NCERT Class 9 Economics Chapter 3: Poverty as a challenge Economy Completes Notes Part 1

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Poverty as a Challenge

Facts – “Roti, Kapda Aur Makan”

  • One third of world’s poor in India

  • 1 in 11 child are working

  • Half of child deaths under 5 are due to malnutrition

  • UNICEF – 46% of all children below 3 years are too small, 47% are underweight & 16% are wasted

  • Poorest pockets - Rajasthan, MP, UP, Bihar, Jharkhand, Orissa, Chhattisgarh and West Bengal

  • In 2012 – 21.9% of India’s Population is BPL (by MDGs)

  • One in every four is poor

  • India as single largest concentration of poor in world

  • Global Wealth Report 2016 by Credit Suisse Research Institute: India is the second most unequal country in world with top 1% with 60% total wealth

Now in layman’s language we can say if we want to define poverty it will vary from country to country but in simple terms we can say the availability of the basic three amenities that’s the “Roti, Kapda aur Makan”, the food shelter and clothing are the essential parameters for any individual.

Now when it comes to india you have kind of huge population which lives below poverty line so nearly 1/3 of the world’s poor lie in India of which you have everyone in 11 child that is working and everyone and 4 percent that is poor half of the Child deaths under five years are due to malnutrition.

Now you have some of the pockets which are really poor we have the bimaro States on you can say Rajasthan, Madhya Pradesh, Uttar Pradesh, Bihar, Jharkhand, Orissa, Chhattisgarh and West Bengal are the major states which are affected by kind of poverty. However on the other side you have states like Maharashtra and you have Southern states which are flourishing well in comparison to the northern states.

Again India is only nation which is one of the single largest concentrations which has the single largest concentration for poor in the world and the 2016 world wealth report also explains that in India you have the most unequal distribution of land with nearly 60% of the total wealth accumulated by nearly 1% of the top people. So you have kin of huge income gap and income disparity that occurs.


  • No one definition - No Car in USA (Poverty); Car in India (Luxury)

  • Based on calories – 2400/day (Rural) & 2100/day (Urban) – Rural have more physical work

  • In 2000, by income – Rs. 328/month (rural) & Rs. 454/moth (urban)

  • In 2000, family of 5 income – Rs. 1640/moth (rural) & Rs.2,270/month (urban)

  • These conducted by National Sample Survey Organisation (NSSO)

Now if we move from one nation to another nation, there is no fixed one definition that, we can explain or that can help you understand poverty, a person who does not own a car in United states could be considered as a poor but on the other hand car in India is considered to be a luxury. So there is no one common definition that can explain throughout the world.

However there have been efforts to bring all the nations at one parity and explain the kind of minimum base for the availability or to define the poverty. So it was decided as $1.25 per day as a minimum requirement.

Now in India you have various definitions that have come up over the time period. It is started with consumption of calorie then it’s switched on to income so there has been kind of food consumption income then now the most recent ones are focused on the concept of social indicators the availability on the schooling facilities the health indicators and there is another term that we would discuss is the social exclusion.

Now based on calories it is believed that 2400 calories per day for rural area in 2100 for urban area would be the optimum since rural people require more of physical work to be done they require more of calorie consumption based on income it was marketed in 2000 as rupees 328 in rural areas per month and rupees 454 in urban areas per month.

Now for a family of five, it was given as rupees 1640 for rural areas and 2270 for urban areas these indicators were brought after an extensive survey done by NSSO that is the national Sample Survey Organization.

  • World Bank: International poverty line as purchasing power parity at $1.25 per day

  • 1971 – Dandekar & Rath – based on calories consumption

  • 2001 – Alkire - Multi-dimensional Poverty Index (MPI) - 6.25% weight to assets owned by a person & 33% weight on education years spent in school

  • Determined by income level & consumption

  • Now focus on social indicators – like illiteracy

  • Further on social exclusion – where poor is excluded from social equality (it is both cause & consequence)

Now as we said world bank define the international poverty line based on the purchasing power parity there is a PPP it was $1.25 per day in 1971 Dandekar and Rath defined based on the calorie consumption that we have talked about in 2001 multi-dimensional poverty index was given with said nearly 6.25% weight is given to the assets that a person owned and 33% given to the education and the years spent in school so this was another dimension based on which poverty was analyzed then it shifted on to income level and consumption later on as we said there were focus on social indicators and finally there was the idea of social inclusion that came up with said where poor is excluded from the social equality or not so identify the areas where you have poor who are excluded from the social equality and this social exclusion is considered both as a cause and a consequence.

So you can say because of the social exclusion there has been rise in the case of poverty and since a person is poor as a consequence is socially excluded from the society. So it is a kind of both cause and consequence for the same problem.

% population on less than $1.25 per day

Population under 1.25 dollars

Population under 1.25 Dollars

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You have this world map which shows the areas with less than a dollar 1.25 per day and you can see most of those marked in yellow are the well-to-do nations with less than 2% which record under such case.

However the areas marked in light blue are the areas of severe distress so you have kind of high problem where more than 40% of the people do not earn a kind of dollar 1.25 per day.