One of the most commonly held beliefs in the area of child labour, especially in an under-developed economy’s like India, is that it exists because parents who are unable to make ends meet put their children to work to ensure that the family is able to survive. In brief, this is what can be termed as the Poverty Argument in regards to the existence of child labor. So overwhelming is the influence of this argument that many do not even realize the extent to which they subscribe to it. As a result, one finds that even those who stress the role of other factors, to sustain the presence of child labour, ultimately succumb to the temptation of identifying economic circumstances as the ‘real’ factor. It is this that makes it crucially important to understand not only the implications of the poverty argument but also its limitations.