Poverty – Characteristics, Causes, Alleviation | Economics Class 11

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Poverty in NepalReference Notes | Commerce
Poverty in Nepal – Economics
For: Management Class 11

Meaning:
Generally, poverty means economically poor. Poverty shows inability weakness and helplessness of a person in his economic, social and political life. In other words, Poverty is a situation where people are deprive of basic needs, basic rights and basic opportunities for their livelihood.

Poverty line: The minimum amount of income required to meet the basic necessities of life is known as poverty.

Types of Poverty
There are two types of poverty. They are as follows:

1. Absolute poverty: The situation in which a person is unable to attain a standard of living such as food, cloth, shelter, health facilities, primary education, etc. is known as absolute poverty. In other words, absolute poverty refers to a situation in the poverty line. From 2005, the world band has defined whose income is les than US $ 1.5 per day as absolute poverty.

2. Relative poverty: The situation in which a person income to sustain life but which is low compared to rest of the community is known as relative poverty. It is concern with inequality of income distribution. The higher the inequality in income distribution, the higher will be the relative poverty and vice-versa. Relative poverty is used in a comparative sense.

Characteristics of Poor in Nepal
Poor are those persons who are unable to fulfill their minimum basic needs. It is estimated that 25.4 % people are poor in the year 2067/2068 in Nepal. Poverty may have different structures and characteristics in different areas. The main characteristics are as follows:

1. Low income:
The level of income of the poor is very low. The major source of income of poor is unskilled labour that they are compelled to sell at low wage rate. Most of these poor people earn less than 1.5 $ per day. So, the poor are unable to attain the daily expenditure.

2. Housing condition:
The housing condition of majority of poor is very bad. Due to the large family size, there is always over crowing in house hold. All family members have to live in a limited space and without electricity and other physical facilities.

3. Expenditure pattern:
The poor spend nearly all their incomes on consumption. They spend all most all their incomes on food in order to survive. Sometimes, they consume more than what their income is. In such situation expenditure is more than income. So, instead of saving, loan is required for consumption.

4. Lower educational status:
Majority of poor are illiterate. High illiteracy rate is either due to ignorance or poverty or both. They can’t get educational opportunity and they are not capable to provide education to their children.

5. Occupation:
The occupation of the poor is generally agriculture. Majority of the poor people do not have their own land. They are compelled to do work at low wage rate. Their income is always insufficient for their subsistence. So, some poor become beggars, garbage shifters, prostitutes etc.

6. Weak physical and mental condition:
The poor in Nepal are unable to get balanced diet and health facilities. They are illiterate and they don’t know the importance of nuritutional diet for strong and metal & physical condition. Hence, they are physically and mentally weak.

There are other characteristics of poor such as high gender discrimination, deprive from government facilities, high dependency ratio, low life expectancy etc.

Causes of Poverty:
Poverty is a multi-dimensional and complex problem various factors. Such as historical, social, political etc. are responsible for growing poverty in Nepal. Various efforts have been made to eradicate the poverty but poverty of Nepal is at high level which is 25.4 % up to the end of 11th plan. The following are main causes of poverty:

1. High population growth:
In Nepal, the growth rate of population (1.4 %) is very high as compared to the growth rate of the economy (4.4 %). Due to increase in population, there is also increase in the problem of unemployment and food scarcity. As a result, poverty is increasing year by year.

2. Law industrial development:
The growth to industrial development in Nepal is very low due to the lack of capital. There is lack of employment opportunities in other sectors except in agriculture sector. Population pressure on land is increasing which makes the Nepalese People poor and poorer.

3. Unemployment:
It is one of the important causes of poverty in Nepal. Agriculture provides only seasonal employment, only about (5 or 6 month in a year). The rest of the time, they have to be unemployed because there is lack of employment opportunity in other sectors. Thus, increasing unemployment rate results in an increasing poverty.

4. Inflation:
General increase in price level is called inflation. Continuous rising in level price, decreases the purchasing power of money which mainly affects the middle and low income group of the society. As a result, they are unable to maintain their daily lives.

5. Political instability:
Frequent changes in government, their plans, policies and programmes are very common in Nepal. Due to this instability in government, poverty alleviation programmes have been less effective. As a result, poverty in Nepal is increasing day b day.

6. Low utilization of local resources:
Various types of resources are available in Nepal but all of these resources are not being used properly. One the one hand resources are idle in nature and on the other hand, unemployment in increasing. As a result, poverty is increasing gradually.

There are other causes of poverty in Nepal, unequal distribution of income, inequality of opportunity, low rural development, and subsistence agriculture.

Remedial Measures of Poverty Alleviation:
The problem of poverty has been serious in Nepal. Poverty is standing as main hurdle (obstacles) in economic development of Nepal. The following remedial measures can be undertaken for poverty alleviation:

1. Increase in employment opportunity:
The best remedial measure for the reduction of poverty is to increase employment opportunities. The more the increase in employment opportunities, the more will be the reduction in poverty level. Establishment and development of industrial sector provides more employment opportunities.

2. Investment in human capital:
Adequate investment in human capital also plays a key role in poverty reduction. Therefore, investment should be made in different social services like education, health, sanitation, nutrition and so on. Investment in such human capital increases productivity and income of poor.

3. Women empowerment:
Special emphasis should be given for women education, health and employment. If women are educated, there will be control in population growth. Economic and social transformation is possible through women empowerment which helps to reduce the poverty level.

4. Increase in social security:
The poverty can be reduced by providing social security to the old and those who are unable to work. For the reduction of poverty, old, widow, disable allowance, etc. has been provided by the government to the people.

5. Control the over population:
Over population is the main cause of poverty inn developing countries like Nepal. Thus, government should launch programmes with participating couples which helps to reduce the birth rate.

6. Poor oriented programmes:
Poor oriented programmes like skilled training etc. should be implemented by the government and non-governmental sectors. These programmes increase the employment opportunities and income level which helps to reduce the level of poverty.

There are other remedial measures such as equal distribution of National income, development of rural infrastructure, increase in credit facilities to poor, implementation of appropriate economic policy etc.

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