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Causes of Poverty

Poverty can be caused by some of the following reasons:
  1. Low levels of skill and education
  2. Illness and infirmity
  3. Discrimination
The above three factors can be caused due to:
  1. Social, economic and political inequality
  2. Unemployment
  3. Social Exclusion
  4. Indebtedness
  5. Unequal distribution of wealth.
The sum of individual poverty is the aggregate poverty.
Economy wide problems can also be the factors causing poverty like:
  1. Lack of infrastructure
  2. Low capital formation
  3. Lack of demand
  4. Pressure of population
  5. Absence of social or welfare nets
Colonial rule undoubtedly is also one cause of poverty because they deindustrialized India and had a negative impact on the economy and the standard of living of the people of India. During the time 70% of our population was dependent on agriculture for livelihood and the British policies were such that farmers were hard hit due to the intermediaries. India also started exporting food grains and many died in the famine between 1875 and 1900.

Since the main aim of the colonial rule was to use India as a market for their finished goods, an exporter of raw material for their industries and to use our wealth to service their debts and to buy their ammunition, our wealth got plundered and left us impoverished. In 1957-58, there was a mutiny by our soldiers employed in the British army against the British. This was caused by the anger of our soldiers over the death of people due to hunger and the blatant looting of our natural resources by the British.

Since the primary occupation of the rural sector is agriculture, ownership of land is an important determinant of well being of people residing there. After independence land ceiling and redistribution has ensured quite a few tillers get to own the land that they till but still a vast section of our population is made up of small farmers whose land is less fertile and dependent on the rains. Due to the fast growth in population and no other means of employment, the land available per person has reduced to very small areas. The income got from these small areas of lands does not meet the requirements of a family. This is a major cause of poverty in our rural sector. There have been many instances of farmers committing suicide because they have been unable to pay back the loans availed by them due to crop or monsoon failure.

The people belonging to schedule castes and tribes do not get employment in the urban sectors because they lack the skill sets due to lack of access to education.

The urban poor, being those who have migrated from the rural sector to gain employment and couldn't. Industrialization has not been able to provide jobs for everyone. The urban poor also consist of casual workers who have no job security, limited skill sets, no savings and scarce opportunities. Unemployment is also a major factor of poverty and casual employment and under employment result in debt and increase poverty. Indebtedness is also a cause of poverty being sustained. A steep rise in the prices of essential commodities and the unequal distribution of wealth has been major causes of poverty in India. Over the years the gap between the rich and poor has increased.

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