Vicious circle of poverty

Vicious circle of poverty is a burning problem of Indian Economy.

1. Economics of Development Vicious Circle of Poverty B.Com VI Semester Dr.Rupa Gupta Assistant Professor, Smt. Radhadevi Goenka College for Women, Akola.

2. Learning Objectives: To understand Rational behind Vicious Circle of Poverty. To find out reasons of Vicious Circle of Poverty. To give remedial actions to eradicate Poverty from India. . Learning Outcome: Students understood the entire background of Vicious Circle of Poverty

3. Introduction Nurkse believes that poverty is self-perpetuating. A country is poor because it is poor. Poverty is its own cause. This is the Paradox of Poverty diagnosis of the economic backwardness of underdeveloped countries. The assumption behind the vicious cycle theory is that the saving rate depends on the level of per capita income.

4. Definition The “vicious circle of poverty” refers to a state wherein it is absolutely impossible for a household (a family) to break out of poverty without external intervention.

5. Vicious Circle of Poverty

6. Reasons of Vicious circle of Poverty Supply side of Vicious Circle. Demand side of Vicious Circle. Vicious Circle of Market Imperfections

7. Supply Side of vicious circle

8. Demand Side of Vicious Circle

9. Vicious Circle of Market Imperfections Meier and Baldwin have described a third vicious circle based on capital deficiency due to market imperfections. Meier and Baldwin, “Underdeveloped resources are, therefore, both a consequence and cause of the backward people… The more economically backward are the people, the less developed will be natural resources, lesser the development of natural resources more the people are economically backward.”

10. Vicious Circle of Market Imperfections

11. Remedial Actions to eradicate Poverty Population Control Increase in Employment Equal distribution of Income Regional Poverty Problem of Distribution

12. Remedial Actions to eradicate Poverty Fulfillment of minimum needs of the Poor Increase in the productivity of the Poor   Changes in techniques of Production Stability in Price Level Development of Agriculture Increase in the rate of growth  

13. Thank You