How Does Poverty Affect Economic Growth?

Poverty rates are linked to the overall health of the economy. As the economy grows, the opportunities for employment and income growth. 

Higher-income levels and strong labor markets tend to help those families living in poverty move above the poverty line.

Efforts made to reduce global poverty by the government have been largely successful over the past few years. However, one of the highest costs is that poverty interrupts economic growth. 

Causes of Poverty in India

Exponentially growing population in India: Increasing population stands the main course behind most of the major problems faced by the country. Increasing population led to unemployment and lower per capita income.

• Illiteracy: Low Education or no education makes people take up labor jobs or jobs based on daily wages. And just because they are illiterate, they get paid very low compared to the amount of physical work done for the whole day. The increasing price of basic commodities makes it difficult for people below the poverty line to afford survival.

• Low rate of growth: Our economy is underdeveloped due to the low rate of growth. The national income is low compared to the population as the economy is a rural economy and agricultural income is insufficient.

• Social factors: The growth of the economy is hindered by social factors like caste system, inheritance, and succession, and other outdated traditions.

• Corruption: The subsidies provided by the government do not reach the underprivileged because of corruption. It stands as a great barrier to the eradication of poverty.

Effects of Poverty in India

1. Effect on health: One of the most disastrous effects that poverty has is on the overall health of the nation. The most dangerous health issue developing from poverty is malnutrition. 

• Effects on society: Poverty affects overall societal health as well. In a backdrop of unemployment, the poor people shift to criminal activities to earn money. Homelessness of the poor people affects child health, women safety, an overall increase in criminal tendencies. Families fail to meet the financial needs of the members and children.

• Effects on Economy: The total number of people living under the poverty line indicates whether the economy is powerful enough to generate enough jobs and comforts for its people.

• Increase in crime rate: Due to illiteracy and unemployment, poor and underprivileged people indulge in wrong practices such as prostitution, theft, and criminal activities such as chain snatching, etc.

• Stress: People suffer from a lot of stress due to lack of money which leads to deduction in the productivity of individuals, making poor people poorer.

• Child labor: Poor people send their children to work instead of sending them to schools because of poverty. Because the families fail to bear the burden of child/children.

• High child fatality: Every year around 1.4 million children die in India before even turning 5 years old. Our country is one of the highest child mortality rates. And the causes of death are malaria, diarrhea, pneumonia, diseases, and chronic malnutrition.

• Lack of education: According to a survey by UNICEF about 25% of children in India do not get an education. Percentage of girls are higher than boys in excluding from school. Because of lack of education chances of finding a living wage from employment in India is hopeless.

Measures to reduce poverty in India

• Agricultural growth and poverty alleviation: Agricultural growth has been recognized as the significant factor that adds to checked decrease neediness. Agricultural growth and poverty are inversely related to each other. Higher agricultural growth leads to a lower poverty ratio.

• Speedy Development of infrastructure: One of the important measures to generate employment opportunities for the poor and to boost productivity is the speedy development of infrastructure. The development of infrastructure involves the construction of roads, buildings, highways, ports, telecommunication, power, and irrigation. It involves mainly highly labor-intensive construction work.

• Accelerating economic growth: The government tried to impart various methods for increasing economic growth. They expected that the poor will be raised above the poverty line with the various growth measures. While efforts were made to increase economic growth but they fail as they applied capital-intensive technologies of the Western Countries. 

• Human resource development: Not only physical infrastructure development poverty can also be reduced by human resource development. Areas of educational facilities require better investment such as schools to promote literacy. HRD requires healthcare by public investment in dispensaries, primary health centres and hospitals.

• Economic Growth: Economic growth necessarily reduces poverty. The benefits of economic growth would trickle down to the poor and thus alleviate poverty in the economy. The encouraging employment effect of economic growth depends on the employment elasticity of output growth.

Efforts made by Ngo’s to reduce poverty

There are so many NGOs for education which is committed to providing education. NGOs play an important role in filling the gaps in the various socio-economic development schemes executed by the government. 

Non-Governmental-Organisation can ensure that the poorest of the poor in India get to experience sustainable growth and get access to education and employment and employment services.

 Ek Parivartan is committed to providing basic education and healthcare to underprivileged children. 

Ek Parivartan Foundation believes that whether you are addressing healthcare, poverty, population control, unemployment, or human rights, there’s a better place to start than education. 

Education is not only a means as well as a better life. It empowers an individual to earn a livelihood. 

It also increases one’s awareness from healthcare to appropriate social behavior to understanding one’s rights.

We as a Ngo trying to contribute in several ways to ensure India sees poverty elimination, sustainable growth, and empowerment of the downtrodden.

We are trying to alleviate poverty by providing education to the most underprivileged children in India to help them march ahead in life.