas and Rs.71.30 for urban areas.
  • 7. Calorie Distribution in India 0 500 1000 1500 2000 2500 3000 3500 4000 Required Calories Received Calories Rural Poor Rural Wealthy Urban Poor Urban Wealthy
  • 8. Poverty Statistics Almost half the world over three billion people live on less than $2.50 a day. The World Bank forecasts that 702.1 million people were living in extreme poverty in 2015, down from 1.75 billion in 1990. Of these, about 347.1 million people lived in Sub- Saharan Africa (35.2% of the population) and 231.3 million lived in South Asia (13.5% of the population
  • 10. Poverty in Indian States India has the worlds largest number of poor people in a single country More than 75% of poor people reside in villages The poverty level is below 10% in states like Delhi, Goa, and Punjab etc whereas it is below 50% in Bihar (43) and Orissa (47). It is between 30-40% in Northeastern states of Assam, Tripura, and Meghalaya and in Southern states of Tamil Nadu and Uttar Pradesh.
  • 12. Inequality Economic inequality, also known as income inequality and wealth inequality, is the difference found in various measures of economic well-being among individuals in a group, among groups in a population, or among countries.
  • 13. Causes of Economic Inequality (i) Wages are determined by labor market (ii) Education affects wages (iii) Growth in technology widens income gap (iv) Gender does matter (v) Personal factors
  • 15. Gini Coefficient The most popular measure of inequality is the Gini coefficient. If all individuals have the same consumption (or income), then the Gini has a value of 0, perfect equality. If one individual has all the consumption, the Gini has a value of 1 , perfect inequality.
  • 16. Note: An average value of Year 2008, 2009 and 2010 is taken 0 5 10 15 20 25 30 35 40 45 Gini Index Gini Index
  • 18. Inequality in India 2004-05 to 2011-12 Gini Index Rural : .26 to .28 Urban: .35 to .38 Inequality has been on the rise since 1990s 29 30 31 32 33 34 35 1990 1995 2000 2005 2010 Gini Index Gini Index