The role of corporate social responsibility in alleviation of poverty in India has become very crucial more specifically in rural India. Since independence, the constitution of India and Five-Year Plans specified social justice as the primary objective of the developmental strategies of the various governments. In all policy documents, emphasis is being laid on poverty alleviation and that various strategies need to be adopted by the government for the same. The call for corporate participation in 11th and 12th Five-Year Plan for sustainable development was a step ahead in this regard. The continued existence of poverty and human deprivation within affluent societies clearly shows that there is unequal distribution of resources. Hence, there is a greater need for redistribution of resources. Companies with positive approach through corporate social responsibility may play an effective role in reducing the increasing the gap between rich and poor.
Poverty can be defined as the inability of the people to attain a minimum standard of living. In other words, poverty is a relationship between the essential needs of people to survive and their ability to satisfy them. Those people who are unable to satisfy some of the basic needs such as food, clothes, shelter, sanitation, etc. are called poor. Poor people live without fundamental freedom of choice and face vulnerability to ill health, economic dislocation, and natural disaster. In words of Amartya Sen, Nobel Laureate in Economic Sciences, ‘Poverty is a deprivation of basic capabilities rather than merely a lowness of income.’
Tribal people, Dalits and labour class including farm workers in villages and casual workers in cities are still very poor and make the poorest class in India. 60% of the poor still reside in the states of Bihar, Jharkhand, Odisha, Madhya Pradesh, Chhattisgarh, Uttar Pradesh, and Uttarakhand. The reason for these states to be in the category of the poorest state is because 85% of tribal people live here. Also, most of these regions are either flood-prone or suffer from calamities. These conditions hamper agriculture to a great extent, on which the household income of these people depends. As per the 2020 Global Hunger Index (GHI), India was ranked 94th out of 107 qualifying countries. In 2012, it was on 97th rank. Though there is no shortage of food production in India, our nation still has the highest percentage, 37 percent, of underweight children under five and 39 percent are stunted (low height-for-age), 21 percent are wasted (low weight-for-height) and 8 percent are severely acutely malnourished (ASSOCHAM-EY report). Thirty years ago, India was home to one-fifth of world’s poor but now it is a home to one-third of poor people. Fifty-five percent Indians were classified as poor by the MPI methodology in 2005-06. India halved its poverty rate in the next 10 years. In absolute terms, the numbers of poor fell from 630 million to 360 million during this period. (Srinivas, 2018).
From November 2017, the World Bank started reporting poverty rates for all countries using two new international poverty lines: a “lower middle-income” line set at USD $3.20 per day and an “upper middle-income” line set at USD $5.50 per day. However, these lines, which are typical of standards among lower- and upper- middle-income countries, respectively, are designed to complement, not replace, the USD $1.90 international poverty line. India falls in the lower middle-income category. Using the USD $3.20 per day poverty line, the percentage of the population living in poverty in India was 60% in 2011. This means that 763 million people in India were living below this poverty line in 2011. However, according to the United Nations Millennium Development Goals (MDG) programme, 270 million people out of the 1.2 billion Indians, roughly equal to 21.9% of India’s population lived below the poverty line of USD $1.25 in 2011-12.
Causes of Poverty
- Poor agriculture – India is mainly an agricultural country. About 80% people of our country depend on agriculture. But agriculture is not profitable today. Farmers are poor and uneducated. Due to lack of irrigation facilities, most of the farming is rainfed. They do not get seeds and fertilizers in time. Thus, the yield is poor. So, poor agriculture is one of the causes of India’s poverty.
- Illiteracy – States with lower literacy rates have a greater number of poor people. Access to gainful employment becomes extremely difficult when people are not educated.
- Gap between the rich and the poor – The widening gap between the rich and the poor is also responsible for India’s poverty. The rich are growing richer. The poor are growing poorer. This economic gap between the two must be reduced. Our social system should be changed.
- Corruption and black money – there is corruption in every walk of life which is not in national interest. Black money causes the problem of rising prices. Black money adversely affects our economy. It causes poverty.
Effects of Poverty
- Nutrition and diet – Poverty is the leading cause of insufficient diet and inadequate nutrition. The resources of poor people are very limited, and its effect can be seen in their diet.
- Poor living condition and housing problems – People living in poverty don’t get proper living conditions. They must struggle to secure food, clothes and shelter. Many poor families live in houses with just one room.
- Unemployment – Poor people move from villages to towns and from one town to another in search of employment/work. Since, they are mostly illiterate and unskilled, there are very few employment opportunities open for them. Due to unemployment, many poor people are forced to live an unfulfilling life.
- Hygiene and sanitation – Poor people have little knowledge about hygiene and proper sanitation system. They are not aware of the harmful consequences of not maintain proper hygiene. The government is taking initiatives to make available clean and safe water, and proper sanitation system to them.
- Feminization of poverty – Women are the worst victims of poverty. Poverty effects greater number of women than men. The total of poor women outnumbers the total population of poor men. The causes include low income, gender inequality, etc. They are deprived of proper diet, medicine and health treatment.
- Child labour – In India, a large percentage of young boys and girls are engaged in child labour. Poverty stricken families are forced to send their children to work.
- Social tension – poverty is often characterized with income disparity and unequal distribution of national wealth between the rich and the poor. Concentration of wealth in the hands of few rick people along with exploitation of poor leads to social disturbances and revolts. Fair or even distribution of wealth leads an overall improvement in general standard of living of people.
| Indicator | 1977 | 1983 | 1987 | 1993 | 2004 | 2009 | 2011 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Gini Index | 33.2 | 32 | 32.5 | 31.6 | 34 | 34.9 | 35.4 | 34.7 | 34.7 | 35.9 | 34.5 | 33.8 | 33.8 | 32.8 |
| Poverty gap @ $2.15/day (2017 PPP) (%) | 22 | 18 | 14.5 | 12.9 | 10 | 7.6 | 4.7 | 3.8 | 3.6 | 2.5 | 2.2 | 2.8 | 3.4 | 2.7 |
| Poverty gap @ $3.65/day (2017 PPP) (%) | 45.6 | 41.4 | 37.8 | 35.9 | 31.5 | 27.5 | 21.2 | 19.1 | 18.7 | 15.7 | 13.1 | 13.4 | 15.2 | 13.3 |
| Poverty gap @ $6.85/day (2017 PPP) (%) | 68.7 | 65.9 | 63.4 | 62.1 | 58.3 | 54.8 | 48.9 | 47.3 | 46.7 | 43 | 39.3 | 37.9 | 40.4 | 38.2 |
| Poverty headcount ratio at $2.15 a day (2017 PPP) (% of population) | 63.5 | 56.7 | 50.9 | 48 | 40.6 | 33.5 | 22.9 | 18.8 | 18.1 | 13.4 | 11.1 | 13.2 | 15.5 | 12.9 |
| Poverty headcount ratio at $3.65 a day (2017 PPP) (% of population) | 89.1 | 86.6 | 84.2 | 82.6 | 77.5 | 72.5 | 63 | 61 | 59.9 | 54.4 | 46.9 | 44 | 48.2 | 44 |
| Poverty headcount ratio at $6.85 a day (2017 PPP) (% of population) | 97.8 | 97.4 | 96.7 | 96.7 | 94.7 | 93.3 | 90.3 | 88.9 | 88.7 | 85.4 | 82.7 | 80.7 | 83 | 81.8 |
| Poverty headcount ratio at national poverty lines (% of population) | … | … | … | … | 37.2 | 29.8 | 21.9 | … | … | … | … | … | … | … |
| Poverty headcount ratio at societal poverty lines (% of population) | 63.5 | 56.7 | 53.3 | 51.8 | 48.1 | 44.7 | 39.8 | 37.1 | 36.8 | 34.3 | 32.4 | 34 | 34.8 | 33.1 |
| Proportion of people living below 50 percent of median income (%) | 8.6 | 8 | 6.1 | 5.3 | 5.1 | 5.6 | 6.3 | 5.7 | 5.9 | 5.2 | 6.7 | 10.3 | 10 | 9.8 |
| Prosperity gap (average shortfall from a prosperity standard of $25/day) | 15.4 | 14 | 12.7 | 12.3 | 11.1 | 10.2 | 8.8 | 8.4 | 8.4 | 7.7 | 7.2 | 7.2 | 7.6 | 7.2 |
| Income share held by fourth 20% | 21.4 | 21.6 | 21.1 | 21.2 | 20.6 | 20.5 | 20.6 | 20.2 | 20.3 | 20.1 | 21 | 22.5 | 22.3 | 22.5 |
| Income share held by highest 10% | 27.4 | 26.4 | 27.5 | 26.6 | 28.9 | 29.6 | 29.9 | 29.7 | 29.7 | 30.5 | 28.4 | 26.2 | 26.2 | 25.5 |
| Income share held by highest 20% | 41.9 | 40.9 | 41.7 | 40.9 | 43.2 | 43.8 | 44.2 | 44 | 43.9 | 45.1 | 43.5 | 41.6 | 41.9 | 41 |
| Income share held by lowest 10% | 3.5 | 3.6 | 3.9 | 3.8 | 3.7 | 3.6 | 3.5 | 3.6 | 3.5 | 3.5 | 3.4 | 3.2 | 3.2 | 3.3 |
| Income share held by lowest 20% | 8.3 | 8.5 | 8.7 | 8.9 | 8.6 | 8.4 | 8.2 | 8.4 | 8.4 | 8.2 | 8.2 | 7.7 | 7.7 | 8 |
| Income share held by second 20% | 12.3 | 12.6 | 12.4 | 12.7 | 12.1 | 12 | 11.8 | 12.1 | 12.1 | 11.7 | 12 | 11.9 | 12 | 12.2 |
| Income share held by third 20% | 16.1 | 16.4 | 16.1 | 16.2 | 15.5 | 15.3 | 15.3 | 15.3 | 15.4 | 14.9 | 15.4 | 16.2 | 16.1 | 16.4 |
Naman Jain 