Question

Define or explain the concepts.

1. Poverty

2. Poverty line

3. Absolute poverty

4. Relative poverty

Answer 1

1. Poverty refers to the inability to fulfill the basic necessities of life such as food, clothing, shelter and education. It is a situation in which people face severe destitution and suffer from misfortune and thus are insufficient to find basic subsistence level of living. Poverty is an age-old phenomenon in India and exists in both rural as well as urban areas.

2. Poverty line refers to the cut- off point or the imaginary line in terms of per capita expenditure incurred by the people to buy the basic necessities of life. The people lying below this cut-off point are considered as poor. This poverty line differs from country to country as each country is endowed with different resources and human capital.

3. Absolute poverty is the one which is expressed in terms of minimum calories needed to be consumed by a person per day. This minimum calorie intake in India is 2100 calories for urban people and 2400 calories for rural people per day. Those who are unable to earn an income to consume such minimum calories are considered as absolute poor. This type of poverty is generally found in developing and underdeveloped countries such as India and Pakistan.

4. Relative poverty is the one that is based on the comparison of one set of people having a low income with other set of people having a high income. Herein, the class of people having low standard of living are treated as poor (in relative terms) in comparison to the other class of people having high standard of living. This type of poverty is universal in nature and cannot be eradicated.