Causes of poverty - Concepts - Chapter 3 Class 9 Economics - Poverty as a Challenge - Economics

Causes of Poverty

• There were a number of causes for widespread poverty in India.
  
  
• Low level of economic development under the British colonial administration.
  
  
• The policies of the colonial government ruined traditional handicrafts and discouraged the development of industries like textiles.
  
  
• This resulted in fewer job opportunities and a low growth rate of income . This was accompanied by a high growth rate in the population.
  
  
• The two combined to 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. But the effects were limited to some parts of India.
  
  
• Unable to find proper jobs in cities, many people started working as rickshaw pullers, vendors, construction workers, domestic servants, etc.
  
  
• With irregular small incomes , these people could not afford expensive housing. They started living in slums on the outskirts of the cities and the problems of poverty, largely a rural phenomenon also became a feature of the urban sector.
  
  
• Another feature of high poverty rates has been the huge income inequalities.
  
  
• Major policy initiatives like land reforms aimed at the redistribution of assets in rural areas have not been implemented properly and effectively by most of the state governments.
  
  
• Many other sociocultural and economic factors also are responsible for poverty.
  
  
• Small farmers need money to buy agricultural inputs like seeds, fertilizer, pesticides, etc. Since poor people hardly have any savings, they borrow. Unable to repay because of poverty, they become victims of indebtedness.
  
  
• So the high level of indebtedness is both the cause and effect of poverty.