Causes of Poverty

Causes of Poverty
The causes of poverty in India are nothing short of complex but a lot of progress has been made to tackle them. The economic reforms of 1991, despite spurring a huge growth of the economy, have left the country with terrible inequalities, within cities as well as between urban and rural areas. They were the best opportunity to seriously tackle the causes of poverty in India and more specifically rural poverty. With two thirds of the population living in rural areas and some 500 million poor, even urban poverty stems from the rural migrations to the city.
It is said that “a country is poor because it is poor”. Low level of saving reduces the scope for investment; low level of investment yields low income and thus the circle of poverty goes on indefinitely.
Poverty is a multi-dimensional social problem. Its causes are varied. They are as follows:

1. Climatic factors:
   Climatic conditions constitute an important cause of rural poverty. The hot climate of India reduces the capacity of people to work for which production severely suffers. Frequent flood, famine, earthquake and cyclone cause heavy damage to agriculture. Moreover, absence of timely rain, excessive or deficient rain affect severely country’s agricultural production
2. Demographic factors:
   The following demographic factors are accountable for poverty in India:
   Rapid growth of population:
   Rapid growth of population aggravates the poverty of the people. The growth of population exceeds the rate of growth in national income. Population growth not only creates difficulties in the removal of poverty but also lowers the per capita income which tends to increase poverty. The burden of this reduction in per capita income is borne heavily by the poor people. Population growth at a faster rate increases labour supply which tends to lower the wage rate.
   (ii) Size of family:
   Size of the family has significant bearing on poverty. The larger the size of family, the lower is the per capita income and the lower is the standard of living. The persistence of the joint family system has contributed to the health and earning capacity of the ruralites.