The concept of gap between rich and poor exist since time immemorial and ever since man came into existence in this planet earth. It is the common phenomenon like the fatal plague prevailing across the globe without any exception, whether it is a developed or underdeveloped country. But percentage and volume may vary from country to country and perennial in nature.
God has given every one of us the same brain, same capabilities of thinking, same red blood and same normal activities. But the ideas emerging from the brain, thinking power and actions etc are of in different nature from man to man, state to state, country to country. The bottom line at the end is richer becomes richer and poor becomes poorer. Why this disparity?.
It is very hard to come to the conclusion or draw a line by any one on this particular subject in spite of several thesis, debate, analysis, studies and experiments. It is clearly visible in our day to day practical life to our naked eyes. This trend bound to continue unless some remedial steps are taken and efficient economic policy come into effect, which is far behind our imagination.
In the age of globalization, the gap between high and low income countries is not only persisting, but in many cases it is widening and alarming as the OECD (Organization for Economic Cooperation and Development)[1] has shown in its study of Luxembourg. While the existence of such a divide is unquestionable, its origins, structure, and consequences are not. Could one, for example, securely say that income gaps lead to conflict? Is it possible to relate intractability to this divide?
Poverty, Inequality and Welfare
Poverty: Poverty has been approached in both absolute and relative terms. “Absolute poverty” is a measurable quantity referring to a lack of the basic resources needed to maintain a minimum of physical health, normally calculated in calories or nutritional levels.
“Relative poverty” has a qualitative dimension. It refers to general standards of living in different societies, taking into account culturally sensitive interpretations of poverty, and variations between and within societies over time.
Inequality: For those concerned with social policies and economic growth, inequality is normally interpreted as lack of equality of condition, that is lack of achievement of any given welfare indicator (e.g. income, consumption) or any valuable attribute of a population. For example, the larger the difference in income between a country’s rich and poor, the larger the inequality. Note that reduction of poverty levels within any given society may not imply a reduction of inequality, because all classes in society may benefit simultaneously from economic growth, keeping the same proportion among them. While it seems clear that inequality is undesirable, there is a great deal of debate over the desirability of total equality. One debate over equality questions is the meaning and value of concepts such as class, status, power, and authority. These cannot, it is argued, be completely equalized without suppressing other values such as personal freedom and individualism.
Welfare: It has a much broader meaning, referring to the general state of well-being that an “entity” enjoys. Here, “entity” can be taken as a person or as a state, thus one can speak in terms of “personal well-being” or “welfare of the state.”
Economic Logic and the Development Discourses
According to Kuznets 1955 postulate, in the early stages of economic growth in developing countries, inequality will tend to worsen, while at later stages there will be a better distribution of income. Inequality and poverty could be tackled by efficient economic policy in other words by rational development as opined by Kuznet.
4 Main Causes of Poverty in India
Four Main Causes of poverty in India are as follows:-
According to Ragnar Nurkse, who pinpointed the problem of the vicious circle of poverty in India that country is poor because it is poor. Low level of saving reduces the scope for investment, low level of investment yields low income and thus the circle of poverty goes on indefinitely.
Rural poverty is a multi-dimensional social problem and its causes are varied
They are as follows:
1.Climatic factors:
Climatic conditions constitute an important cause of poverty. The hot climate of India especially in case of ruralites reduces the capacity of people to work resulting severe impact on production. Besides natural calamities like frequent flood, femine, earthquake and cyclone cause heavy damage to agriculture. Also absence of timely rain excessive (Athivrshti) and deficient (Anaavavrshti) of rain severely affect agricultural production
2. Demographic factors:
The following demographic factors are accountable for poverty in India:
a).Rapid Growth of Population:
The rapid growth of population not only aggravates the poverty of the people but also creates difficulties in the removal of poverty, which lowers the per capita income thereby tends to increase poverty. The growth of population exceeds the rate of growth in national income. The burden of this reduction in per capita income is borne heavily by the poor people. Population growth at a faster rate increases labor supply which tends to lower the wage rate.
b) Size of Family:
The larger the size of the family, the lower is the per capita income and thus the lower is the standard of living. Therefore size of the family has significant bearing on rural poverty. The persistence of the joint family system has contributed to the health and earning capacity of the ruralites.
3.Personal Causes:
1) .Lack of motivation:
Lack of motivation among some ruralites is an important cause of rural poverty. Some of them do not have a motive to work hard or even to earn something, which accounts for the poverty of the ruralites.
2).Idleness:
Most of the rural people are lazy, dull and reluctant to work and hence they rot in poverty.
4. Economic Causes:
(i) Low agricultural productivity:
Poverty and real income are very much interrelated. Increase in real income leads to reduction of the magnitude of poverty. So far as agricultural sector is concerned, the farmers are even today following the traditional method of cultivation, leading to low agricultural productivity, which in turn resulting rural poverty.
(ii).Unequal distribution of land and other assets:
Land and other forms of assets constitute sources of income for the ruralites.But unfortunately; there has been unequal distribution of land and other assets in our economy. The size-wise distribution of operational holdings indicates a very high degree of concentration in the hands of a few farmers leading to poverty of many in the rural sector.
(iii) Decline of village industries:
At present consequent upon industrialization new factories and industries are being set up in rural areas, Village industries fail to compete with them in terms of quality and price. As a result they are closed down. The workers are thrown out of employment and lead a life of miserable and poverty.
(iv) Immobility of labour:
Immobility of labour also accounts for rural poverty. Even if higher wages are offered, labourers are unwilling to leave their homes.The joint family system makes them lethargic and stay at home.
The ruralites are mostly illiterate, ignorant, conservative, superstitious and fatalistic. Poverty is considered as God-given, something preordained. All these factors lead to abysmal poverty in rural India.
(v) Lack of employment opportunities:
Unemployment is the reflection of poverty. Because of lack of employment opportunities, people remain either unemployed or underemployed. Most of these unemployed and underemployed workers are the small and marginal famers and the landless agriculture labourers.
5.Social Causes:
a).Education:
Education is an agent of social change and egalitarianism. Poverty is also said to be closely related to the levels of schooling and these two have a circular relationship. The earning power is endowed in the individual by investment in education and training. But this investment in people takes away money and lack of human investment contributes to the low earning capacity of individuals.
b).Caste System:
Caste system in India has always been responsible for rural poverty. The subordination of the low caste people by the high caste people caused the poverty of the former. Due to the rigid caste system, the low caste people could not participate in the game of economic progress.
A Shudra was not allowed to become a trader and a Vaishya could earn his bread only by trade.
Birth would decide their occupation and their economic fate.”Caste system acted as a springboard for class exploitation as per K.V.Verghese.With the result that the counterpart of the poverty of the many is the opulence of the few. The second is the cause of the first.
c).Joint family system:
The joint family system provides social security to its members.Some people take undue advantage of it. They live upon the income of others. They become idlers. Their normal routine of life consists in eating, sleeping and begetting children.
In this way poverty gets aggravated through joint family system
d).Social Customes:
The ruralites spend a large percentage of annual earnings on social ceremonies like marriages, death feast etc. As a result, they remain in debt and poverty.
e).Growing indebtedness:
In the rural sector most of the ruralites depend on borrowing from the money lenders and land-lord to meet even their consumption expenses.
Money lenders however exploit the poor by charging exorbitant rates of interest and by acquiring the mortgaged land in the event of non-payment of loans.
Indebted poor farmers cannot make themselves free from the clutches of money lenders. Their poverty is further deteriorated because of indebtedness. Such indebted families continue to remain under the poverty line for generation because of this debt trap.
Shekar moily
