India’s Poverty Statistics
The planning commission has updated the poverty line and poverty ratio for 2011-12 based on the recommendation of Tendulkar committee using household consumer expenditure survey data 2011-12 data of 68th NSS (National Sample Survey). Accordingly, with the poverty line at all India level at monthly per capita expenditure of Rs. 816/- for rural and Rs. 1000/- for urban area. In 2004-05 poverty ratio was 41.8% and 25.7% in rural and urban respectively, while in the year 2011-12 poverty ratio was 25.7% and 13.7% in rural and urban respectively. The overall poverty ratio of the country has declined from 37.2% in 2004-05 to 21.9% in 2011-12.
Figure 1 – number and percentage of poor (poverty ratio in percent)
(Sources: Planning commission, estimation by Prof. Suresh Tendulkar method)
Table 2 Poverty line
Poverty Line
Committee Year Per-Capita Expenditure per day (Rs.) Per Capita Average Monthly Expenditure (Rs.) All India Poverty Line (Average month Expenditure per family of 5)
Rural Urban Rural Urban Rural Urban
Rangarajan 2011-12 32.4 46.9 972 1407 4760 7035
2009-10 26.7 39.9 801 1198 4005 5990
Tendulkar 2011-12 27.2 33.3 816 1000 4080 5000
2009-10 22.4 28.7 673 860 3365 4300
(Sources: Planning commission)
According to C.Rangarajan panel, who has suggested to the government that those spending more than Rs. 972/- in a month in rural area and Rs. 1407/- in a month in urban area in 2011-12 do not fall under the definition of poverty. Thus for a family of five, all India poverty line in terms of consumption expenditure as per the Rangarajan committee, would amount Rs. 4760/- per month in rural area and Rs. 7035/- in urban area.
If calculated on a daily basis, this gets converted into per capita expenditure of Rs. 32/- per day in rural area, and Rs. 47/- in urban area in 2011-12. According to Tendulkar methodology for 2011-12 the poverty line was Rs. 816/- in rural area and Rs. 1000/- in urban area, which if calculated on a daily basis comes out at Rs. 27/- per day in rural area and Rs. 33/- in urban area. The Tendulkar committee had fixed this at Rs. 4080/- and Rs. 5000/-.
Government of India’s Efforts for removing rural poverty since independence
Antyodaya Plan
Mahatma Gandhi National Rural Employment Guarantee Scheme
Small Farmer Development Plan
Drought Area Development Plan
Twenty point programme
Food for work programme
Minimum needs Programme
employ
Rural labour employement guarantee programme
Employement assurance scheme
Scheme for rural craftsman
Integrated rural development programme.
Jawahar gram samriddhi yojna
Swarna jayati gram swarozgar yojna
Sampurna gramin rojgar yojna
Mahilla samriddhi yojna
Integreted Rural development programme.
TRYSEM scheme
Rural housing program
Indira Awas yojna
Samagra Awas yojna
Pradhan Mantri Gramodya yojna
Pradhan Mantri Rojgar yojna
Agriculture income insurance scheme
National rural livelihood mission.
Government of India’s effort for removing urban poverty since independence
Emphasis on vocational education
Nehru rojgar yojna
Financial assistance for constructing houses
Prime minister’s rojgar yojna
social assistance program
Swarna jayanti shaheri rojgar yojna
National urban livelihood mission
Urban basic services for poor
Prime ministers integrated urban poverty eradication programme
Self-employment to the educated urban youth programme.
Recent initiatives
Government initiatives like “Pradhan Mantri Jan Dhan Yojna”, “Atal Pension Yojna”, Pradhan Mantri Suraksha Bima Yojna” for the development of each household and getting connected with formal financial source. So that target of reducing poverty can be achieved by collaboration between Government and financial system.
Role of financial sector/financial system/cooperatives to tackle the poverty in India
Economics development is the multi-dimensional process, the development of any country depend upon the optimum and well-organized use of available resources. India is suffering from three “P”. I.e. POVERTY, POPULATION, POLLUTION. Poverty in India still remains; overall poverty is 29.5% of the total population. Poverty is clearly declining but slowly and remains widespread. To achieve the faster growth or high growth and to attack the poverty, the policy makers must give the continuous efforts.
Banks are doing best in promoting the sustainable development, developing nation like India, require rapid growth so financial resources are key driver to implement various polices decided by Government of India to achieve the targets.
Nation’s financial system is the composition of formal and informal source of credit. Formal credit source includes money from Central Bank of India while informal credit source includes money from friends and relatives, landlords, chit funds, money lenders (Guruswamy, 2009). Recently micro finance became the favorite intervention for development the financial institutions because of unique potential, for financial inclusion, poverty eradication and financial sustain.
Credit Cooperatives societies and poverty reduction
Major portion of the nation still residing in rural area, which was dependent on agriculture, so to fulfill the require needs of people, they has to borrow money from the informal source with higher interest rates, and later on establishment of various credit cooperative societies, regional rural banks, and NABARD helps rural people for the development and to sustain the life of the rural people, still cooperatives are main route for rural people to access financial services, get lower cost inputs or raw material, get there product market, and they serve to secure the livelihood so that poor can benefits.
Credit Cooperative society is a charitable association of individual having common needs that join hands for the achievement of common economic interest with the aim to serve the interest of poorer section of the society through the principle of self-help and mutual help (SEWA bank in Ahmedabad). Cooperatives societies are useful for the economic and social structure of country since they use local initiative and local economic strength. To provide meaningful employment, alleviate poverty, provide dignity of work and life to a large population there has to be some planned intervention. So the cooperatives can be an alternate and a meaningful form of development activity with reference to India. (Kochar, 2014)
Credit Cooperatives societies are also one of the largest providers of micro-finance institutions. It provides various services like saving, credit, money transfer and insurance, housing facility, health facility to the poor people, and allowing them to access the financial support whenever they need to for the improvement of their livelihood. (Mishra, 2010) Cooperatives have played important role worldwide in poverty reduction and it will be continue, till the poverty does not become zero, and development can be achieved.
Conclusion
India is one of the vibrant economies on the back of healthy banking and insurance sector. To eradicate poverty in all form and dimensions including extreme poverty is the greatest global challenge and an indispensable requirement sustainable development. The papers concludes that development of financial institution can make an important contribution to economic growth and decreasing the poverty by increasing the saving rate and the availability of savings for investment, simplifying and encouraging inflows foreign capital, financial institution development can boost long run growth.