UPSC NCERT Notes on Indian Economy focusing on Poverty and Unemployment serve as indispensable tools for aspirants aiming to crack the Civil Services Examination. In the vast canvas of economic studies, poverty and unemployment emerge as critical dimensions requiring thorough understanding and analysis. These notes meticulously curated from NCERT textbooks provide a comprehensive overview of the multifaceted issues plaguing India’s socio-economic landscape. From elucidating the nuanced causes and repercussions of poverty to delving into the intricate dynamics of unemployment, these notes offer invaluable insights. They navigate through statistical data, theoretical frameworks, and policy interventions, equipping aspirants with the necessary analytical tools to comprehend, critique, and propose solutions to these pressing challenges. In essence, UPSC NCERT Notes on Indian Economy, particularly focusing on poverty and unemployment, act as guiding beacons, steering aspirants towards a deeper understanding of socio-economic realities crucial for excelling in the Civil Services Examination.
Poverty:
- Poverty is a social phenomenon where a segment of society is unable to meet even its basic life necessities. The UN Human Rights Council characterizes poverty as a human condition marked by sustained or chronic deprivation of resources, capabilities, choices, security, and power necessary for enjoying an adequate standard of living and other essential rights.
- There is no official data post-2011 to determine the country’s poor population, but the United Nations estimated in 2019 that it was 364 million (36.4 crores), constituting 28% of India’s population. Poverty, as defined by the World Bank (living on less than $1.90 a day), was reported by the Indian Government in 2019 to affect 6.7% of its population.
- According to Oxfam, the top 1% of India’s population holds 73% of the wealth, while 670 million citizens, comprising the country’s poorest half, witnessed only a 1% increase in their wealth. A recent report on rising inequality reveals that in 2020, approximately 4.6 crores Indians fell into extreme poverty, accounting for nearly half of the global new poor, as per the United Nations. Interestingly, the number of Indian billionaires grew from 102 to 143 during the pandemic period.
- India’s 100 wealthiest individuals reached a record high net worth of ₹57.3 lakh crore ($775 billion) in 2021, according to Oxfam India’s statement. This information is part of the Inequality Kills Report Thorros India Supplement, scheduled to be presented at the World Economic Forum’s virtual event, The Davos Agenda, on January 17, 2022.
Poverty comes in two forms:
Absolute Poverty:
- This occurs when people’s consumption or income falls below the minimum level required to meet basic needs according to national standards, expressed as a poverty line.
- Various definitions exist, with many countries using criteria such as calorie intake. For example, the Planning Commission in India suggested a daily intake of 2400 kilocalories in rural areas and 2100 kilocalories in urban areas.
- Another criterion is the Minimum Consumption Expenditure Criteria, which defines individuals living below the poverty line as those with per capita consumption expenditure below a specified threshold.
Relative Poverty:
- This type of poverty is determined by comparing the per capita income of different countries. A nation with significantly lower per capita income compared to others is considered relatively poor.
- In poor nations, the portion of the population with lower incomes faces challenges meeting basic needs.
- The World Bank uses multiple poverty lines, including $1.90 per day, $3.20, and $5.50, reflecting different income levels in lower-middle and upper-middle-income countries. Measurement methods include the Gini coefficient and Lorenz Curve.
Lorenz Curve
- The Lorenz Curve, developed by Max O Lorenz in 1905, illustrates income disparity between countries. The Gini coefficient, created by Corrado Gini, is a statistical measure of income or wealth inequality. A Gini coefficient of zero indicates perfect equality, while a value of one represents maximal inequality. This coefficient is often calculated based on the Lorenz curve, plotting the cumulative income proportion against the cumulative population percentage.
Gini Co-efficient
- The Gini coefficient (also known as the Gini is a measure of statistical indexion Gini rated by the Italian statistician and sociologist Corrado Gini, it measures the ans inequality among values of a frequency drumoni distribution (e.g., levels of income).
- The Gini coefficient is commonly used as a measure of inequality of income or wealth. A Gini coefficient of zero expresses perfect equality, where all values are the same (e.g., where herbs everyone has an exactly equal income).
- A Gini coefficient of one (100 on the percentile scale) expresses maximal inequality among values (e.g., where only one person has all the income).
- The Gini coefficient is usually defined mathematically based on the Lorenz curve, which plots the proportion of the total income of the population (y-axis) that is cumulatively earned by
Inequality
- The Gini coefficient, measuring perfect income equality at 0 degrees, reflects the income gap within a society. Inequality, often denoting the disparity between the wealthy and the impoverished, increases with a widening gap. This disparity manifests in the distribution of economic assets and income among individuals and groups, influenced by economic systems, access to resources, education, social factors like caste and gender, and more.
Inequality in India
- In India, both overall GDP and per capita GDP have surged during the economic reform period. While the percentage of the population living in poverty has decreased, inequality has risen. The Inequality Virus Report 2021 by Oxfam highlights a 35% increase in the wealth of Indian billionaires during the lockdown, accentuating the wealth gap. The Gini coefficient of wealth in India in 2017 was 10.83, positioning India among the most unequal countries. The top 10% of the population holds 77% of the total national wealth, and the number of billionaires has increased significantly.
Adverse Impacts of Inequality
- The trickle-down theory, advocating for flourishing businesses benefiting lower-income individuals, has been critiqued. In India, the Consumer Price Index for Agricultural Labour (CPIAL) and Consumer Price Index for Industrial Workers (CPIIW) are used for poverty measurement.
- Growing inequalities can impede growth, create social unrest, and lead to the concentration of wealth in the hands of a few. Urban-centric growth in India, marked by migration and uneven investment, has sparked social friction. In such societies, there is a risk of policy capture by the wealthy, potentially undermining institutional foundations.
Poverty in India
- Regarding poverty in India, estimates suggest significant progress, with millions lifted out of poverty between 2005-06 and 2019-20. However, poverty lines vary across states due to differing price levels. Poverty estimation is conducted by NITI Aayog’s task force using data from the National Sample Survey Office.
- The poverty line signifies the purchasing power needed to meet minimum needs and categorizes people into semicolon chronic poor, transient poor, and non-poor based on their poverty status.
- Individuals who lack sufficient purchasing power fall into two groups: those Above the Poverty Line (APL) and those Below the Poverty Line (BPL). The former, deemed not poor, possess a level of purchasing power considered adequate. Conversely, the latter, labeled as poor, lack the necessary purchasing power.
- The Asian Development Bank has established a new poverty line based on a daily expenditure of US $1.35. According to the Tendulkar Committee Report, which offers state-wise poverty estimates, Odisha, with 57.2% of BPL individuals, ranks as the poorest state, followed by Bihar, Madhya Pradesh, and Chhattisgarh.
Measures of Poverty:
Head Count Ratio or Poverty Ratio:
- Calculated by dividing the number of people below the poverty line by the total population.
- Indicates the proportion of poor individuals in the total population.
- Poverty Gap Index (PGI): Represents the difference between the poverty line and the average income of all households living Below Poverty Line (BPL), expressed as a percentage of the poverty line.
- Provides insights into the depth and severity of poverty.
- Squared Poverty Gap Index: Represents the mean of the squared individual poverty gaps relative to the poverty line.
- Reflects the severity of poverty and inequality among the poor.
- Sen Index of Poverty: Developed by Professor Amartya Sen, it incorporates the head count ratio, poverty gap index, and Gini coefficient.
- Captures the extent, severity, and inequality of poverty.
Multidimensional Poverty Index (MPI):
- Developed in 2010 by the Oxford Poverty and Human Development Initiative and the United Nations Development Programme.
- Considers factors beyond income, assessing poverty based on education outcomes and standard of living.
- Calculated as MPI = H x A, where H is the percentage of poor people, and A is the average intensity of MPI poverty across the poor.
Human Poverty Index (HPI):
- Originally used by UNDP to measure poverty, it transitioned to the Multidimensional Poverty Index (MPI) in 2010.
- Fisher Price Index (FPI): Updates the poverty line using actual consumption data, with a 60% weightage to food articles.
Conditional Cash Transfers (CCTs):
- A mechanism to combat poverty globally, involving government cash transfers to beneficiaries contingent on specific actions.
- Actions may include enrolling children in school, regular check-ups, institutional delivery, and vaccination.
- Aims to alleviate poverty by providing cash to needy households and fostering positive behavior through conditional requirements.
Several expert groups have played a crucial role in estimating poverty in India.
Here are some notable committees:
YK Alagh Committee (1979):
- Initially focused on traditional income-based poverty measurement.
- Shifted to a precise measure of poverty related to starvation, particularly in terms of calorie consumption.
- Introduced the criterion of people consuming less than 2100 kilo calories in urban areas or less than 2400 kilo calories in rural areas being considered poor.
Lakdawala Committee (1989):
- Constituted by the Planning Commission to address methodological and computational aspects of poverty estimation.
- Submitted its report in July 1993.
- Recommended calculating consumption expenditure based on caloric consumption.
- Advocated constructing state-specific poverty lines, updated using the Consumer Price Index (CPI) for industrial workers in urban areas and CPI for agricultural labor in rural areas.
Tendulkar Committee Report (2009):
- Headed by Mr. Suresh Tendulkar, the Prime Minister’s Economic Advisor.
- Tasked with reviewing the methodology for estimating poverty in India.
- Moved beyond the calorie criterion and adopted a broader definition of poverty, considering expenditures on health, education, and clothing.
- Revised the poverty line for 2004-05, raising it to ₹447 per capita per month in rural areas and ₹579 per capita per month in urban areas.
- Estimated 37.2% of the Indian population below the poverty line in 2004-05, contrasting with the official estimate of 27.5%.
- Updated data using the 66th Round NSS (2009-10) suggested a decline in the percentage of people below the poverty line from 37.2% in 2004-05 to 21.92% in 2011-12.
NC Saxena Committee (For BPL Families in Rural Areas):
- Formed to review the methodology for conducting BPL Census in rural areas.
- Led by Dr. NC Saxena, the committee aimed to recommend a suitable methodology for identifying BPL families in rural areas.
- These expert groups have contributed significantly to shaping methodologies for poverty estimation in India, addressing various dimensions beyond income and calorie consumption.
SR hashim Committee
- The expert group, which submitted its report in August 2009, proposed significant changes in the methodology for identifying families below the poverty line (BPL) in rural areas. They recommended abandoning the score-based ranking used in the BPL Census 2002. Instead, the committee proposed an automatic exclusion of privileged sections and an automatic inclusion of deprived and vulnerable sections, with the remaining population surveyed and ranked on a scale of 10. Following this methodology, the committee estimated that 50% of the total population was below the poverty line.
- Moving to urban areas, the SR Hashim Committee, tasked with identifying BPL families, suggested that households with three of the four items (refrigerator, motorized two-wheelers, landline telephone, or washing machines) should not be considered poor. The committee proposed a three-stage approach: automatic exclusion, automatic inclusion, and a scoring index to identify urban poor. Homeless families facing social and occupation deprivations were recommended for automatic inclusion in the BPL list. The definition of a poor family included members engaged in begging, rag picking, domestic work, sweeping, or sanitation work.
Rangaranjan Commitee
- The scoring index ranged from 1 to 12, with households scoring from 1 to 12 considered eligible for inclusion in the BPL list. The Rangarajan Committee, constituted by the Planning Commission in May 2012 to review the Tendulkar Committee methodology for estimating poverty, submitted its report on July 6, 2014. The committee contested the Tendulkar Committee’s findings, stating that the population living below the poverty line decreased from 38.2% in 2009-10 to 29.5% in 2011-12. The Rangarajan report revised the poverty line, increasing it to ₹972 per month (₹32 per day) for rural areas and ₹1407 per month (₹47 per day) for urban areas, in contrast to the Tendulkar Committee’s suggestions.
Here’s a summary of the different poverty lines proposed by each committee:
| Expert Group | Year | Per Person Consumption per day (in) | Per Person Consumption per month (in) | All India Poverty Line Expenditure (in) |
| Suresh Tendulkar | 2011-12 | 27.2 | 33.3 | Rural: ₹816, Urban: ₹1600 |
| Rangarajan | 2009-10 | 26.7 | 39.9 | Rural: ₹801, Urban: ₹1198 |
| Rangarajan (Revised) | 2011-12 | 32.4 | 28.7 | Rural: ₹860, Urban: ₹1407 |
- These committees played crucial roles in reshaping the criteria and approaches for identifying poverty in both rural and urban contexts in India.
- Estimation of poverty is a critical aspect, and various international organizations have provided insights into India’s poverty scenario through different reports:
UN Report on Indian Poverty (Multi-dimensional Poverty Index – MPI)
- The United Nations’ analysis on the Multi-dimensional Poverty Index (MPI) in 2021 revealed that 5 out of 6 poor people in India belong to lower tribes or castes. The Scheduled Tribe group, constituting 9.4% of the population, is the poorest, with 65 million out of 129 million people living in multi-dimensional poverty.
- Scheduled Tribes, Scheduled Castes, and Other Backward Classes collectively contribute to significant portions of multi-dimensional poverty. Globally, the MPI covers 107 developing countries, identifying 1.3 billion multi-dimensionally poor people. India tops the list with 381 million, followed by Nigeria, Pakistan, Ethiopia, and the Democratic Republic of the Congo. Bihar has the highest segment of multi-dimensionally poor population (51.91%) among states, while Kerala has the smallest (0.71%).
Poverty by UNDP
- The United Nations Development Programme (UNDP) views poverty as a multi-dimensional challenge that goes beyond income, encompassing factors like health and nutrition.
- The World Bank uses different parameters to measure poverty globally, including those earning less than $2.15 per day (considered extreme poverty) and higher poverty lines for Low-Middle Income Countries (LMIC) and Upper-Middle Income Countries (UMIC).
- Parameters like Lorenz Curve and Gini Coefficient are also utilized to observe poverty, with varying benchmarks set by organizations like the Asian Development Bank and the Indian Government.
World Bank Report
- The World Bank’s report by the end of 2022 indicates that global extreme poverty increased to an estimated 9.3% in 2020, with a notable increase in India. The national poverty headcount rate in India was 10% in 2019, with rural areas experiencing a 12% poverty rate and urban areas at 6%. The report emphasizes that between 1981-2010, developing countries observed a decline in poverty rate from 50% to 21%. A task force, chaired by Dr. Arvind Panagariya, submitted a report focusing on poverty measurement and combating strategies.
Task Force on Elimination of Poverty in India
- The Task Force, established in 2015, under Dr. Arvind Panagariya’s leadership, finalized its report in 2016. The report, titled “Eliminating Poverty: Creating Jobs and Strengthening Social Programs,” highlights the NITI Aayog’s Poverty Index (MDPI), estimating that a quarter of India’s population (322.5 million in 2016) was multidimensionally poor in 2015-16.
BPL Population
- While Dr. NC Saxena Committee was initially set up for advising on the BPL Census methodology, its report in 2009 recommended revising upwards the percentage of people entitled to BPL status to at least 50%, suggesting a rank-based system with automatic inclusion and exclusion of poor families.
| Year | Number of Poor (in crores) | Percentage of Poor (in total population) |
| 1973-74 | 32 | 54.9% |
| 1977-78 | 33 | 51.3% 44.5% |
| 1983 | 32 | |
| 1987-88 | 31 | 38.9% |
| 1993-94 | 32 | 36% |
| 1999-2000 | 26 | 26% |
| 2004-05 | 40.7 | 37.2% |
| 2009-10 | 35.46 | 29.8% |
| 2011-12 | 26.93 | 21.9% |
The figures for the years 2004-05, 2009-10, and 2011-12 are based on the new poverty line.
Categories of Poverty in India
- Amartya Sen, a Nobel laureate and economist, has eloquently explained that poverty encompasses more than just a lack of income, although income is a crucial factor.
- While poverty is a relative concept, in cases of absolute poverty, it becomes essential to categorize individuals based on the poverty line.
- People experience poverty differently; some are consistently poor, some are occasionally poor, and some are never poor. Therefore, categorization is crucial for a nuanced understanding of poverty.
Categorization of Poverty Based on Severity
- Individuals facing poverty can be classified into three categories: chronic poor, transient poor, and non-poor.
Chronic Poor
- Always Poor: Individuals who consistently lack sufficient funds to meet their basic needs, remaining below the poverty line.
- Usually Poor: Individuals who occasionally have slightly more money but generally struggle to fulfill their basic needs, such as casual and landless workers.
Transient Poor
- Churning Poor: Individuals who frequently move in and out of poverty, including small farmers and seasonal workers.
- Occasionally Poor: Affluent Individuals most of the time but may experience periods of financial hardship, such as those who gamble.
Non-poor or Never Poor
- Non-poor individuals are those living above the poverty line, including professionals like doctors and lawyers. The poverty line serves as the cutoff point distinguishing between the poor and non-poor.
Measuring Poverty in India
- The common method to measure poverty is based on income or consumption levels, typically using an average calorie intake of 2400 calories for rural individuals and 2100 calories for urban individuals.
- In 2011-12, the poverty line was set at ₹816 per month for rural areas and ₹1000 for urban areas. The higher urban poverty line accounts for the relatively higher prices in urban centers compared to rural areas.
- Monthly Per Capita Expenditure (MPCE) is commonly used by the government to identify poor households, although critics argue that it lumps all the poor together without differentiating their specific needs.
- Head Count Ratio, a popular measure in India, indicates the proportion of the poor in the total population, providing insight into the extent of poverty within a country.
- To calculate the absolute number of poor and identify regions with high poverty rates, alternative methods are necessary.
A New Approach to Measuring Poverty
- Globally, the United Nations Development Programme (UNDP) establishes parameters for measuring poverty, while in India, the National Institution for Transforming India (NITI Aayog), formerly the Planning Commission, sets the parameters based on committee recommendations.
- Earlier, the UNDP used the Human Poverty Index (HPI) in its Human Development Reports, but by 2010, it transitioned to new parameters.
- The transition towards a new parameter, specifically the Multi-dimensional Poverty Index (MPI) in India, marked a shift in the approach to identifying individuals below the poverty line. The Planning Commission regularly formed expert committees to propose updated formulas for this purpose.
The National Policy for Skill Development and Entrepreneurship, established in 2015
- The National Policy for Skill Development and Entrepreneurship, established in 2015, signifies a departure from the pre-independence National Policy on Skill Development (NPSD) of 2009. This new policy, integrating entrepreneurship into the framework, envisions creating an empowerment ecosystem through widespread, rapid, and high-standard skilling. It aims to foster a culture of innovation-based entrepreneurship, generating wealth and employment for sustainable livelihoods.
Employment
- On the employment front, it involves individuals pursuing gainful activity during a reference period, classified into self-employed workers, casual wage workers, and regular wage employees. Underemployment, a prevalent issue in developing countries alongside unemployment, assesses how effectively the labor force utilizes skills, experience, and job availability.
- Underemployment manifests in two forms: visible underemployment, where individuals work fewer than normal hours, and invisible underemployment, where individuals work full time but earn low incomes or engage in jobs that underutilize their abilities (e.g., an MA degree holder working as a driver).
Key indicators for estimating underemployment in India
- Key indicators for estimating underemployment in India include the Labor Force Participation Rate (LFPR), Worker Population Ratio (WPR), and Proportion Unemployed (PU). Underemployment becomes apparent when individuals engaged in part-time work are willing to do more, or a person’s productivity and income increase after shifting to another occupation.
Unemployment
- Unemployment, the condition where individuals are willing and able to work at prevailing wage rates but lack opportunities, is closely tied to the concept of the labor force. Unemployment rate calculations consider the number of unemployed persons per 1000 individuals in the labor force, including both employed and unemployed.
- In India, unemployment is a significant social issue, with the government reporting 31 million jobless individuals in 2018. According to the Statistics Ministry, India’s unemployment rate rose to 6.1% in the 2017-18 fiscal year, reaching the highest level in at least 45 years, although these figures are subject to dispute.
- The adoption of digital manufacturing and machinery in factories and garment production is contributing to unemployment challenges in India. Unemployment stands out as a significant issue in the country.
- Similar to other underdeveloped nations, India grapples primarily with structural unemployment, manifested in both open and disguised forms. Additionally, Keynesian involuntary unemployment exists, presenting the opportunity for resolution through the augmentation of effective demand, mirroring practices in developed countries.
The causes of unemployment in India encompass:
- Rapid population growth.
- Fragmented landholding.
- Seasonal agriculture.
- Decline of manufacturing industries.
- Inadequate employment planning and execution.
- The impact of global economic slowdown.
Various types of unemployment include:
Voluntary Unemployment:
- Occurs when an individual is unwilling to work at the prevailing wage rate or does not have the desire to work. This type is not factored into the measurement of unemployment in an economy.
Involuntary Unemployment:
- Encompasses situations where a worker is willing and able to work but is unable to secure employment, also referred to as open unemployment.
Frictional Unemployment:
- Represents temporary unemployment associated with job changes, stemming from factors like labor immobility, raw material shortages, lack of knowledge about job opportunities, and machinery breakdowns.
Structural Unemployment:
- Tied to the structural pattern of the economy, arising from factors such as shortages in production factors like land and capital, lack of skills for new industries, and decreased availability of employment when industries close down or undergo technological changes.
Seasonal Unemployment:
- Arises are due to certain occupations requiring workers only during specific parts of the year, such as agriculture.
Technical Unemployment:
- Associated with technological changes, especially in capital-intensive modern industries, leading to the replacement of labor by machines.
Educated Unemployment:
- Pertains to unemployment among individuals with standard education levels.
Disguised Unemployment:
- Occurs when more people are employed for a job that could be performed equally efficiently by a smaller workforce.
- Features of disguised unemployment include zero marginal productivity of labor, difficulty in identifying unemployed individuals, a surplus of population, and its principal association with agricultural families.
Measure unemployment in India
- To measure unemployment in India, the National Sample Survey Office (NSSO) has conducted quinquennial surveys since 1972-73. These surveys categorize individuals based on their activities during specified reference periods, such as usual principle status, current weekly status, and current daily status, following the recommendations of the Bhagwati Committee.
- Usual Principle and Subsidiary Status (UPSS) determine a person’s employment status based on their engagement for a substantial period (over 182 days) in one or more work-related activities during the 365 days preceding the survey.
- Current Weekly Status (CWS) classifies a person as employed if engaged for at least one hour on any single day in work-related activities during the reference period, offering insights into chronic unemployment.
- Current Daily Status (CDS), measured in man-days, designates a person as unemployed if they fail to secure work on a given day or some days throughout the survey week.
Key findings from the NSSO (68th Round) on employment and unemployment include:
- The Labor Force Participation Rate (LFPR) in usual status for rural and urban males stagnated, decreased by 1% for rural females, and increased by about 1% for urban females between NSSO 66th round (2009-10) and 68th round (2011-12).
- The Unemployment Rate (UR) in usual status stood at about 2% for both rural males and females, 3% for urban males, and 5% for urban females. Among the youth (age 15-29 years), UR was notably higher compared to the overall population.
- UR in usual status among educated youth (age 15-29 years with secondary and above education) was 8.1%, 15.5%, 11.7%, and 19.8% for rural males, rural females, urban males, and urban females, respectively.
- The annual report on the Periodic Labour Force Survey (PLFS) for 2020-2021 reports an all-India UR of 4.2%, with 3.3% in rural areas and 8.6% in urban areas.
The Periodic Labour Force Survey
- The Periodic Labour Force Survey (PLFS) 2021, conducted annually by the National Statistical Office (NSO) since 2017, provides estimates of key employment and unemployment indicators like LFPR, Worker Population Ratio (WPR), and UR in the CWS for urban areas with a duration of three months.
Employment Related Programmes
- Considering the unprecedented demographic changes in India, the government has focused on enhancing basic education, achieving some success. However, vocational education and skill development remain critical areas of concern.
- The Skill Development Programme, approved by the Union Cabinet, aims to skill 500 million individuals by 2022. This plan involves a three-tier strategy implemented by the Prime Minister’s National Council on Skill Development, National Skill Development Coordination Board, and National Skill Development Corporation.
Skill Development
- The council is led by the Prime Minister, with members including the Ministers for Human Resource Development, Finance, Heavy Industries, Rural Development, Housing and Urban Poverty Alleviation, and Labour and Employment. The Deputy Chairman of the Planning Commission, the Chairperson of the National Manufacturing Competitiveness Council, the Chairperson of the National Skill Development Corporation, and six experts in skill development are also part of the council.
- The Prime Minister’s National Council on Skill Development has embraced a vision to skill 500 million individuals by 2022 through inclusive skill systems, considering factors like gender, rural or urban backgrounds, organized or unorganized sectors, and traditional or contemporary skill sets.
National Skill Development Co-ordination Board (NSDCB)
- The NSDCB operates under the chairmanship of the Deputy Chairman of the Planning Commission, with members including secretaries from the ministries of human resource development, labor and employment, rural development, housing and urban poverty alleviation, and finance.
- Secretaries from four states, rotating every two years, three distinguished academicians, subject area specialists, and the Secretary of the Planning Commission constitute the remaining members.
- Its primary objective is to implement decisions from the Prime Minister’s National Council on skill development, along with developing operational guidelines and instructions to meet the broader skill development needs of the country.
National Skill Development Corporation
- The third tier of coordinated action on skill development is NSDC, a non-profit company under the Companies Act with an appropriate governance structure.
- The Central Government has established a National Skill Development Fund with an initial corpus of ₹995.10 crore to support the corporation’s activities. The fund’s corpus is expected to increase to about ₹15,000 crore, with contributions from governments, public and private sectors, and bilateral and multilateral sources.
Atmanirbhar Bharat Rozgar Yojana
- Launched to stimulate employment in the formal sector and incentivize the creation of new job opportunities during the COVID recovery phase under Atmanirbhar Bharat Package 3.0.
- This scheme, operational for the period 2020-2023, was unveiled by Union Finance Minister Nirmala Sitharaman on November 12, 2020.
- Eligibility criteria include employees with a monthly wage of less than ₹15,000, not working in any EPFO-registered establishment before October 1, 2020, and lacking a Universal Account Number or EPF Member Account Number before the specified date.
Pradhan Mantri Shram Yogi Maandhan
- The Government of India has introduced a pension scheme for unorganized workers called Pradhan Mantri Shram Yogi Maandhan (PM-SYM) to provide old-age protection for these workers. Unorganized workers engaged in various occupations with a monthly income of ₹15,000 or less and belonging to the age group of 18-40 years are eligible. Those not covered under the New Pension Scheme (NPS), Employees State Insurance Corporation (ESIC) scheme, or Employees Provident Fund Organisation (EPFO) are eligible for this scheme.
PM SVANidhi
- The Ministry of Housing and Urban Affairs introduced the PM Street Vendor’s Atma Nirbhar Nidhi (PM SVANidhi) on June 1, 2020, to offer affordable working capital loans to street vendors affected by the Covid-19 lockdown, enabling them to restart their livelihoods.
- Initially set until March 2022, the scheme has been extended until December 2024. The focus includes an augmented collateral-free affordable loan corpus, increased adoption of digital transactions, and comprehensive socio-economic development for street vendors and their families.
Scheme Benefits
- Street vendors can access a working capital loan of up to ₹10,000, repayable in monthly installments over a one-year tenure. Timely or early repayment entitles beneficiaries to an interest subsidy of 7% per annum, credited quarterly through Direct Benefit Transfer.
- There are no penalties for early repayment. The scheme encourages digital transactions with cashback incentives of up to ₹100 per month.
- Vendors can escalate the credit limit upon timely or early loan repayment.
AatmaNirbhar Bharat Abhiyaan
- AatmaNirbhar Bharat Abhiyaan, or the Self-reliant India campaign, is the vision for a new India announced by Prime Minister Shri Narendra Modi on May 12, 2020. The economic package of ₹20 lakh crore under this initiative aims to guide the country out of the COVID-19 crisis by fostering self-reliance.
- The five pillars of AatmaNirbhar Bharat are Economy, Infrastructure, System, Vibrant Demography, and Demand. The Finance Minister has unveiled government reforms and enablers across seven sectors as part of AatmaNirbhar Bharat Abhiyaan.
Sankalp Se Siddhi Programme
- Launched to uplift the tribal community of India, the Sankalp Se Siddhi Programme addresses the various challenges faced by tribal communities. The key initiative, Sankalp Se Siddhi-Mission Van Dhan, aims to empower tribals. TRIFED, as the nodal agency for tribal empowerment, continually launches initiatives to improve tribal income and livelihoods while preserving their way of life and traditions.
Van Dhan Internship Programme
- The Ministry of Tribal Affairs initiated the Van Dhan Internship Programme on October 17, 2019, organized by TRIFED. This program trains interns to help the tribal population become self-reliant entrepreneurs.
Solar Charkha Mission
- Former President Ram Nath Kovind launched the Solar Charkha Mission on June 27, 2018. The government provides a ₹550 crore subsidy to artisans, generating employment in rural areas. The Ministry of Micro, Small, and Medium Enterprise covers 50 identified clusters nationwide, employing 400 to 2000 artisans in each cluster.
- As part of this initiative, the government introduced the Sampark portal, a digital platform connecting five lakh job seekers with the Ministry of Micro, Small, and Medium Enterprise (MSME).
Nai Manzil Scheme
- Launched on August 8, 2015, in Patna, the Nai Manzil Scheme is a Central Sector Scheme designed for individuals aged 17 to 35 from all minority communities, including Madrasa students. The scheme aims to address the educational and livelihood needs of minority communities, particularly Muslims, who lag in educational achievements compared to other minority groups.
- This program provides a new direction and goal for out-of-school or dropped-out students, especially those in Madrasas, as they may not receive formal Class 12 and Class 10 certificates, limiting their opportunities for employment in the organized sector.
Skill Upgradation Programme for Minorities
- A skill upgradation program for minorities focuses on enhancing skills and training in ancestral arts, and preserving traditional arts and crafts, which are valuable heritage resources. An additional budget of ₹100 crore for the Modernization of Madrasas has been allocated to the Department of School Education.
Prelims Facts
- The definition of poverty in India is based on calorie intake (UPPSC (Mains) 2008).
- In which year did the UNO adopt a definition of absolute poverty?- 1995 (UPPSC (Pre) 2017)
- The concept of the ‘Vicious Circle of Poverty’ is associated with -Nurkse (UPPSC (Pre) 2014)
- Those who continuously move between being poor and non-poor are known as Cyclic poor (IPSC (Pre) 2016].
- The idea of ‘cultural poverty’ was proposed by -Oscar Lewis (UPPSC (Pre) 2020]
- In which year was the book titled ‘Poverty and Un-British Rule in India’ published? -1901 (UPPSC (Mains) 2013
- The Multi-dimensional Poverty Index (MPI) includes -Health, Education, and Living Standard [UPPSC (Pre) 2019)
- The aim of the differentiated interest scheme was to provide concessional loans to -The weaker section of society [UP Lower 2008]
- Which committee was constituted in India to identify families that are Below the Poverty Line (BPL)? -Hashim Committee (UPPSC (Pre) 2018]
- According to the Planning Commission Report for the year 1999 to 2000, the highest percentage of people living Below the Poverty Line was in which state? -Odisha (UKPSC (Pre) 2002, 2006, UPPSC (Pre) 2014
- Which method is used to decide the poverty line? -Average per capita income, calories in food, headcount ratio (CGPSC (Pre) 2005)
- In a given year in India, official poverty lines are higher in some states than in others because -Price levels vary from state to state [IAS (Pre) 2019)
- The methodology followed for poverty estimation by using 61st National Sample Survey Organization (NSSO) data in 2004 to 2005 is -Mixed Recall Method (MRM) (JPSC (Pre) 2016]
- The Tendulkar Committee has estimated that in India the percentage of the population Below the Poverty Line is -37.2% (UPPSC (Pre) 2012, UP UDA/LDA (Pre) 2013]
- The Lorenz Curve is measured by -Inequality of income [UPPSC (Pre) 2018]
- Who has given the idea of Self-Help Groups as an effective tool for poverty alleviation? -Md Yunus [BPSC (Pre) 2018
- Which committee’s recommendations are used for estimating the poverty line in India? -Lakdawala Committee [UP Lower 2013]
- The Government of India constituted a committee to set new standards for the estimation of the population living Below the Poverty Line. Who was the Chairman of this committee? -Suresh Tendulkar [UP UDA/LDA (Pre) 2013]
UPSC NCERT Practice Questions
1,Which of the folowing is are the types of powery? UPPSC (Pre) 2023
1. Absolute poverty
2. Relative poverty
3. Subjective poverty
4. Functional poverty
Choose the correct answer by using the codes given below.
(a) 1 and 4
(b) 1, 2 and 3
(c) 3 and 4
(d) 1 and 2
2. What is the theme of the International Day for the Eradication of Poverty for 2022-23?
(a) “Dignity for all in practice.”
(b)”Coming together to end poverty and discrimination.”
(c)”Acting together to empower children, their families and communities to end poverty.”
(d)”Accelerating global actions for a world without poverty.”
3. Consider the following statements.
1. Gini co-efficient is the measure of income inequality in a country with 1 representing complete inequality and 0, as complete equality.
2. India’s Gini co-efticient is less than the US, but
more than China.
Which of the statements) given above is/are correct?
(a) Only 2
(b) Only 1
(c) Both 1 and 2
(d) Neither 1 nor 2
4. Match List I with List II and select the correct answer by using the codes given below the list.
| List I (Curves) | List II (Signals) |
| A. Lorenz Curve | 1. Inflation and employment |
| B. Phillips Curve | 2. Tax rates and revenue |
| C. Engel Curve | 3. Inequality in the distribution of income or wealth |
| D. Laffer Process Curve | 4. Ratio of income and expenditure on food |
Codes
a 3 4 1 2
b) 2 1 4 3
c) 3 1 4 2
d) 2 4 1 3
5. The Government of India has decided to measure poverty line in terms of
(a) household consumption
(b) household savings
(c) household investment
(d) household
6. Estimates of poverty are made by the Planning Commission based on the data provided by which of the following?
(a) NSSO
(b) CSO
(c) Ministry of Rural Development
(d) Finance Ministry
7. Consider the following statements.
1. Assam has the highest percentage of poverty according to the Suresh Tendulkar Committee in India.
2. In India, the infant mortality rate per thousand of live births of girls is more than of boys.
Which of the statements) given above is/are correct?
(a) Only 1
(b) Only 2
(c) Both 1 and 2
(d) Neither 1 nor 2
8. Which one of the following indices is most suitable to assess the intensity of poverty in India?
(a) Human Development Index
(b) Gender Inequality Index
(c) Human Poverty Index
(d) Multi-dimensional Poverty Index.
9. Which among the following committee’s recommendations are used for estimating the poverty line in India?
(a) Dutt Committee
(b) Lakdawala Committee
(c) Chelliah Committee
(d) Chakravarty Committee
10.Eleventh Five Year Plan aims to reduce the poverty ratio by what percentage by the year 2012?
(a) 2.0%
(b) 2.5%
(c) 10.0%
(d) 15.0%
11. Disguised unemployment generally means IAS (Pre) 2013
(a) large number of people remain unemployed
(b) alternative employment is not available.
(c) marginal productivity of labour is zero.
(d) productivity of workers is low.
12. The mismatch in the regional or occupational pattern of job vacancies and the pattern of worker availability results in
(a) Structural unemployment
(b) disguised unemployment
(c) altered unemployment
(d) cyclical unemployment
13. Among the following who are eligible to benefit from MNREGA? IAS (Pre) 2011
(a) Adult members of only SC and ST households
(b) Adult members of BPL households
(c) Adult members of households of all backward communities
(d) Adult members of any households
14. Disguised unemployment in India is mainly related to MPPSC (Pre) 2001
1. agricultural sector
2. rural sector
4. urban area
3. factory sector
Select the correct answer using the codes given below.
(a) 1 and 2
(b) 1 and 4
(c) 2 and 4
(d) 2 and 3
15. How does the National Rural Livelihood mission seek to improve livelihood options of rural poor? IAS (Pre) 2012
1. By setting up a large number of new manufacturing industries and agribusiness centres in rural areas.
2. By strengthening Self-Help Groups and providing skill development.
3. By supplying seeds, fertilisers, diesel pump-sets and micro-irrigation equation free of cost to farmers.
Select the correct answer using the codes given below.
(a) 1 and 2
(b) Only 2
(c) 1 and 3
(d) All of the above
Know Right Answer
1 (b)
2 (a)
3 (b)
4 (c)
5 (a)
6 (a)
7 (b)
8 (d)
9 (b)
10 (c)
11 (c)
12(a)
13 (d)
14 (c)
15 (b)
Frequently Asked Questions (FAQs)
1. FAQ: What are the main causes of poverty?
Answer: Poverty is a complex issue with multiple contributing factors. Some primary causes include lack of education, limited access to healthcare, unequal distribution of resources, economic inequality, and systemic issues such as discrimination and social exclusion. Addressing these root causes requires a comprehensive approach that involves education, healthcare reform, social policies, and economic development initiatives.
2. FAQ: How does unemployment impact poverty rates?
Answer: Unemployment significantly contributes to the perpetuation of poverty. When individuals are unemployed, they face a loss of income, which can lead to financial instability and a decline in living standards. Moreover, long-term unemployment can create a cycle of poverty by limiting access to education and job training opportunities. Effective strategies to combat poverty must include policies that address unemployment through job creation, skills development, and support for industries with growth potential.
3. FAQ: What role can governments play in reducing poverty and unemployment?
Answer: Governments play a crucial role in addressing poverty and unemployment through policy initiatives and strategic interventions. Some key measures include:
- Economic Policies: Implementing policies that promote inclusive economic growth, job creation, and equitable distribution of resources.
- Education and Training: Investing in education and vocational training programs to enhance the skills of the workforce, making them more employable in evolving industries.
- Social Safety Nets: Establishing and strengthening social safety nets such as unemployment benefits, healthcare assistance, and food support to protect vulnerable populations during economic downturns.
- Anti-discrimination Measures: Enforcing laws and policies that combat discrimination based on gender, race, or other factors, ensuring equal opportunities for all.
- Infrastructure Development: Investing in infrastructure projects that create jobs and stimulate economic activity.
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