a k vasudevachary

7/28/2019 A K Vasudevachary

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Urban Poverty in India Some Issues*

Prof. A K Vasudevachary**We were taught to take care of our GNP as this will take care of poverty.Let us reverse this and take care of poverty as this will take care of the GNP

Mahbubul Haq

Prelude:

Urbanization is an inevitable part of the development process and the rate of

growth of urbanization is an important indicator of economic development.

Because economic development and urbanization are closely related to each

other as they do have cause and effect relationship with each other. Further,

various studies have revealed that there is a positive association between the

process of urbanization and per capita income.

Urbanization in a demographic sense is an increase in the proportion of the

urban population to the total population over a period of time or redistribution

of population and a change in the demographic balance between rural and

urban areas. (Sidhu Ms 2006)1 According to 2001 census, Indias urban

population is 285.4 millions and percentage of urbanization is 27.78 which is

lower than the developed countries where it varies between 51 to 100

percent (G Prakash etal, 2005)2

In the urbanization process, the rapid growth rate of urban population will

lead not only to disparities between urban and rural but also it causes several

other problems in cities such as overcrowded slums, shortage of drinking

water, broken drains incapable of channellising the rain water during the

monsoon, sanitation, health, unemployment and poverty. Literature reveals

that about 15 percent of the urbanites today do not have safe drinking water,

50 percent of the urbanites do not have proper sanitation facilities, and

leading to may vector borne diseases and 30 percent of urbanites live in

slums. (V Kumar 2008)3

**Paper Presented at Two day national seminar held on 24-25 th Jan 2009 at

OU College

for Women, Koti, Osmania University, Hyderabad-AP

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*Professor, Department of Economics, OU College for Women, Koti, O.U

Hyderabad-

1.Sidhu MS: Urban Poverty-Some Issues, Southern Economist, Vol 44 No 21,

2006

2.G Prakash etal. : Forecasting pace of Urbanization in Madhya Pradesh and

Policy

Implications for Sustainable development. Journal of Economic Policy and

Research

Vol 1, No 2, 2005

3.VijayaKumar J: Economic Transformation and Urbanization in India,

Southern

Economist, Vol 47 No 11, 2008

As stated above, among many a problems, urbanization has become a great

challenge in the context of urban poverty, which is largely an extension of

rural poverty in developing countries like in India. It is generally observed that

about 2/3rds of the poor are disproportionately located in rural areas, and the

remaining 1/3rd are located on the fringes of urban centers. In other words,

about 79% of the poverty groups are concentrated in the rural and the

remaining are in urban India. (Taneja & Myer 2008).4

Focus of the Paper:

In view of the above, in this paper, some issues related with urban poverty

have been discussed. The main target of the paper is to analyse the

estimates of incidence of poverty in urban and rural areas and also state wise

comparative analysis of poverty ratio between rural and urban areas in India.

Sources of data: The basic source of data is secondary. We culled the

information on estimates of poverty and State wise poverty data from

Economic Survey Report 2001-02. Also collected from world development

reports and five year plan documents of various years. Data collected for the

period from 1973-74 to 1999-00.

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Organization of the Paper:

This paper has been organized into two sections. Section one deals with the

estimates of incidence of poverty, Section two presents an in-depth analysis

of comparative poverty ratio among states in India. Section three concerned

with summary and conclusions.

Section- I

Empirical analysis:

Growth of Urban population:

Let us have a glance at growth of urban population during 1961 2001 both

in absolute and percentage terms. Table 1 depicts that the urban population

in the year 1961 was 78.94 million, which is increased to about 285.4 million

by 2001, it is accounted for 17.97 percent and 27.78 percent respectively in

respective years. It reveals that there is a four-fold increase in urbanization in

India. There is an estimation that more than 70 percent of India will live in

urban centers by the middle of 21 st century (Singh 2006). This increase in

urbanization has been mainly due to two factors. They are (a) Push factors

(b) Pull factors. Push factors are fragmentation of agricultural lands, level of

agricultural income, tenant farming etc and Pull factor are industrialization,

improvements in transportation, communication and higher education and

increasing

4.Taneja and Myer: Economics of Development of Planning, Vishal publishing

co, 2008

Employment opportunities in urban areas. Both the factors had played their

role in the migration of population from the rural to urban on a large scale

which result in several other problems as mentioned above, one among is

Urban Poverty.

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Table 1: Growth of Urban Population in India

(Million)

(1961 - 2001)

Year Total

Populatio

n

Urban

Populatio

n

%Share

of Urban

Populatio

n1961 439.2 78.9 17.91971 548.2 109.1 19.91981 686.2 159.7 23.31991 846.3 217.6 25.72001 1027.0 285.4 27.8

Source: Statistical Abstracts of Various years

Estimates of Incidence of Urban and Rural Poverty:

Poverty is a huge problem being faced by a large number of population in the

developing countries like India. As we aware, poverty line in India defined

based on the expenditure required for daily calorie intakes. As per the

records, at 2002-03 prices, this expenditure is estimated at Rs. 384/- per

capita per month in rural areas and Rs 442/- in urban areas. Accordingly

information furnished in table 2, and it shows that, over a period of time, both

in terms of percentage and absolute figures, the urban poverty is low

compare with rural poverty. In urban areas the percentage of poor population

was 49.0 while the same in rural was 56.4 in 1973-74. But the same figures in

1999-00 are 23.6 and 27.1 respectively. The over all poverty ratios were 54.9

in 1973-74 and 26.1 in 1999-00. It is clear from the above that there has

been steady decline of poverty both in rural and urban areas. This may be

because of the implementation of various welfare and poverty removal

programs by the Government and NGOs in a phased manner during the span

of planning period. However, as stated earlier, the incidence of poverty is less

in urban compare with rural. It may be due to the better education, health

and employment opportunities in urban areas.

Table: 2 Estimates of Poverty

(1973-4 to 1999-00)

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Year

(Million)

India

(Million)

Poverty

ratio

(%)

Rural

(Million)

Rural

Poverty

ratio

(%)

Urban

(Million)

Urban

Poverty

ratio

(%)

1973-4 321 54.9 261 56.4 60 49.01977-8 329 51.3 264 53.1 65 45.21983 323 44.5 252 45.7 71 40.81987-8 307 38.9 232 39.1 75 38.21993-4 320 36.0 244 37.3 76 32.41999-00 260 26.1 193 27.1 67 23.6Source: Economic Survey of India, 2001-02

Section II

State Level analysis of Urban and Rural Poverty:

As disclosed earlier, all India level poverty ratios presents that there has

been a continuous decline from about 55 percent in 1973-74 to 26 percent in

1999-00. Whereas the poverty ratio in urban areas is also declined from 49

to 24 percent during same period. Similarly, in rural India also, scenario is

same, but the percentage decline is less compare it with the decline in urban

poverty. Moreover, all India level poverty ratios are almost all tallied with the

rural figures during the period of study. Therefore, not only there is an urgent

need to probe into the causes for more poverty in rural than in urban but

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Table 3: States Listed under different levels of Poverty

In Urban Areas (1973-74 and 1999-2000)

1973-74

1999-2000

>50 % Poverty

Andhra Pradesh, Bihar, Gujarat,

Karnataka, Kerala, Madhya Pradesh NIL

Orissa, Rajasthan, Uttar Pradesh, Delhi

Lakshadweep

30 50% Poverty

Arunachal Pradesh Bihar, Madhya

Pradesh,

Assam, Goa, Haryana Orissa, Uttar

Pradesh

Maharashtra, Manipur

Meghalaya, Mizoram

Nagaland, Sikkim, Tamilnadu,

Andaman & Nicobar Islands

Tripura, Dadra & Nagar Haveli,

Pondicherry, West Bengal


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also to mitigate burden on urban areas, immediate attention is to be focused

to thin the level of rural poverty by establish and expand the non-farm

activities, since large number of people are living for their survival in rural

areas.

Table 3 depicts that the state-wise exposition on urban poverty at two

points of time i.e., 1973-74 and 1999-2000. For the sake of clarity, we

prepared the list of states fall under different Poverty levels at two points of

time. For this purpose, we arranged them under three categories. They are

(i) States are having more than 50 percent of urban poverty (ii) States are

having urban poverty between 30-50 percent (iii) and States with less than

30 percent urban poverty. This classification is based on the data on urban

poverty for each state, union territory and all India level for the years

mentioned above.

During 1973-74 Andhra Pradesh, Bihar, Gujarat, Karnataka, Kerala, Madhya

Pradesh,

Orissa, Rajasthan, Uttar Pradesh, Delhi and Lakshadweep are fall under first

category i.e., States are having more than 50 percent of urban poverty or 50

percent of their urban population are below poverty line. States under second

category are during 1973-74 Arunachal Pradesh, Assam, Goa, Haryana,

Maharashtra, Manipur Meghalaya, Mizoram

Nag land, Sikkim, Tamilnadu, Andaman & Nicobar Islands, Tripura, Dadra &

Nagar Haveli, Pondicherry, West Bengal where 30-50 percent of their urban

population are below poverty line. In the remaining states like Himachal

Pradesh, Jammu & Kashmir, Punjab and Chandigar had less than 30 percent

urban poverty.

During the 1999-2000 the maximum rural poverty observed in Orissa

(48.01%) followed by Bihar (44.30%) similarly urban poverty also maximum

in Orissa (42.83%) followed by Madhya Pradesh (38.44%). But the all India

figures in rural areas accounted for 27.09 percent and for urban area it is

26.10 percent. The ratio rural poverty is least in Delhi (0.40%) followed by

Goa and Daman & Diu with 1.35 % while the ratio in urban poverty is least in

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Jammu & Kashmir (1.98%) followed by Himachal pradesh and Punjab with

4.63 and 5.75 percentages respectively.

During 1999-2000 no single state is represented in first category while states

like in Bihar, Madhya Pradesh, Orissa, Uttar Pradesh 30-50 percent of their

urban population are below poverty line. Surprisingly, except these four

states in the remaining 28 states their urban population living below poverty

line is only 20 percent. It implies that as many as states are in a better

position during 1999-2000 compare with that of the year 1973-74. However,

twenty percentage of population is still living below poverty line is not a

healthy feature, therefore action on war foot has to be initiated to reduce

maximum extent with the public participation but not merely by announcing

welfare programs and pass the acts. At the out set, over a period of about

thirty years, population living below poverty line in urban areas has declined.

In contrary to it, though there is also a decline in rural areas but percentage

of decline in urban is more than in rural areas.

Summary & Conclusions:

Urbanization has become a great challenge in the context of urban poverty,

which is largely an extension of rural poverty in developing countries like in

India. It is generally observed that about 2/3rds of the poor are

disproportionately located in rural areas, and the remaining 1/3 rd are located

on the fringes of urban centers. In 1973-74 percentage of poor population in

urban and rural areas was 49.0 and 56.4 respectively. In fact by 1999-00

drastic change in poverty ratios i.e., 23.6 and 27.1 in urban and rural areas

respectively. The over all poverty ratios were 54.9 in 1973-74 and 26.1 in

1999-00. It is obvious from the above that there has been steady decline of

poverty both in rural and urban areas. Overall poverty ratios at all India level

are almost all tallied with the rural figures during the period of study.

Therefore, there is an urgent need to probe into the causes for more poverty

in rural than in urban and more attention has to be focused on establish and

expansion of non-farm activities in rural areas to lessen the burden on urban

areas. State level analysis shows that in twenty-eight states, their urban

population living below poverty line is only 20 percent. It implies that as

many as states are in a better position during 1999-2000 compare with that

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of 1973-74. At the out set, over a period of about thirty years, population

living below poverty line in urban areas has declined. In contrary to it, though

there is also a decline in rural areas but percentage of decline in urban is

more than in rural areas.

However, twenty percentage of population is still living below poverty line in

urban is not a good sign, therefore action on war foot basis has to be initiated

to reduce the number of people living below poverty level to the maximum

extent in urban areas. To fulfill above aim, mere launching and allocating the

funds for welfare programs is not at all sufficient because these should be

implemented by spending the allocated funds in toto with the public

participation, without diverting for other activities which are not related to

Urban poverty.

References:

1. Sidhu MS: Urban Poverty-Some Issues, Southern Economist, Vol 44 No

21, 2006

2. G Prakash etal. : Forecasting pace of Urbanization in Madhya Pradesh

and Policy implications for Sustainable development. Journal of

Economic Policy and Research Vol 1, No 2, 2005

3. Vijay Kumar J: Economic Transformation and Urbanization in India,

Southern Economist, Vol 47 No 11, 2008

4. Taneja and Myer: Economics of Development of Planning, Vishal

publishing co, 2008

5. Bose, Ashish (1978): Indias Urbanization 1901-2001, Second Revised

Edition, Tata McGraw Hill Publishing Co., Ltd., New-Delhi

6. Srinivasan V and Peter SMJ: Urbanization impact in Environment

KannabiranGlobalisation and Governance Third Concept Nov 2006

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