Question

Discuss the causes of poverty in India.

Answer 1

Instructions:
Explain the causes of poverty in India: Rising population, low income growth, unemployment, rise in price level, and capital deficiency.

Solution:

1. Rising population:
   • India is the second largest populated country in the world after China. This leads to a situation wherein the amount of development becomes insufficient to satisfy the basic needs for the entire population in the country.
2. Low level and growth of income
   • Low level and growth of income indicates the low level of per capita income in the country. Now, what is per capita income? Per capita income refers to the average of the total income of people living in the country in a given time period.
3. Unemployment
   • Due to the lack of job opportunities, poor people would find it tough to earn the money required to satisfy their needs.
4. Low level of income growth
   • Low income and rising prices would force people to buy fewer essentials than they need. In other words, the purchasing power of people tends to decrease in the economy.
5. Capital deficiency
   • It means there is not enough money to build roads, railways, institutions, and industrial infrastructure in the country. This state of low capital formation is called a capital deficiency. The capital deficit also results in fewer jobs and lower income levels in the country due to lower production levels.