This paper is a critical review of researches in psychology of poverty in India. In spite of the fact that poverty remains to be the foremost problem of India, there seems to be a general negligence on the part of the Indian behavioral scientists in studying it with researcher's rigour. Poverty in India is typically a unique Indian problem deeply rooted into great traditions of Hinduism and Islam. The review clearly brings out how poverty in India is historically an accepted generalized phenomenon both socially and psychologically among the Indians. Academics, especially, the psychologists also become a victim of this historical process accepting poverty merely as a religious problem. After critically analyzing the historical perspective, the paper then reviews all the researches done on psychology of poverty in India until 1970. The review is basically concerned with the psychological response of that segment of India's population whose objective material deprivation condition is very close to or below the survival level. Whatever few studies done in this line, these have shown that the condition of poverty have direct or indirect bearings on motivations and aspirations in a manner of vicious circle of culture of poverty: it affects the process of socialization and cognitive development, and sometimes (rarely in India) it creates class-consciousness resulting into some kind of protest behavior. The paper emphasizes the lack of proper psychological researches in this crucial field of social concern, while the nova lists, film-makers and poets, unlike the behavioral scientists, have been concerned. The review then provides a guideline for future researches on psychology of poverty in India, both in terms of content and methodology.