Issues Related to Poverty, Unemployment, and Inequality
Every country faces economic and social challenges. In India, three of the biggest challenges are poverty, unemployment, and inequality. These problems are linked with each other and create a cycle that makes development harder.
- Poverty means lack of access to basic needs like food, shelter, education, and healthcare.
- Unemployment means people willing to work do not get proper jobs.
- Inequality means unfair distribution of income, wealth, and opportunities among people.
Even though India is the world’s fifth-largest economy, these issues still exist, especially in rural areas and among vulnerable groups.
Poverty in India
Meaning of Poverty
Poverty is not just about having less money. It also means lack of opportunities, education, healthcare, and dignity.
There are two main ways to measure poverty:
- Absolute Poverty – Measured using a poverty line (minimum income needed to survive).
- Relative Poverty – When income and opportunities are very low compared to the rest of society.
Poverty in Numbers
| Year | Poverty Rate (as % of population) |
|---|---|
| 1951 | ~55% |
| 1991 | ~36% |
| 2011–12 | ~21% |
| 2023 (estimate) | ~10–12% (multi-dimensional poverty) |
👉 India has reduced poverty a lot since Independence, but millions are still poor.
Causes of Poverty
- Rapid Population Growth – More people, less resources.
- Unemployment & Underemployment – Not enough decent jobs.
- Agricultural Problems – Low productivity, dependence on monsoon.
- Illiteracy – Less access to education means fewer opportunities.
- Inequality in Resource Distribution – Land and wealth concentrated in few hands.
- Inflation – Rising prices reduce purchasing power of the poor.
- Social Factors – Caste system, gender inequality, lack of social mobility.
Effects of Poverty
- Malnutrition and poor health.
- High child labour.
- Low literacy and skill levels.
- Social unrest and crime.
- Slow economic growth (less purchasing power).
Unemployment in India
Meaning of Unemployment
Unemployment means when people are able and willing to work but cannot find suitable jobs.
It is a serious issue in India because a large youth population is entering the job market every year.
Types of Unemployment in India
| Type | Meaning | Example |
|---|---|---|
| Disguised | More people working than needed | 5 people farming on land where 3 are enough |
| Seasonal | Jobs only in certain seasons | Agriculture work during sowing/harvesting |
| Structural | Mismatch between skills and jobs | Graduate not finding job due to lack of skills |
| Frictional | Temporary unemployment while changing jobs | Person shifting from one city to another |
| Educated | Educated people not getting jobs | Engineers, graduates unemployed |
| Open | People with no work at all | Rural youth without employment |
Unemployment Data in India
| Year | Unemployment Rate (approx.) |
|---|---|
| 1991 | ~5% |
| 2005 | ~4.2% |
| 2019 | ~6% |
| 2020 (COVID impact) | ~24% (peak, temporary) |
| 2023 | ~7–8% |
👉 India’s unemployment is mainly youth unemployment and underemployment in agriculture.
Causes of Unemployment
- Population Growth – Too many job seekers, not enough jobs.
- Slow Industrial Growth – Limited job creation in manufacturing.
- Agricultural Dependence – Agriculture provides seasonal jobs only.
- Education-System Mismatch – Degrees but lack of practical skills.
- Technology – Automation reduces demand for unskilled labour.
- Economic Slowdowns – Events like COVID-19 hit job markets badly.
Consequences of Unemployment
- Wastage of human resource.
- Poverty and inequality increase.
- Rise in social problems (crime, frustration, migration).
- Slow economic growth (less productivity).
Inequality in India
Meaning of Inequality
Inequality means unequal distribution of wealth, income, and opportunities among people.
Types of inequality include:
- Income Inequality – Huge gap between rich and poor.
- Wealth Inequality – Top 1% control most of the nation’s wealth.
- Social Inequality – Based on caste, gender, religion.
- Regional Inequality – Some states (Kerala, Maharashtra) are developed, others (Bihar, Odisha) lag behind.
Inequality in Numbers
- According to Oxfam (2022), top 1% of Indians own 40% of total wealth.
- Bottom 50% own only 3% of wealth.
- India’s Gini Coefficient (a measure of inequality) is around 0.35–0.37, showing moderate to high inequality.
| Group | Share of Wealth (2022) |
|---|---|
| Top 1% | 40% |
| Top 10% | 77% |
| Bottom 50% | 3% |
Causes of Inequality
- Unequal distribution of land and capital.
- Education and skill gaps.
- Regional imbalances.
- Gender discrimination.
- Economic policies benefiting the rich more.
Effects of Inequality
- Rich get richer, poor remain poor.
- Weak demand in economy (poor cannot spend much).
- Social tensions and conflicts.
- Poor human development indicators (HDI rank 132 for India).
Link Between Poverty, Unemployment, and Inequality
These three issues are interconnected:
- Poverty increases due to unemployment and low incomes.
- Inequality keeps the poor from accessing opportunities.
- Unemployment pushes families into poverty.
- Together, they form a vicious cycle.
👉 Example: A poor farmer (poverty) without skills cannot find other work (unemployment) and remains stuck in a low-income situation, while rich landowners (inequality) get richer.
Government Measures to Reduce Poverty, Unemployment, and Inequality
The government of India has launched many schemes and policies:
Poverty Reduction
- MGNREGA (2005) – Guarantees 100 days of wage employment to rural households.
- National Food Security Act (2013) – Provides subsidised food grains.
- PM Awas Yojana – Affordable housing.
- PM Garib Kalyan Yojana – Relief for poor during COVID-19.
Employment Generation
- Skill India Mission – Training youth for jobs.
- Startup India & Stand-up India – Encourage entrepreneurship.
- Make in India – Promote manufacturing jobs.
- PM Kaushal Vikas Yojana – Vocational training.
Reducing Inequality
- Reservation in jobs and education – For SC, ST, OBC, EWS.
- Progressive taxation – Rich taxed at higher rates.
- Jan Dhan Yojana – Financial inclusion for poor.
- Ayushman Bharat – Health coverage for weaker sections.
Challenges That Still Remain
- Large Informal Sector – Most workers have insecure jobs.
- Low Human Capital Development – Gaps in education and healthcare.
- Inefficient Implementation – Leakages and corruption in welfare schemes.
- Gender Inequality – Low female workforce participation.
- Slow Job Creation – “Jobless growth” despite high GDP growth.
Way Forward
To tackle poverty, unemployment, and inequality, India needs:
- Inclusive Growth – Focus on sectors that generate more jobs (MSMEs, manufacturing, agriculture).
- Education and Skill Development – Align education with job market needs.
- Social Security – Universal healthcare, pensions, insurance for poor.
- Women Empowerment – Encourage female participation in workforce.
- Tax Reforms – Increase tax collection from rich, spend more on welfare.
- Regional Development – Special focus on backward states.
- Sustainable Development – Growth that protects environment and future generations.
Conclusion
Poverty, unemployment, and inequality are deep-rooted problems that affect India’s progress. Although poverty levels have reduced and the economy is growing fast, inequality and unemployment remain serious challenges.
India must focus on inclusive and sustainable development so that growth benefits everyone, not just a few. By improving education, healthcare, job opportunities, and fair distribution of resources, India can break the cycle of poverty and inequality and ensure a better future for all.
