Urban Poverty

India is a rapidly growing economy with an ever growing urban population. With the rise in urban population the urban areas in India have become a place to foster poverty and deprivation at a scale and extent previously unseen. It is estimated that by 2030, 590 million people will be living in Indian cities which is nearly twice the population of U.S.A. today. This figure indicates the extent of severity of the future of urban poverty in India. This report is an attempt at understanding the changing scenario of poverty in India and the various concepts and definitions associated with it. This report first summarizes the different definitions of poverty and affordability worked out by experts, government and international organizations. After

This concept measures poverty as to whether a household or an individual has access to enough resources to meet their needs. Thus, poverty is measured by setting up a benchmark of minimum, and based on that benchmark, people are classed poor or non-poor.

Another approach to poverty measurement is to find out if people have access to a specific type of good or facility. It can be food, or shelter, or health care, or education etc. in this case, poverty is to be measured beyond the conventional monetary measures.

Amartya Sen gave a broader concept of poverty. His argument is that poverty can be measured by how much capability an individual has to function in the society. Poverty arises when people are unable to address certain key capabilities, or have inadequate opportunities to health and education facilities, or insecurity, or the absence of rights such as freedom of speech.

Poverty Benchmarks at global level

The World Bank updated the poverty line at US $1.90 a day. Previously, in 2008, World Bank set the figure at US $1.25 per day, which was based on the 2055 purchasing-power-parity. The commonly used international poverty line in the past has been US $1 per

Inequality measures are collected for distribution of income, assets, land, tax payments etc. The simplest method of inequality measurement is to divide the population in quantile or deciles.

One of the most popular measure of inequality is Gini coefficient. The Gini coefficient has many efficient properties, like population size independence, mean independence, symmetry, and Pigou Dalton Transfer sensitivity. But it cannot easily be decomposed to show the sources of inequality.

Theil’s L and Theil’s T are two entropy measures. These two measures have the property of decomposability, that is, inequality can be divide in inter-zonal and intra-zonal inequality. Typically, at least 75% of inequality in a country is due to within-group inequality, and the remaining 25% to between-group differences.

Another class of methods to measure inequality is the Atkinson’s class of inequality measures.