Question & Answer

What are the causes of poverty? Explain in at least 5 points


Following are the main causes of poverty:-

1. Increase rate of rising population:

In the last 45 years, the population has increased at the whopping rate of 2.2% per annum. An average of approx. 17 million people are added every year to the population which raises the demand for consumption goods considerably.

2. Less productivity in agriculture:



3. Less utilization of resources:

Underemployment and veiled unemployment of human resources and less utilization of resources have resulted in low production in the agricultural sector. This brought a downfall in their standard of living.

4. A short rate of economic development:

In India, the rate of economic development is very low what is required for a good level. Therefore, there persists a gap between the level of availability and requirements of goods and services. The net result is poverty.

5. Increasing price rise:

Poor is becoming poorer because of continuous and steep price rise. It has benefited a few people in the society and the persons in lower income group find it difficult to get their minimum needs.

6. Unemployment:

One of the main causes of poverty is the continuous expanding army of unemployed in our country. The job seeker is increasing in number at a higher rate than the expansion in employment opportunities.

7. Shortage of capital and able entrepreneurship:

The much-required capital and sustainable entrepreneurship play a very important role in accelerating the growth. But these are in short supply making it difficult to increase production significantly.

8. Social factors:

Our country’s social set up is very much backward with the rest of the world and not at all beneficial for faster development. The caste system, inheritance law, rigid traditions and customs are putting hindrances in the way of faster development and have aggravated the problem of poverty.

9. Political factors:

We all know that the East India Company started lopsided development in India and had reduced our economy to a colonial state. They exploited the natural resources to suit their interests and weaken the industrial base of Indian economy. Hence, the planning was of immense failure to handle the problems of poverty and unemployment.

10. Unequal distribution of income:

If you simply increase the production or do a checking on population cannot help poverty in our country. We need to understand that inequality in the distribution of income and concentration of wealth should be checked. The government can reduce inequality of income and check the concentration of wealth by pursuing suitable monetary and price policies.

11. The problem of distribution:

The distribution channel should be robust in order to remove poverty. Mass consumption of goods and food grains etc. should be distributed first among the poor population. Present public distribution system must be re-organised and extended to rural and semi-urban areas of the country.

12. Regional poverty:

India is divided by the inappropriate proportion of poor in some states, like Nagaland, Orissa, Bihar, Nagaland, etc. is greater than the other states. The administration should offer special amenities and discounts to attract private capital investment to backward regions. 

13. Provision for minimum requirements of the poor:

The government should take care of the minimum requirements, like drinking water, primary medical care, and primary education etc. of the poor.