Page 156 - DMGT401Business Environment

Unit 7: Socio-cultural Environment

Since its independence, the issue of poverty within India has remained a prevalent concern. Notes
According to the common definition of poverty, when a person finds it difficult to meet the
minimum requirement of acceptable living standards, he or she is considered poor.
Millions of people in India are unable to meet these basic standards, and according to government
estimates, in 2007 there were nearly 220.1 million people living below the poverty line. Nearly
21.1% of the entire rural population and 15% of the urban population of India exists in this
difficult physical and financial predicament. The following chart presents the poverty situation:

Figure 7.1: Poverty Situation in India

Source: economywatch.com
The division of resources, as well as wealth, is very uneven in India – this disparity creates
different poverty ratios for different states. For instance, states such as Delhi and Punjab have
very low poverty ratios. On the other hand, 40-50% of the populations in Bihar and Orissa live
below the poverty line. The poverty ratios illustrated here are divided in two types: urban and
rural. Specific reasons for poverty vary in the urban and rural settings. 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, no production
of crops. Additionally, the Indian family unit is often very large, which can amplify the effects
of poverty. Also, the caste system still prevails in India, and this is also a major reason for rural
poverty – people from the lower casts are often deprived of a number of facilities and
opportunities. The government has planned and implemented poverty eradication programs,
but the benefits of all these programs have yet to reach the core of the country.
The phenomenal increase in the city populations is the main reason for poverty in the urban
areas of India. A major portion of this additional population is due to the migration of the rural
families from villages to cities. This migration is mainly caused by poor employment
opportunities in villages. This situation is exacerbated by the fact that there are few job
opportunities in the urban areas of India.
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 also a
Public Distribution System, which has been somewhat effective so far. Other programs include
the Integrated Rural Development Programme, Jawahar Rozgar Yojana, the Training Rural
Youth for Self Employment (TRYSEM) and to the credit of the government, other on-going
initiatives.

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