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How Can Creation of Income Earning Assets Address the Problem of Poverty? - CBSE (Arts) Class 12 - Economics

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Question

How can creation of income earning assets address the problem of poverty?

Solution

The income earning assets are those assets the ownership of which are controlled and owned by the members of a household. These are land, capital, labour and different levels of skills. Poverty and inequality of income arises due to improper distribution of and access to such income-earning assets. The labour skills of the poverty-trodden population are usually traditional and poor in quality that consequently leads to poor income and employment opportunities. Moreover, a substantial proportion of population is engaged in the small scale production that often lacks capital and modern technology. Consequently, such techniques directly hamper the income earning capabilities of small scale industries. In addition to this, poor people often lack access to social services like proper medical and health care facilities, better education, proper sanitation, etc. The lack of access to such social services affects health, productivity and finally income earning capabilities of the poor. 

In order to alleviate the problem of poverty, the role of income earning assets cannot be substituted. There are various measures that can create income earning assets for the poor people like providing proper access to easy credit, capital, monetary assistance, imparting technical skills, allotment of land to the landless and marginal farmers and better access to education, health services along with better access to information and support services for increasing their productivity. All these measures directly or indirectly contribute positively to the quality of human capital and their endowment of income-earning assets. This in turn leads to increase in the income opportunities and earning capabilities, thereby, contributing to the alleviation of poverty.

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Solution How Can Creation of Income Earning Assets Address the Problem of Poverty? Concept: Causes Poverty.
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