Concept of Poverty

Poverty can be understood in many ways. Simply speaking, poverty is a social phenomenon in which a section of the society is unable to fulfill even its basic necessities of life. The World Bank defines poverty as inability of people to attain a minimum standard of living. In another notion of poverty line, a critical threshold of income, consumption, or more generally access to goods and service is determined and below which individuals are declared to be poor. In recent definitions, poverty is not just a matter of low income; it is also a question of the poor having few economic opportunities, insecurity in the face of financial and other risks, lack of empowerment, lack of capabilities and freedom. Degree of poverty can be observed even in attitude, culture and environment of a society.

Types of Poverty

Absolute and Relative Poverty

Though poverty is a qualitative phenomenon, it can be classified into absolute and relative terms by using indirect tools of statistics. If the people do not have adequate nutrition, housing, and access to basic health and education, they are called absolute poor. It means absolute poor are those who are unable to fulfill their basic needs or they lie under a minimum specified level of income or consumption. As living standards rise and absolute poverty recedes, social concerns focus on those living in what is recognized as poverty relative to a country's average living standards. Thus, relatively poor are those whose income is below the average of others and above the absolute poverty in the line in the society.

  • Absolute Poverty
The term 'absolute poverty' refers to that the level of poverty which can not be compared between or among the citizens of nations. It is measured independently analyzing the variables of basic needs. It is defined as the situation in which citizens of a nation deprive from basic needs such as food, shelter, clothes, safe drinking water, sanitation, primary health, and basic education, permanent source of income and employment and productive land with them. Supply of these things is most essential for the survival of human beings but under this poverty one cannot fulfill those things as it is required for the subsistence living. People compelled to survive under absolute poverty cannot achieve 2100 calorie intake from their consumption items in a day.

  • Relative Poverty
The word 'relative' means related or based or compared with some variable or issues. Likewise, relative poverty refers to that state of poverty which is measured or accounted from the comparative study between or among interrelated economic variables. Basically, relative poverty is measure by making comparison in income, expenditure, saving, investment, purchasing power and living standard of the citizens living in a country in a particular unit of time or duration of time. The comparison may take place between person to person, family to family, society to society and even nation to nation.