Two major problems that the developing countries of the world face are mass poverty and mass unemployment. They are interconnected. People are poor because they do not have income. That is because they are unemployed. There are also cases where people are employed and poor. For centuries, the problem of poverty is there in India. Reducing poverty is one of the major goals of planning in India. We must have knowledge about the poor and their precise social and economic circumstances. Only then the government can adopt effective policies for removing poverty.
Poverty has been defined in a number of ways. The World Bank (1990) has defined poverty as 'the inability to attain a minimal standard of living'.
In the words of Dandekar (1981) 'want of adequate income, howsoever defined is poverty' Thus, lack of adequate income to buy the basic goods for subsistence living is an important element in the definitions of poverty.
Absolute poverty and Relative poverty
When people do not have adequate food, clothing and shelter, we say they are in absolute poverty.
Relative poverty refers to differences in income among different classes of people or people within the same group or among people of different countries. If we divide the population of a country into different class intervals based on income and if we compare say, the top 20 percent of population with the bottom 20 percent of population, then we can say we are studying about relative poverty.