Reasons for poverty in Pakistan

 In Pakistan currently more than 20 % people are living below the poverty line. Peoples in the rural areas are poorer then the urban areas. Pakistan and foreign economist have different criteria to describe poverty. According to some foreign economist, if a person’s daily income is less than one dollar a day then he is considered as living below poverty line. Some foreign economist suggests two dollars instead of one dollar a day for poverty line.

Following are the reasons for poverty in Pakistan:

1.         The biggest reason for poverty in Pakistan is the backwardness of the agriculture sector nearly 66% of the population, living in the rural areas is low paid. Data from the agriculture census of Pakistan, conducted in 1990, s, show the cultivated is unequally distributed in Pakistan. Poor formers have no availability of adequate and cheap fertilizer pesticides, quality seeds, water, latest technology and consultancy services. They have no capital to improve their lands, that’s why their income is lower and poverty especially prevails in rural areas.

2.         The second reason of poverty is unfair distribution of income among peoples. The poorer are becoming poorer and the rich becoming richer. In Ayub’s era there were 22 families who had control on national income. In the present the situation is same with a slight difference. Such unequal distribution is creating restlessness among the less income class. They have less money to fulfill their need like food, health, education and housing etc., that’s why the poverty level is increasing day by day. In fact, the non-adoption of Islamic economic system and the capitalistic system are responsible for such unfair distribution of wealth.

3.         The third reason for poverty is rapid growing population of country. Population wise Pakistan is 6th largest country in the world and its population rate is 1.8% which is highest in the region.  Pakistan’s GDP growth rate is less than 3%. So there is shortage of good such food clothing housing health and education etc., all these things are inadequate to meet the Necessities of growing population. One earning hand had to feed a large number of family members. Due to high level of demand and low production there is general poverty.

4.         The fourth reason for poverty is inflation, which is the king of regressive tax on the fixed income class. Due to the inflation, the salaried and fixed income group is more effected than the business class. The employees’ salaries are not increased by the government in proportion to inflation, but their expenditures are increasing day by day, due to dearness. Less income and the low level of saving are the responsible for the poverty.

5.         Fifthly, our industrial sector is very backward the share of this sector in the national income is less than 20%, which is very low as the developed economies. Due to industrial backwardness, our exports are less rather we have to import electrical and industrial items at high rates. a huge portion of foreign exchange reserved in consumed for industrial imports. The low level of living and poverty is related to the backwardness of this sector directly or indirectly. 

6.         The sixth reason of poverty is the low level of education and the defective education system. In Pakistan the literacy rate is only 56% which is very low in the world. Due to few technical, engineering and research institutions, the productivity of labor is very low and our human resources are outdated, both the qualitatively and quantitatively. Women are not given the chance to participate in national, economic, social and educational activities. Due to the scare access to education, the majority of the people have low level of income, directly or indirectly, resulting in poverty.

7.         The seventh reason for poverty is poor governance is responsible for creating poverty. Good governance is an essential and important pre-condition for growth and development. But in Pakistan, such a scenario is different. People have less access to justice and national decision making. There is corruption, political instability, a disturbed law and order situation, red tapism, terrorism, bomb blasts and delay in the system etc. such things are hurting the public’s confidence, and they take less interest in different economic activities. Due to low production, there is general poverty.

8.         The eight reason of poverty is weak testation system. If the taxation system is not favor for a general public and investment sector, then output and economic activities would be sluggish. Indirect taxes like general sales tax, custom duty, excise duty etc., affect the investment climate and poor consumers greatly. Ultimately there will be poverty. Black marketing, hoarding, smuggling, profiteering, nepotism, corruption of specific community is exploiting the poor people of Pakistan, making them poorer.