Poverty is not only an economic concept, it has a wider connotation. One could regard it as the failure of national economy to make full use of its human and material resources as well as of the concentration of economic power which creates vast inequalities in the distribution of national income.
It is difficult to define poverty for its connotation not only differs from country to country but also at different points of time within the same country. The concept of poverty undergoes change with the economic development of the country.
As defined by Gillin and Gillin, ‘Poverty is that condition in which a person, either because of inadequate income or unwise expenditure, does not maintain a scale of living high enough to provide for his physical and mental efficiency and to enable him and his natural dependents to function usefully according to the standards of the society of which he is a member’.
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Some economists have defined poverty in terms of ‘minimum needs’ which include, inter-alia, food, clothes, education, housing and health.
Generally, minimum physical quantities of different items of food, or more specifically calorie or nutrition requirements, to keep the body and soul together are determined.
The money income needed to acquire the physical quantities is taken as the per capita expenditure of the consumer for a particular base year.
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Families whose income (or expenditure) is less than the ‘critical level’—often termed as “the poverty line”—are classified as poor. This is what is generally called absolute poverty.
Another approach conceives poverty in terms of relative income. This approach envisages the estimation and comparison of income of bottom 5 or 10 per cent of population with that of top 5 or 10 per cent of the population.
In the Concept of Poverty edited by Peter Townshend, poverty has been defined as a system which includes a continuous fight for survival, unemployment, low wages, unskilled labour, absence of food supplies, insufficient possibilities of privacy, child labour, ruinous forms of escapism such as alcoholism etc.
Seebohm Rowntree has made a distinction between primary and secondary poverty. Those in primary poverty were defined as those whose income fell below what was required to purchase the absolute essentials of food, clothing, shelter etc. and those in secondary poverty were defined as those who through an inappropriate or inefficient use of their income—betting or drinking by the husband, ignorant housekeeping by the wife and so on—failed to acquire these essentials even though their income would have sufficed them to do so.
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The International Labour Organisation (ILO) has published reports on poverty in the developing countries. Poverty is the most terrifying reality facing us today. In 1972, 700 million people or 39 per cent of the population of developing market economy countries were destitute and suffering from severe malnutrition; 67 per cent of the population were seriously poor. Forty per cent of the population of the developing countries either have no work or do not have work that can provide adequate incomes.
In most of the developing countries the richest 10 per cent of households typically receive about 40 per cent of personal income, whereas the poorer 40 per cent receive about 15 per cent or less and the poorest 20 per cent receive about 5 per cent. In other words, the problem of poverty is also a problem of inequality.
The problem of poverty is generally viewed as a problem of lifting up the poor. But the fundamental prerequisite of lifting up the poor is the levelling down of the rich from the positions of affluence.