A. Disparities in income in a developing economy |
III. Less redistribution of income in favour of poor |
B. Economic development benefiting the poor |
I. Trickle down theory |
C. Shifting of labour from agriculture to non-agriculture sector |
II. Change in occupational structure |
D. Increase in the capabilities of people |
IV. Human development |
Causes of poverty lie in the institutional and social factors that mark the life of the poor. These can be caused as a result of (i) social, economic and political inequality, (ii) social exclusion, (iii) unemployment, (iv) indebtedness, and (v) unequal distribution of wealth.
In the Second Five Year Plan, the government's approach to poverty reduction was of three dimensions. It is based on the expectation that the effects of economic growth — rapid increase in gross domestic product and per capita income — would spread to all sections of society and will trickle down to the poor sections also. This was the major focus of planning in the 1950s and early 1960s.
Occupational structure refers to the distribution of population engaged in different occupations. Earlier, people were much engaged in agriculture sector, but now they are moving more towards service sector, thereby changing the overall occupational structure.
The concept of human development was introduced by Dr. Mahbub-ul-Haq. Dr. Haq has described human development as development that enlarges people's choices and improves their lives. People are central to all development under this concept. These choices are not fixed but keep on changing. The basic goal of development is to create conditions where people can live meaningful lives.