Over the last several decades, India has become one of the fastest growing economies in the world. But even with this impressive progress, poverty in India continues to be an enormous problem. A small percentage of people in India have benefitted from this growth, while the vast majority still struggle to meet their basic daily needs. This inequity is exacerbated by a long-standing social caste system in India that disproportionately affects women and children.

In this blog post, we’ll explain the complex causes of poverty in India, the consequences it has on so many of its people, and the work Outreach International is doing to help people lift themselves out of poverty, and into a life of prosperity and hope.

Understanding the Causes of Poverty in India

Poverty in India is a result of various overlapping factors, spanning a long history of social and economic issues. The social issues include a caste system that causes inequity among the citizens of India. People who are born into certain socioeconomic groups or ethnicities can find it more difficult than others to access education, healthcare, and employment opportunities. Economic issues include a history of financial pressure from foreign countries which makes the economy of India sensitive to external markets which are beyond its control.

Sumita sews beautiful garments using a machine she acquired from an organization that helps fight poverty in India.

Sumita shows her beautiful garment sewing work.

Outreach Project: Sumita accessed an Usha School Program sewing machine from Outreach’s Program Partner, Outreach India, in Feb, 2023.

Statistics and Facts

  • The September 2023 Global Poverty Update by the World Bank revealed that at the $3.65 poverty line, India accounts for 40% of the global poverty rate of 24.1%. (The World Bank)
  • Over a third of all people living in poverty in the world live in South Asia, which amounts to roughly 389 million people. (The World Bank)
  • In South Asia, the rate of extreme poverty, measured by the international poverty line of $2.15, increased by 1.9 percentage points to 10.5%. India accounts for almost 70% of this global change in extreme poverty. (The World Bank)
  • Between 2012 and 2021, 40% of the wealth created in India has been captured by just the wealthiest 1% of the population. (BBC)

Factors Contributing to Poverty in India

The complex causes of poverty in India lead to equally complex factors that perpetuate the problem. These include:

Limited Access to Education

Despite making strides in improving literacy rates in general, access to adequate education remains out of reach for many groups in India, especially for those who live in remote areas.

Unemployment and Underemployment

The uneven distribution of economic growth creates limited job opportunities in many geographic areas, especially among young people who are actively seeking employment.

Inadequate Healthcare Infrastructure

The healthcare that the government provides for people who live in poverty in India is inadequate in many geographic areas. Serious health issues, often related to childbirth, can go undertreated, leading to overwhelming debt and feelings of hopelessness.

Social Inequality

Discrimination based on social caste, gender, and ethnicity make it harder for marginalized groups to experience basic socio-economic advancement. This creates a cycle of poverty that passes these issues on to the next generation.

Technology bridges the divide, helping to fight poverty in India, like this 4G cell tower.

Outreach Project: A new 4G cell tower benefits Sumita and everyone in Khambesu Village.

Historical, Economic, and Social Factors of Poverty in India

India has dealt with a long history of colonization that led to the export of wealth and resources for generations. Although this issue is a part of India’s past, the legacy of uneven trade continues to put financial pressure on India’s poorest citizens. Also, like many economies of the world, social disparity makes it almost impossible for people who live in poverty to climb out of it alone.

The Cost of Poverty in India

The consequences of poverty in India are profound and far-reaching. These include:

Unequal Distribution of Wealth and Resources

The concentration of wealth among a small percentage of the population of India limits access to essential resources and opportunities for the majority of its citizens. According to the Harvard Business Review, the wealthiest 10% of people in India hold 77% of the nation’s wealth. It also states that as of 2023, there were 119 billionaires in India, whose wealth continues to grow at disproportionate rates.

Barriers to Receiving Healthcare

The social healthcare system in India ranks very low among other countries. Expert care and the most advanced treatments remain expensive, and so only those who can afford it have access to it. Those who live in poverty sometimes have to make the choice between health or debt. This can be especially difficult when it comes to the health of their children. This lack of access to quality healthcare is evident in the relatively high infant mortality rates.

Outreach International’s Impact in India: Community-Led Solutions to Change this Reality

It can be nearly impossible for people who live in poverty to solve their issues alone. Outreach International works tirelessly to empower people to help themselves. Our partners at Outreach India bring community groups together to learn to identify their unique poverty-related issues, and then mobilize to solve them.

Many people who live in remote areas in India must deal with a lack of adequate infrastructure. This means that there may be no central power grid, or regional sewage and water treatment system. People who live under these conditions must spend much time and effort fulfilling their basic daily needs. But with the help of Outreach facilitators, solutions can be found.

Nandabad, India Solar Water System   Woman using Nandabad, India Solar Water System Pump

Solar Water Systems

Until 2010, the citizens of Nandibadi had to walk a kilometer each day to collect water from a river. That year, they had a single spout well installed, which was considered a significant improvement at the time. Even then, however, people had to wait in line and take turns using the hand pump from what was their only water source. With the help of Outreach facilitators, they had a solar-powered water well and storage system installed. This improvement not only made life easier, but it freed up large amounts of time for people to spend making progress in other areas of their lives. (Read about the Nandibadi Solar Water System)

Solar streetlights bring a bright future to this small town in Inida.

Solar Street Lights

In Lelibadi, people stayed home after dark because of fear of predatory animals and the possibility of crime. There were no streetlights or electric grid to power them. The community-based organization mobilized to have streetlights installed, each powered by an individual solar panel. Now, the nights are brighter, and the community can gather together, socialize, and travel safely. (Read about the Lelibadi Solar Street Lights)

Adequate sanitation like this latrine is a pivotal step to ending poverty in India.

Safe Sanitation

Safe sanitation is a crucial factor in the health and wellbeing of a community. Illness from contaminated drinking water and unpleasant surroundings due to a lack of a sanitation system in a community would make life difficult for anyone. Community leaders in Kurumpeta successfully managed a latrine construction project that solved their sanitation issues. (Read about Solving the Sanitation Crisis)

Naika, with his wife, shows his disability card, which Outreach India help him acquire. Now he doesn't have to live in poverty in India.

Disability Inclusion

In Kunjibadi Village, Naika lost his leg in a road accident in 2016. This left him and his wife dependent on her income alone, which placed them well below the poverty line. With help from Outreach India, Naika learned that he was eligible for disability benefits. He prepared his documentation, visited the government offices, and now receives benefits that cover basic daily needs for the family. Naika and his wife feel empowered, and able to look to the future with hope. (Read about Disability Inclusion in Community-Led Development)

Help Outreach Break the Cycle of Poverty in india

When we all work to help fight poverty in India, girls like Usha can look to the future with a smile.

Usha will finish school soon and hopes to work for the government so she can help people.

How to Help

Poverty in India is a multifaceted and pervasive issue that affects millions of people. By understanding its root causes, addressing its consequences, and supporting initiatives that promote socio-economic empowerment, we can all help India find truly equitable prosperity.

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