In this article we will discuss about the problem of poverty in India and remedies to eradicate it.

Problem of Poverty:

Dutt was chiefly concerned with the problem of India’s poverty. In his book “Famines in India”, he analysed the causes for the frequency of famines in India. The chief cause was the British rule and its policies.

Dutt referred to the following as the causes for India’s poverty:

(a) Recurrence of famines.


(b) Low productivity.

(c) Land tax system and

(d) Decay of cottage industries etc.

Among the causes responsible for low productivity of land, he pointed out unfavorable climate, old agricultural techniques, poor soil, inadequate equipment’s etc. In his opinion, the low standard of living of farmers was due to high density of population, low agricultural prices, land tenure system and agrarian structure.


Though it was true that famines occur due to failure of monsoon, they were aggravated by resource lessness of Indian peasants. He historically discussed all these facts and showed that the agrarian structure of the country was a great hurdle for economic development and welfare.

The Indian tax payer was taxed 40 per cent more than the tax payer of Great Britain and Ireland. The heavy burden of taxes was due to the expensive financial administration. The poverty of India was aggravated by the extravagant, selfish and unsound financial administrative policies of Britain. He felt that nearly half of the revenue received in India was remitted out of the country.

He held that in many ways the sources of Indian national wealth had been narrowed and the Indian Industries declined due to the selfish commercial policy adopted by the British Government. In the words of Dutt, “all our village industries have been killed by a free competition with the steam and machinery of England. Our cultivators and even our village industrial classes therefore virtually depend on the soil as the one remaining source of their subsistence”.

Further the village self-government also became a victim of the British rule in India. In “Economic History of India”, Dutt remarked’ “one of the saddest results of British rule in India is the effacement of that system of village self-government which was developed earliest and preserved longest in India among all the countries of the earth.”

Remedies to Eradicate Poverty:


Dutt suggested many measures to eradicate poverty from Indian soil. He outlined a Complete overhauling of the economic structure of the Indian society.

The principal suggestions are:

(1) Revival of cottage industries to remove unemployment and underemployment,

(2) Extension of irrigation facilities to reduce dependence on monsoon,

(3) Economy in government expenditure and reduction of purchase stores in England and

(4) The rate of interest on public debt should be lowered.

Dutt suggested a comprehensive scheme of reforms in the land revenue system:

(1) Land settlement should not be for more than 30 years.

(2) The cess on land tax should not exceed 6 percent.


(3) In those areas where the permanent settlement had not been introduced, the revenue collected by the land lords on behalf of the state, should not exceed 15 percent of the produce.

(4) As per the directions of the state, in those areas where the land revenue was collected, it should not exceed 20 percent and the average revenue for the district should not exceed 10 percent.

Further, Dutt suggested the withdrawal of excise duties on the Indian mill industries, reduction in the rate of interest on public debt, creation of a sinking fund, sharing of the civil and military expenditure incurred in that country by Great Britain, larger employment of Indians in civil services, prohibition of railway construction from the state loans etc.