1. Historical Causes:

• During the British rule, the farmers and agriculture suffered and so poverty increased.
• Britishers followed that kind of trade policy, tax policy and industrial policy, so that indian trade and business started losing their competitive power and production power. Also small and cottage industries of India were ruined. As a result unemployment and poverty started increasing.

2. Causes of Rural Poverty:

• Natural Causes: Repeated draught, uncertainty of monsoon and floods results in low production and less and uncertain income of the agriculturist. Hence, poverty is more.
• Demographic Causes: High increase in population did not allow per capita income to increase. Low per capita income and big size of families resulted in poor quality of life. Labour supply increases because of high population but low pace of development increased unemployment and so was poverty.

3. Economic Causes:

• Low agricultural productivity per labour: Because of poor irrigation facilities, insufficient technology, lack of education and training, heavy load of population,
  etc. result in low agricultural productivity in India. So due to low income of farmers, poverty increases.
• Unequal distribution of land and property: Because of zamindari system most of the tenants were working on other’s land and were not the owners. So they had no interest in investments. As a result, agriculture production became low and poverty increased day by day.
• Minimal development of small and cottage industry: Small and cottage industries which have great contribution in employment were growing slowly and this increased seasonal unemployment. As a result poverty remained high.
• Rapid increase in prices: Price-rise seriously affects poverty. Price-rise reduces purchasing power of low income group. While increases the benefit of businessman. This increases unequal distribution of income in the society and poverty increases.
• High rate of unemployment: In rural , India lack, of development of allied industries are responsible for high illiteracy, low mobility of labour, high rate of unemployment and poverty.

4. Social Causes:

• Low level of education: Because of low level of education, specially in rural areas, people get less opportunities in alternative employment and wage level remain low.. As a result poverty increases.
• Gender inequality: At workplace females are paid less than males. Women have low health level and less opportunities to work that keeps family income low which increases the level of poverty.

5. Other Causes:

• War: Because of war economic development remains low and problem of price-rise takes place. Hence poverty increases.
• Increases in defence expenditure: To make the security system stronger against war, a lot of special facilities have increased expenditure on defence which reduces expenditure on economic development and level of poverty increases.
• Defective Policies: Various schemes were introduced during planning period to reduce poverty but due to frequent changes in the ruling government many times they lacked continuity and co-ordination. As a result, poverty reduction could not be achieved through these schemes.