Urban poverty in India is often understood as a function of rural poverty. Poor people move to the cities: ipso facto there is now urban poverty. Such a formula stressed the need to address rural poverty as the essential nexus for all other forms of poverty.
The "India:Urban Poverty Report, 2009" suggests that this view is faulty and that much of the blame for urban poverty results from inadequate urbanisation strategies.
With 24% of India's urban population live in slum style accommodation although not all slum dwellers are living below the poverty line. According to the report they have been marginalised because of the poor city planning and poorer urban land management and legislation. Urban poverty in the context of India is not about only nutritional deficiency but deficiencies in the basic needs of housing water, sanitation, medical care, education, and opportunity for income generation.
As the authors of the report state, it "is not a report on the poor in urban areas but a report on the process of urbanisation in India keeping poverty at the centre of analysis".
The report found that urban workers were increasingly gravitating to the informal economic sector, even as the sector for informal economic activities was shrinking. The profile of the work in urban areas has slowly moved from the typical status of casual employment (which is paid on regular basis) to self-employment, which carries its own uncertainties. The urban poor is increasingly a street vendor, a rickshaw puller, a rag picker, a cleaner, a washerman, a load carrier or a domestic servant. Jobs which offer few extra opportunities, carried few ancillary benefits and from their self-employed status carried a constant risk of further impoverishment in the event of illness or changing economic circumstances.
The Report states that while the these workers contributed to the growth of cities, there was growing trend to marginalise the poor to the urban periphery, as they were increasingly seen as threat to civic existence and as slum clearances were promoted for the purposes of property speculation
Interestingly, urban poverty was found to be most pronounced in smaller cities and towns rather than the major urban metros like Mumbai and Delhi where rates were typically at 10%. Access to resources and increased mobility benefited the larger metros. Likewise the report warns against emphasising urban strategies on the large urban metros at the expense of smaller and growing cities. Towns of 50000 inhabitants displayed the highest levels of urban poverty.
So, although the share of the urban poor in the wider urban population has fallen. The increasing pace of urbanisation and the changing face of urban employment means that the absolute number of urban poor has risen.
As many 81 million or 25.7 per cent people (latest data: 2004-05) subsist in urban areas on incomes that are below the poverty line. For this group some eighty per cent of their meagre income goes towards paying for food and energy, leaving very little for meeting the cost of living in an increasingly monetised society.