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Discuss the main reasons for poverty in India

The main reasons of poverty are stated below:

1. Increase rate of rising population:

In the last 45 years, the population has increased at the whopping rate of 2.2% per annum. An average of approx. 17 million people are added every year to the population which raises the demand for consumption goods considerably.

2. Less productivity in agriculture:

In agriculture, the productivity level is very low due to subdivided and fragmented holdings, lack of capital, use of traditional methods of cultivation, illiteracy etc. The very reason for poverty in the country is this factor only.

3. Less utilization of resources:

Underemployment and veiled unemployment of human resources and less utilization of resources have resulted in low production in the agricultural sector. This brought a downfall in their standard of living.

4. A short rate of economic development:

In India, the rate of economic development is very low what is required for a good level. Therefore, there persists a gap between the level of availability and requirements of goods and services. The net result is poverty.

5. Increasing price rise:

Poor is becoming poorer because of continuous and steep price rise. It has benefited a few people in the society and the persons in lower income group find it difficult to get their minimum needs.

6. Unemployment:

One of the main causes of poverty is the continuous expanding army of unemployed in our country. The job seeker is increasing in number at a higher rate than the expansion in employment opportunities.

7. Shortage of capital and able entrepreneurship:

The much-required capital and sustainable entrepreneurship play a very important role in accelerating the growth. But these are in short supply making it difficult to increase production significantly.

8. Social factors:

Our country’s social set up is very much backward with the rest of the world and not at all beneficial for faster development. The caste system, inheritance law, rigid traditions and customs are putting hindrances in the way of faster development and have aggravated the problem of poverty.

9. Political factors:

We all know that the East India Company started lopsided development in India and had reduced our economy to a colonial state. They exploited the natural resources to suit their interests and weaken the industrial base of Indian economy. The development plans have been guided by political interests from the very beginning of our independence. 

10. Unequal distribution of income:

If you simply increase the production or do a checking on population cannot help poverty in our country. We need to understand that inequality in the distribution of income and concentration of wealth should be checked. The government can reduce inequality of income and check the concentration of wealth by pursuing suitable monetary and price policies.

11. The problem of distribution:

The distribution channel should be robust in order to remove poverty. Mass consumption of goods and food grains etc. should be distributed first among the poor population. Present public distribution system must be re-organised and extended to rural and semi-urban areas of the country.

12. Regional poverty:

India is divided by the inappropriate proportion of poor in some states, like Nagaland, Orissa, Bihar, Nagaland, etc. is greater than the other states. The administration should offer special amenities and discounts to attract private capital investment to backward regions. 

13. Provision for minimum requirements of the poor:

The government should take care of the minimum requirements, like drinking water, primary medical care, and primary education etc. of the poor. The public segment should make generous expenditure on the poor to provide at least minutest requirements.


Poverty is one of the formidable challenges faced by independent India. Chapter 3 of Class 9 Economics discusses the problem of poverty through examples and the way poverty is seen in social sciences. Poverty trends in India and the world are illustrated through the concept of the poverty line. Causes of poverty, as well as anti-poverty measures taken by the government, are also discussed. The chapter ends with broadening the official concept of poverty into human poverty. The notes which we have mentioned below comprise all the concepts mentioned in the chapter. While preparing the CBSE Class 9 Economics notes Chapter 3 – Poverty as a Challenge, we took help from subject matter experts. With these notes, students can understand every concept thoroughly, which will make the exam preparation easier. It is considered as the best study material to revise the entire chapter quickly.

  • Chapter 1 The Story of Village Palampur
  • Chapter 2 People as Resource
  • Chapter 4 Food Security in India

CBSE Class 9 Economics Notes Chapter 3 – Poverty as a Challenge


In our daily life, we see poverty all around us. They could be landless labourers in villages, people living in overcrowded jhuggis in cities, daily wage workers or child workers in dhabas. According to facts, in India, every fourth person is poor.

Two Typical Cases of Poverty

Poverty means hunger and lack of shelter, lack of clean water and sanitation facilities, and lack of a regular job at a minimum decent level. Poverty is considered as one of the biggest challenges of independent India. India would be truly independent only when the poorest of its people become free of human suffering.

Poverty as Seen by  Social Scientists

Social scientists look at poverty through a variety of indicators. Usually, the indicators are used to relate to the levels of income and consumption. But, now, poverty is looked through other social indicators like illiteracy level, lack of general resistance due to malnutrition, lack of access to healthcare, lack of job opportunities, lack of access to safe drinking water, sanitation, etc.

Poverty Line

The poverty line is a method to measure poverty based on income or consumption levels. Poverty line varies according to time and place. In India, the poverty line is determined through a minimum level of food requirement, clothing, footwear, fuel and light, educational and medical requirement, etc. These physical quantities are multiplied by their prices in rupees. In India, poverty is calculated on the basis of the desired calorie requirement. The accepted average calorie requirement in India is 2400 calories per person per day in rural areas and 2100 calories per person per day in urban areas. On the basis of these calculations, for the year 2011–12, the poverty line for a person was fixed at Rs 816 per month for rural areas and Rs 1000 for urban areas. The poverty line is estimated periodically (normally every five years) by conducting sample surveys carried out by the National Sample Survey Organisation (NSSO).

Poverty Estimates

In India, there is a substantial decline in poverty ratios from about 45 per cent in 1993-94 to 37.2 per cent in 2004–05. The proportion of people below the poverty line further came down to about 22 per cent in 2011–12.

Vulnerable Groups

Social groups vulnerable to poverty are Scheduled Caste and Scheduled Tribe. Similarly, among the economic groups, the most vulnerable groups are the rural agricultural labour households and urban casual labour households. According to a recent study, except for scheduled tribes, all the other three groups (i.e. scheduled castes, rural agricultural labourers and urban casual labour households) have seen a decline in poverty in the 1990s.

Inter-State Disparities

In India, the proportion of poor people is not the same in every state. Bihar and Odisha continued to be the two poorest states, with poverty ratios of 33.7 and 32.6 percent, respectively. Urban poverty is high in Odisha, Madhya Pradesh, Bihar and Uttar Pradesh. Kerala, Maharashtra, Andhra Pradesh, Tamil Nadu, Gujarat and West Bengal saw a decline in poverty. Punjab and Haryana have traditionally succeeded in reducing poverty with the help of high agricultural growth rates. Kerala has focused more on human resource development. In West Bengal, land reform measures have helped in reducing poverty. In Andhra Pradesh and Tamil Nadu, public distribution of food grains is responsible for the improvement.

Global Poverty Scenario

In China and Southeast Asian countries, poverty declined substantially as a result of rapid economic growth and massive investments in human resource development. In Sub-Saharan Africa, poverty declined from 51 per cent in 2005 to 41 per cent in 2015. In Latin America, the ratio of poverty has declined from 10 per cent in 2005 to 4 per cent in 2015.

Causes of Poverty

There are various reasons for widespread poverty in India.

1. Under British control, India had a low level of economic development. New policies of the colonial government ruined traditional handicrafts and discouraged the development of industries. like textiles. A low rate of growth and an increase in population combined make the growth rate of per capita income very low. With the spread of irrigation and the Green Revolution, many job opportunities were created in the agriculture sector. However, these were not enough to absorb all the job seekers.

2. Another feature of high poverty rates has been the huge income inequalities. One of the major reasons for this is the unequal distribution of land and other resources. In India, lack of land resources has been one of the major causes of poverty in India, but proper implementation of policy could have improved the lives of millions of rural poor.

3. Small farmers needed money to buy agricultural inputs like seeds, fertilizer, pesticides, etc. So, they used to borrow money and were unable to repay the loan because of poverty.

Anti-Poverty Measures

The current anti-poverty scheme is divided into two parts.

1 Promotion of economic growth

2 Targeted anti-poverty programmes

Since the eighties, India’s economic growth has been one of the fastest in the world. There is a strong link between economic growth and poverty reduction. Some of the schemes which are formulated to affect poverty directly or indirectly are:

1. Mahatma Gandhi National Rural Employment Guarantee Act, 2005 – It aimed to provide 100 days of wage employment to every household to ensure livelihood security in rural areas. It also aimed at sustainable development to address the cause of drought, deforestation and soil erosion. One-third of the proposed jobs have been reserved for women.

2. In 1993, Prime Minister Rozgar Yojana (PMRY) was started. The main aim of the programme is to create self-employment opportunities for educated unemployed youth in rural areas and small towns.

3. In 1995, Rural Employment Generation Programme (REGP) was launched. The aim of the programme is to create self-employment opportunities in rural areas and small towns.

4. In 1999, Swarnajayanti Gram Swarozgar Yojana (SGSY) was launched. The programme aims at bringing the assisted poor families above the poverty line by organising them into self-help groups through a mix of bank credit and government subsidy.

5. In 2000, the Pradhan Mantri Gramodaya Yojana (PMGY) was launched. Under this programme, additional central assistance is given to states for basic services such as primary health, primary education, rural shelter, rural drinking water and rural electrification.

The Challenges Ahead

In India, Poverty has certainly declined in India, but it still remains India’s most compelling challenge. Poverty reduction is expected to make better progress in the next ten to fifteen years. This can be achieved by higher economic growth, increasing stress on universal free elementary education, declining population growth, and increasing empowerment of women and the economically weaker sections of society.

To access the notes on geography, history and civics of Class 9, visit the CBSE Class 9 Social Science Notes page at BYJU’S. Stay tuned for more updates on CBSE and NCERT. Download the BYJU’S App and subscribe to the YouTube channel to access interactive Maths and Science videos.

Frequently Asked Questions on CBSE Class 9 Economics Notes Chapter 3 Poverty as a Challenge

What is poverty.

Poverty is a pronounced deprivation in well-being. Income or consumption poverty refers to a lack of monetary resources to meet needs.

Who are social scientists?

Social scientists study all aspects of society, from past events and achievements to human behaviour and relationships among groups.

What is ‘poverty line’?

The poverty line refers to that line which expresses per capita average monthly expenditure that is essentially required by the people to satisfy their minimum needs.

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