The Devastating Impacts of Concentrated Poverty - Research Paper

Introduction

Concentrated poverty designates extreme and high levels of poor neighborhoods devoid of any means of livelihood or income. Castaneda et al. (2016) argued that communities categorized by high poverty levels have social and economic variance due to their combined spatial and social seclusion. Concentrated poverty has significant impacts beyond the normal levels of "ordinary" poverty. Often people residing in regions with high levels of poverty maintain overtly and destructive behaviors and lifestyles prolonged by their poor living conditions and impoverishment. The mixture of social and spatial variables overtly of concentrated poverty fosters spatial placement to poverty challenges (Agarwal et al., 2017). The World Bank estimates that concentrated poverty levels measures based on household consumer expenditure analysis. A large percentage of Indians live in deplorable conditions, worsened by poor economic policies and continued rise of extremism. The paper is an opinion piece on concentrated poverty levels in India. The opinion will cover a historical perspective of poverty, the incidence of concentrated poverty, and a decline in economic progress in various parts of the country. The paper will provide a call for action to find a lasting solution to the rising problem.

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Historical Perspective

According to Castaneda et al. (2016), for over 200 years, British ruled India and intensified its control on major economic indicators, including production and agriculture. After achieving independence, the country enacted a five-year strategy aimed at alleviating the high poverty levels in the country, especially in rural areas. Before India gained its independence, Dadabhai Naoroji addressed poverty levels bringing forth the ideology of "Poverty Line." Dadabhai Naoroji applied the "jail cost of living" approach in calculating the poverty line in India (Castaneda et al., 2016). In 1979, the task Force on Projections of Minimum Needs and Effective Consumption Demand established by the government tried to address and measure the poverty levels in the country. Various parameters, including poor, very poor, and absolute poor, describe the nature and level of poverty in India. The rural areas have the largest number of poor people in India with a high poverty ratio (Agarwal et al., 2017). With the many regions currently facing drought, many people continue falling in the poverty bracket.

Thorat et al. (2017) maintained that as at the end of 2016, over 112 million Indians or approximately 43 percent of the country's population face concentrated poverty. With the country's major political, social, and economic instabilities, the 43 percent may face concentrated poverty levels forever (Agarwal et al., 2017). With the country facing unstable weather patterns and economic turmoil, concentrated poverty will gradually transmit to future generations. The whole scenario points to a vicious cycle of concentrated poverty levels of over 12 percent of the country's large population (Agarwal et al., 2017). Survey and analysis by the World Bank point that despite concerted efforts by the government since the early 1980s to address concentrated poverty levels in rural areas, many people remain poor. These groupings of people in rural areas remain under the chains of concentrated poverty due to various ecological, social reasons.

Primary Causes of Concentrated Poverty in India

Reasons for concentrated poverty remain a significant problem in suburban and rural areas. Castaneda et al., (2016) maintained that the rates of concentrated poverty vary from one region to another due to diverse social and economic reasons. There are various primary causes of concentrated poverty in India as discussed below.

High Population Pressure

Since 1991, India's population has seen a steady rise, a factor that continues to hinder any meaningful economic progress and achievement. As at the end of 2015, the country had a population of nearly 270 million people, with approximately 21 percent under the concentrated poverty level (Castaneda et al., 2016). In the same year, the World Bank approximated that over 172 million people live below the $1.90 per day. Considering that India adds approximately 18 million people annually, the country faces an uphill task to match the figures with real job opportunities (Castaneda et al., 2016). The measure shows extreme poverty levels. With the continued rise in population, the country faces an uphill task in achieving any meaningful economic achievement.

Under Employment and Unemployment

As the country experiences a surge in population growth, the number of unemployed people continue rising. The country faces disguised unemployment and educated unemployment with concentrated poverty reflecting on the sad state of national affairs(Castaneda et al., 2016). Despite some minor adjustments and progress in the agriculture, informal sector, and the formal sector, the high population in the country has put extreme pressure. The arising situation has left many without any economic activity (Breitkreuz et al., 2017). The informal and rural sectors account for India's labor market. The World Bank reported in 2010 that due to unproductivity and low pay, the two industries continue dominating in unemployment (Thorat et al., 2017). With these figures, attaining any meaningful progress in the sector is challenging.

Under-Developed Economy

India is economically under-developed with low critical industrial and business growth. The leading causes of under-development in the country include lack of structural change, corruption, economic inequality, and high reliance on agriculture (Thorat et al., 2017). Other major cause of under-development entails high population growth, injustice, child marriage, and unemployment. Despite making some progress since attaining independence, India has a low per capita income as compared to other world economies such as Japan and China. Due to its low per capita, India's economy characterizes an underdeveloped economy, a feature that continues to impoverish the poor.

Rural Economy

Thorat et al. (2017) argued that India stands as a rural economy, with over the country's 70 percent living in the rural regions. With over 46 percent of the rural economy constituting the national income, the country's economic fortunes remain unstable (Thorat et al., 2017). In addition to faulty and unrealistic economic reforms targeting the rural area, India's agriculture economy only serves to enrich the rich while the poor continue getting poor.

Faulty Economic Reforms

According to Breitkreuz et al. (2017) the government's market reforms and economic liberalization that started in the early 1990s have remained a dream to the realization of Western capitalism. The multiple economic reforms have only served the rich and super-rich, leading to extreme levels of inequality and the rise of influential individuals. The World Bank, in its 2016 Economic report on India's economic progress, argued that if the country can solve its inequality ratio, the country can remove over 92 percent of its citizens out of the concentrated poverty bracket (Castaneda et al., 2016). At the same time, the report argued that reducing the inequality gap by 15 percent could have the impact of lifting over 80 million out of concentrated poverty, especially in rural areas (Thorat et al., 2017). Through these, the country can set off on a strategic plan to address and end its concentrated poverty woes.

Besides the above factors, other national issues and features continue to push concentrated poverty levels high. These factors include corruption, unequal wealth distribution, gender inequality, and illiteracy. The World Bank argued that illiteracy in rural regions and especially among womenfolk continues to play a critical factor in maintaining concentrated poverty among the rural population. The situation has created a condition whereby population and poverty continue sustaining one another. The World Bank maintained that female empowerment plays an essential role in uplifting the community in various ways (Castaneda et al., 2016). Early marriages and increased childbearing responsibilities are putting extreme pressure on others, further leading to high poverty levels. At the same time, high corruption cases, especially within government departments and schemes, remain a widespread phenomenon that perpetuates concentrated poverty in rural and urban areas. The World Bank approximates that only 15 percent of the country's money achieves its target (Thorat et al., 2017). People enjoying high-level connections enjoy this money, depriving the people of basic needs, a situation that further increase concentrated poverty levels in the country.

Call to Action

Although economic policymakers continue giving credence to the trickle-down economics concept of the west, India does not need a capitalistic approach to its concentrated poverty levels. Breitkreuz et al., (2017) averred that India requires a comprehensive human progressive strategy to solve its general concentrated poverty levels. Firstly, India needs an economic blueprint that provides support to the millions of medium and small firms that can provide employment. Second, India's government requires good leadership and governance to end the rampant corruption that continues slowing down and eating away its welfare budget (Castaneda et al., 2016). Thirdly, the country needs to empower its women through healthcare and education to deal with concentrated poverty as perpetuated by the ever-increasing population. The above factors point to an urgent need to focus on the appropriate development structure. It must accept the fact that merely focusing on its Gross Domestic Product it will only promote further inequality that continues feeding concentrated poverty.

Conclusion

India's economic journey since independence is characterized by numerous mishaps that impacted and continue impacting on the country's poverty levels. With countless national factors supporting and perpetuating concentrated poverty levels, the country still has a long way to go to find a lasting solution. Various economic plans and strategies have derailed and perpetuated poverty levels in the country. No single economic blueprint has produced positive results since independence. What India needs is a call to action to accept the fact that it has to enact relevant policy plans that focus on human development instead of focusing on the trickle-down strategy. It must also empower its women, root out corruption, and focus on good governance to set itself on a clear path to economic recovery and eradication of concentrated poverty.

Reference

Agarwal, M., Atri, P., & Kundu, S. (2017). Foreign direct investment and poverty reduction: India in regional context. South Asia Economic Journal, 18(2), 135-157. http://www.ris.org.in/pdf/DP200_Manmohan_Agarwal.pdf.

Breitkreuz, R., Stanton, C. J., Brady, N., PattisonWilliams, J., King, E. D., Mishra, C., & Swallow, B. (2017). The Mahatma Gandhi National Rural Employment Guarantee Scheme: A policy solution to rural poverty in India? Development Policy Review, 35(3), 397-417. https://onlinelibrary.wiley.com/doi/pdf/10.1111/dpr.12220.

Castaneda, A., Doan, D., Newhouse, D., Nguyen, M. C., Uematsu, H., & Azevedo, J. P. (2016). Who are the poor in the developing world? The World Bank.

Thorat, A., Vanneman, R., Desai, S., & Dubey, A. (2017). Escaping and falling into poverty in India today. World development, 93, 413-426. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5619671/.