Biz Resrch

7/27/2019 Biz Resrch

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Poverty And inequal ity.


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Inequality

Distribution of Income

Distribution of Wealth

Distribution of any other Attributes

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Poverty

Lack of Income

How much?

General condition of people who are badlyoff and encompasses many aspects of want

and disadvantages (Chambers)

What are these wants and disadvantages? A severe failure of basic capabilities (Sen)

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Absolute or Relative?

Something DefinitelyAbsolute

Adequate level of Food, Clothing and Shelter

Minimum Level of Nutrition

Whether Acceptable Level can be given AbsoluteMeaning independent of the Contours of the Society?

Ownership of Television?

Minimal Standards of Leisure?

Access to Scientific Education?Private Means of Transportation?

etc. etc.

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Two Reasons for Studying Distribution

- Income, Wealth , Poverty

Philosophical & Ethical Functional

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Philosophical & Ethical

Why Individuals should be treated

differently in terms of their access to life

time economic resource?

Answer : Personal Decisions Good or bad

They are poor because They had it

coming to them

In some cases it is true

But in most cases it is not so.

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Philosophical & Ethical

Unequal Treatment starts from Day1

Parental wealth, local environment, accessto utilities, etc.

To hold descendents responsible for the

sins of their ancestors is unfair. At the same time it is unfair to deprive the

parents of the right to bequeath their

children No way to resolve the dilemma at

philosophical level

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Functional aspects of Inequality

Functional and Personal Income Distribution

Distribution and Production Pattern

Relationship between past and future Distribution

Distribution on Savings and Growth

Motivations for savings Inequality over time Inverted U

Inequality, Tolerance level and Impact on futureTunneleffect

In an imperfect capital market if the distribution ofproductive ideas is loosely correlated with the distributionwealth or asset, ideas may not be implemented.

Distribution and Incentive

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Functional aspects of Poverty

Low income leads to low nutrition ( Wage affectsfood consumption)

Low nutrition creates low income ( Food consumptionaffects ability to work i.e. productivity)

Another Vicious circle of poverty

Lack of access to credit because of lack of collateral Collateral

- Insurance against the genuine failure of the project- Is a means to prevent intentional default on the part ofthe borrower

- The possibility of lost collateral reduces the incentive towalk away without repaying

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Poverty : Definitional Issues

Concern about Basic needs

Food, Housing and Clothing

A family may be deprived in one aspect, notin others

A family may be deprived in several

dimensions: Multiple deprivation

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Conflict In deciding parameters

Income or expenditure ?

Temporary or Chronic ?

Household or Individual ?


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Nutrition Based Poverty Line

Nutrition Based Poverty Lines are not Uncommon

Calorie Energy Input Resting ( Basic) Metabolism

Energy required for WorkSedentary WorkModerate ActivityHeavy Work

Other Nutrients: Protein, Vitamin etc.

Relationship Between Calorie and Other Nutrients

Nutrition Requirement Nutrition Cost at Low LevelAcceptable Expenditure

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Measurements

Inequality , Poverty and Human

Development

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Inequality Indicators

Range

Coefficient of Variation

Kuznet ratio

Lorenz Curve/ Lorenz Ratio/ Gini Coefficient

1) G1=Lorenz Ratio Pi the Cumulative Population Share

Qi the cumulative Income Share

Area Below the Lorenz Curve = {(Pi+1)-Pi))*(Qi+1)+(Q(i)}[ i= 0 to L-1]

L is total number of Income Classes ( Class Intervals)

G1= 1/(1/2)[(1/2)-Area Below the Lorenz Curve ] = 1-{(Pi+1)-Pi))*(Qi+1)+(Q(i)} [ i= 0 to L-1]

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Poverty Indicators

1)Poverty Ratio = ( Number of People Below PovertyLine=HC)/Total No. of People(=n) = Head Count Ratio =HCR =PR

2) Consumption Gap = Difference Between the per capitaconsumption of the Poor and the Poverty Line

= ( Z-yi) [i= 1,2,3----- to q ] [ yi< Z] = CG

Where, Z is the poverty line and yi is the income of ith poorpeople

= 1/q fi( Z-yi) [i=1,2,3----l] where l is number of classes

below poverty line ( For Group data)

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3) Income Gap Ratio = IGR= 1- ( Average Income ofthe Poor/ Poverty Line) = (p-yi )/p*HC

4) Poverty Gap Ratio = PGR=PR*IGR = n/N [1-(y pBar/y*)

Y pBar = average income of poor Y*= Poverty line If n increases PGR increases If IGR increases PGR increases

Sens Index ( For raw data) = SI Sens Index = PR*[ IGR+ (1-IGR)*LRP] Where, LRP

is Lorenz Ratio of Poor Persons

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Alternative Development Indicator: PQLI

Physical Quality of Life Index

1-100 Scale

Three Components

Life Expectancy (X1) at age ONE

100 Best Performance : Sweden ( 77 years in1973)

1 Worst Performance: Guinea Beasue ( 28 years in 1950)

Infant Mortality (X2)

100 Best Performance: Sweden ( 9 per 1000 in 1973)

1 Worst Performance: Gabion ( 229 per 1000 in 1950)

Literacy Rate (X3)

Percentage of Literacy 100---- 1

PQLI= (X1+X2+X3)/3 Major Criticism

Fail to incorporate many other Social and Psychological Characteristics likeSecurity, Justice, Human Rights and so on.

Income is completely ignored


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Human Development Index

Longevityas measured by Life Expectancy at Birth

Knowledge as measured by a weighted average of

Adult Literacy ( w=2/3)

Mean years of schooling (w=1/3) Standard of Living measured by real per capita

income adjusted for the differing purchasing powerparity (PPP) of each countrys currency to reflect cost

of living


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Life Expectancy Index

UNDPs

Lowest goal post with regard to Life Expectancy atBirth is 25 Years

Maximum reasonable life expectancy for a country

to try to achieve over the coming generation is 85Years

PLE=Present Life Expectancy

ALE= Aspired Life Expectancy=85

MLE= Minimum Life Expectancy=25 Life Expectancy Index

={PLE-MLE}/{ALE-MLE}


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Income Index

Adjusted Income= Natural Log of Current Income(CI)

Lowest Per Capita Income in last generation That Could Have

been $100

Log(CI) log(100) = Amount by which the Country has

exceeded this lowest goalpost

Consider this in relation to the maximum that a country

could reasonably aspire to over the coming generation.

UNDP takes this at $40000PPP

Income Index={log(CI)-log(100)}/{log(40000)-log(100)}


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HDI

It reveals that a Country can do much better

than might be expected at a low level of

income

Substantial Income gains accomplish relatively

little in Human Development.

HDI= 1/3{Income Index}+1/3{LEI}+1/3{EI}


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22

HDI-GDP Comparison: Medium HDI

Country HDI HDI Rank GDP (PPP$) per

capita

GDP Rank GDP Rank-HDI Rank

Russia 0.797 65 9902 59 -6

Brazil 0.792 69 8195 74 5

Thailand 0.784 74 8090 65 -9

Saudi

Arabia

0.777 76 13825 45 -21

Armenia 0.768 80 4101 112 32

China 0.768 81 5896 90 9

Sri Lanka 0.755 93 4390 106 13

Vietnam 0.709 109 2745 121 12

Kyrgyzstan 0.705 110 1935 142 32

India 0.611 126 3139 117 -9

Mynamar 0.581 130 1027 163 33

Pakistan 0.539 134 2225 128 -6


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Poverty al lev iat ion

programmes.


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NATIONA RURAL EMPLOYMENT

GUARANTEE PROGRAMME :-

The NREGA is an INDIAN job guarantee scheme , enacted

by legis lat ion on august 25, 2005

The scheme provides a legal guarantee for 100 days o f

employment in every f inancia l year to adu l t members o f

any rural househo ld w i ll ing to do publ ic wo rk- related

unsk i lled m anual work at the statutory m in imum wage of

RS.100/day . The central government ou tlay for s cheme is

RS 39,100cr ($8bi ll ion ) in FY 2009-10.


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Work and activities..

The NREGA achieves tw in object ives of rural

development and emp loym ent. The NREGA st ipu lates

that works mus t be targeted tow ards a set of speci f icrural development act iv i t ies such as: water

conservat ion and harvest ing, afforestat ion , rural

connect iv ity, f lood con tro l and protect ion such as

construct ion and repair of embankments, etc .


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Conclusion..

Job guarantee

National Advisory Council

RTI India Right To Information

NREGS (India)

NREGS (Kerala)
http://en.wikipedia.org/wiki/Job_guaranteehttp://en.wikipedia.org/wiki/National_Advisory_Councilhttp://en.wikipedia.org/wiki/RTI_Indiahttp://en.wikipedia.org/wiki/Right_To_Informationhttp://en.wikipedia.org/w/index.php?title=NREGS_(India)&action=edit&redlink=1http://en.wikipedia.org/wiki/NREGS_(Kerala)http://en.wikipedia.org/wiki/NREGS_(Kerala)http://en.wikipedia.org/w/index.php?title=NREGS_(India)&action=edit&redlink=1http://en.wikipedia.org/wiki/Right_To_Informationhttp://en.wikipedia.org/wiki/RTI_Indiahttp://en.wikipedia.org/wiki/National_Advisory_Councilhttp://en.wikipedia.org/wiki/Job_guarantee


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Jawaharlal Nehru

National Urban Renewal Mission(JNNURM)


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Context for JNNURM

JNNURM, launched in Dec 2005, is the GOIs

response to the urban challenge

Urban System

Second Largest System Globally

Urban Population: 315 million

Urban Decadal Growth: 25-30%

GDP contribution 50% +

Urban Challenge


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Inadequate urban infrastructure,

water, sanitation, 60+ million

slum population, weak institutional

and financial frameworks

constraining adequate and

sustainable service delivery, and

more


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JNNURM Structure

Two major components

1. Urban Infrastructure and Governance

(UIGMOUD)

2. Basic services for the Urban Poor (BSP-

MHPA)


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Special Features..

First comprehensive and planned approach

Cities are required to prepare City

Development Plans (Vision Documents) asparticipatory frameworks for

Infrastructure planning and prioritization, and

Framing urban reform agendas


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Opportunities for Further Partnering

with JNNURM.. Funding for visible, big-ticket projects (e.g. MRTS)

Technical Assistance to individual states for

capacity building,project monitoring systems

Technical Assistance for specific weak states and

regions (e.g. NorthEast)

Facilitating PPP and non-sovereign financing as away of leveraging JNNURM funds

Consider earmarking loan funds to meet the gap of

JNNURM financing in selected states


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Financing the establishment

and capacity development of

urban institutions/researchcentres for sustainablecapacity building.


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THANK YOU

BY:

SAIMA ARSHAD(19)

TINGLE THOMAS(47)

NEKETA ADHIKARI(48)

LINCY KURIAN(50)

DEEPSHIKHA YADAV(51)