Authors: Anila Kathi, Mandara Raj J P

Introduction

Urban poverty remains one of the most pressing global challenges, deeply intertwined with socio-economic, cultural, and structural factors. Despite rapid urbanization and economic growth, millions struggle with inadequate housing, limited job opportunities, and rising living costs. The issue is particularly severe in India, where expanding urban centres are unable to keep pace with the growing influx of migrants seeking better livelihoods. The urban poor are often trapped in a vicious cycle of low wages, informal employment, and lack of access to essential services such as healthcare, education, and sanitation. While various government welfare programs have been introduced to mitigate urban poverty, challenges in implementation, accessibility, and funding persist. This paper examines the key factors contributing to urban poverty, evaluates the effectiveness of social protection programs, and explores the potential for sustainable urban redevelopment. Through a critical analysis of existing policies and their impact, this study aims to identify the gaps and propose strategic improvements to enhance urban resilience and inclusivity.

Theme 1: Factors that contribute to Urban Poverty: 

Urban poverty globally is a multifaceted challenge (Kiran Sharma, 2012), deeply rooted in various socio-economic, cultural and technological factors (Mukherjee et al., 2005). Several interconnected factors contribute to the persistence and complexity of urban poverty. Existing literature has identified a range of factors contributing to urban poverty. However, further research is needed to fully understand the interplay of these factors.

1. Unemployment and Underemployment: Many people in the urban centres are forced into the informal sector due to a lack of stable, well-paying jobs, leading to low wages and long hours without benefits (Unni, 2017). This widespread informality keeps people stuck in poverty, with little access to services or ways to improve their skills (Breman, 2013). Moreover, the rapid pace of urbanization, coupled with limited job creation in formal sectors, has led to a surge in underemployment, where individuals are forced to accept jobs below their skill level or work fewer hours than desired (Bhalla, 2011).
2. Urban inflation: Low-income households struggle to afford the necessities as the cost of essential goods and services is increasing (Ball, 2015). Inflation further pushes those already vulnerable into poverty and makes it harder for them to escape the vicious cycle of poverty (Rao, 2022).
3. Per capita income: Per capita income in India, while a common measure of economic well-being, hides the deep inequalities within cities and doesn’t reflect the struggles of many urban poor (Deaton & Dreze, 2002). This disparity means that a significant portion of the urban population lacks the resources to meet basic needs despite the seemingly positive economic indicators at a macro level.
4. Rural-Urban Migration: This influx often outpaces the capacity of cities to provide adequate housing, infrastructure, and employment, leading to the creation of overcrowded slums and informal settlements (Kundu, 2007). Migrants often face discrimination, lack of social support networks, and difficulty accessing basic services, making them particularly vulnerable to poverty (Mosse et al., 2002).
5. Lack of Education and Skill: Limited access to quality education and relevant skill development is a significant driver of urban poverty in India (Kaiser, 2024). This skills gap perpetuates a cycle of poverty, as individuals are often relegated to low-paying, informal jobs with limited opportunities for advancement (Goel & Khanna, 2016).
6. Informal Labor Market and Slum Growth: The prevalence of informal labour markets and the proliferation of slums are intertwined factors that significantly contribute to urban poverty in India (Agarwal, 2007). Rapid slum growth reflects the inability of formal housing to accommodate the urban poor, particularly migrants (Kundu, 2007).

Urban poverty in India is a daily struggle for basic survival. Affordable housing is a major challenge, leading to overcrowded slums and poor sanitation, which breeds disease (Kundu, 2010). Healthcare and education are often inaccessible (Das et al., 2016; Tilak, 2017). Rising living costs, particularly for food, make ends meet nearly impossible (Rao, 2022). Social exclusion and discrimination further compound these hardships, limiting opportunities (Thorat et al., 2010).

Theme 2: Effectiveness of Social Protection Programs in Alleviating Urban Poverty

Welfare programs have become vital instruments in addressing the multifaceted challenges of urban poverty (Rustamova, 2025).  Effective targeting and coverage are crucial, ensuring programs reach the most vulnerable (Deaton & Dreze, 2002). This paper analyses the performance of various welfare schemes in India, which are aimed at alleviating urban poverty and identifying the areas for improvement.

The Pradhan Mantri Awas Yojana (PMAY) – Urban aims to provide affordable housing and slum rehabilitation (PIB, 2024).  The main beneficiaries covered are the Economically Weaker Section, Low-Income Group, and Middle-Income Group, ensuring inclusivity (PIB, 2024). PMAY-U has significantly expanded to megacities like Mumbai and Delhi (Sengupta, 2019). Despite its ambitious targets, PMAY-U faces persistent challenges such as delays in implementation, lack of access to finances, and land acquisition hurdles (Runwal, n.d.).

Complementing PMAY-Urban is the Deen Dayal Upadhyaya Yojana for National Urban Livelihoods Mission (DAY-NULM), which focuses on skill development and livelihood enhancement for urban informal workers (GOI, 2024). The main highlights of this scheme are providing skill training and financial assistance aimed at improving employability shelters for urban homeless (GOI, 2024). Though designed with good intentions, one major hurdle is inconsistent service delivery across states (Manish, 2023).

The Smart Cities Mission in India is an urban development program with a strong focus on physical infrastructure. Each city was provided with INR 500 crore for 5 years (Anand, 2018). While the initiative showed positive results, it is often faced with challenges such as opacity and vagueness in funding and skewed toward better-off residents (Anand, 2018).

To get the best results from these programs, there is a need to focus on the supply side and demand side (Agarwal, 2007). The supply-side interventions include enhancing budget allocations, streamlining fund disbursement, and leveraging public-private partnerships (Agarwal, 2007). Simplifying land use policies and rental housing frameworks can improve accessibility (UN-Habitat, 2024) and using GIS mapping and Aadhaar-linked databases increases targeting and transparency. The demand side interventions such as enhancing citizen participation through digital platforms and grassroots campaigns (Loughhead, 2000). Expanding credit linkages and microfinance for self-employment and enterprise development (Loughhead, 2000) and ensuring subsidised access to healthcare, education, and transport enhances productivity (WHO, 2003).

Theme 3: Sustainable Urban Redevelopment and Policy Innovations

Sustainable urban redevelopment is critical to addressing the challenges of urban poverty while ensuring long-term environmental and social sustainability. Traditional approaches to urban planning often neglect the needs of marginalized communities, leading to the expansion of slums and inadequate infrastructure. Innovative policies such as inclusive zoning, mixed-income housing projects, and participatory urban governance can significantly improve living conditions. Cities like Mumbai have attempted large-scale redevelopment projects, such as the Dharavi transformation, but these efforts face resistance due to land acquisition disputes and community displacement concerns. Policy innovations must focus on preserving community networks while upgrading infrastructure, ensuring the urban poor benefit from redevelopment rather than being displaced. Integrating technological solutions like GIS mapping for targeted service delivery and leveraging public-private partnerships can accelerate progress. A comprehensive approach that balances economic growth with social equity will be key to fostering sustainable and inclusive urban development in India.

Additional Insights

Addressing urban poverty requires a multi-dimensional approach that goes beyond conventional welfare schemes. One crucial aspect is enhancing financial inclusion through microfinance initiatives and self-employment programs, enabling the urban poor to gain financial stability. Digital literacy and access to technology can further bridge the economic gap by connecting informal workers with formal market opportunities. Affordable and accessible healthcare should also be prioritized, as poor health exacerbates economic vulnerability. The role of community-led initiatives cannot be understated empowering local organizations to participate in policymaking fosters trust and ensures solutions cater to grassroots realities. Furthermore, integrating climate resilience into urban planning is essential. Many urban poor settlements are highly vulnerable to climate-related risks such as floods and heatwaves, making sustainable urban infrastructure a necessity. Lastly, collaboration between governments, NGOs, and the private sector can create holistic urban development strategies that alleviate poverty and enhance long-term urban resilience.

Urban Poverty and Redevelopment: The Dharavi Case

The Dharavi redevelopment project in Mumbai, part of the PMAY, aims to transform one of Asia’s largest slums into a modern urban area (Sinha, 2024). This case study exemplifies the potential and the pitfalls of PMAY-U. While some success has been achieved in housing development, challenges persist, such as ineligibility for monetary assistance in marginal areas (D’Souza, 2024), land acquisition issues (S. K. Khare, 2024) and resistance from residents.

Conclusion

Urban poverty is a complex, multi-faceted issue requiring targeted interventions and systemic reforms. While existing welfare programs aim to alleviate urban hardships, challenges in execution and inclusivity remain. Sustainable urban redevelopment offers a promising avenue for addressing these issues, but it must be approached with sensitivity to local communities’ needs. Policy innovations, financial inclusion, digital literacy, and climate resilience should be integrated into urban development frameworks to create more equitable cities. Governments must shift from reactive welfare schemes to proactive strategies that empower urban poor populations. Ensuring participatory governance and leveraging technology will be instrumental in bridging the gap between policy and implementation. Ultimately, tackling urban poverty is not just about economic growth but about fostering inclusive, sustainable, and resilient urban ecosystems where every individual has the opportunity to thrive.

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