( Indian Economic Development )

ECONOMICS POVERTY

POVERTY

Poverty:
Poverty refers to a situation in which an individual is unable to fulfill the basic necessities
of life. In other words, it is the ability of a individual to fulfill the minimum requirement of
life like food, clothing, shelter, education and health facilities etc.

Measures of poverty (types of poverty) Poverty is of 2 types:

Relative poverty: It refers to the poverty of people in comparison to other people, regions
or nations. Example- Ramesh has lower income in comparison of Mukesh Ambani;
therefore, we can say that Ramesh is relative poor than Mr. Mukesh Ambani.

Absolute poverty: It refers to the total number of people living below poverty line. In
other words, Absolute poverty refers to a situation when the level of income of an
individual is too low that they cannot even meet their minimum consumption
requirements to maintain their health and work efficiently.

Poverty line:
It refers to a line which divides the population into 2 parts i.e., poor and non-poor In other
words, Poverty line is a cut-off point on the line of distributio, which usually divides the
population of a country as poor and non-poor. Poverty line measures the number of
people who are regarded as poor.

Determination of poverty line:

In India, the poverty line is determined as follows:

 Minimum caloried consumption: The planning commission of India has defined

poverty line on the basis of nutritional requirements. i.e., people who are not
getting 2400 calories per person per day in rural areas and 2010 calories in urban
areas is considered to be living under poverty line.
 Minimum consumption expenditure criteria: Another criterion for determining the
poverty line is the Minimum consumption expenditure criteria. According to this, if
a person won’t be able to made the monthly expenditure of 816 rupees (around 32
rupees per day) in rural areas and 1407 rupees (around 47 rupees per day) in urban
areas comes under poverty line.
Categorizing poverty:

There are many ways to categorize poverty

 Chronic Poor: It includes such people who are always poor and those who are
usually poor.
ECONOMICS POVERTY

 Transient Poor: It includes people who regularly moves in and out of poverty line
(like small farmers) and those who are occasionally poor (seasonal workers)
 Non-Poor: It includes people who are never comes under poverty line. According to
World Bank, if you’re living on $1.90 a day or less, you’re living in extreme poverty.
Causes of Poverty:

 Rapid increase in population: The population of our country is increasing at

alarming rate. This increase in population reduces the availability of natural
resources per head and also decreases the per capita income which ultimately leads
to unemployment and poverty.
 Low level of national output: In comparison with the population growth the net
national product of the economy falls short. The rate of increase in productivity is
miserably low than the rate of increase in population. It automatically leads to
increase in poverty and reduction in standard of living.
 Inflation: One of the most important causes of poverty is the rise in general price
level. Sharp rise in price and negligible change in level of income has decreased the
purchasing power of low-income group and results in lower standard of living.
High level of migration from rural areas:

The crowd of rural areas migrated towards the urban area in search of employment but
the existing industries and limited job opportunity won’t be able to absorb all of these
people and hence this migration leads to unemployment and poverty.

 Unemployment: An increasing rate of unemployment is another major cause of

poverty in the economy. The amount of job seekers are increasing at much higher
rate than that of employment opportunity.
 Rural indebtedness: Condition of unemployment and lack of available resources
complies the people of rural areas to borrow money from unorganized sector at
higher rate of interest, this rural indebtedness is one of the most significant factors
of poverty in rural areas.
 High illiteracy rate: An illiterate person won’t be able to participate in the emerging
employment opportunities in different sectors of the urban and rural areas, as they
do not have the necessary knowledge and skill to do so. This illiteracy is one of the
main cause of poverty in the economy.
Effects of poverty:

 Child labour.
 Lack of nutrition and diet.
 Poor standard of living.
 Illiteracy.
 Unemployment.
ECONOMICS POVERTY

 Lack of hygiene.

Approaches by the government of India to remove poverty:

 Growth oriented approach: This approach is based on the expectation that the
rapid increase in Gross domestic product and per capita income (economic growth)
would spread the benefits to all the sections of society and will automatically
reduces the amount of poverty from the economy.
 Minimum needs programmed: It was introduced in fifth five year plan (1974-78), to
provide certain basic minimum needs and improve the living standards of people. It
aims at social and economic development of the underserved population. It
includes nutrition (via mid day meal scheme), rural water supply, rural
electrification, Elementary education and so on.
 Poverty alleviation programme: The government of India has introduced variety of
programs in order to remove poverty and to enhance the growth and development
of the economy. For example- Prime Minister Rozgar Yojana (PMRY), Mahatma
Gandhi National rural employment guarantee Act (MGNREGA) etc.
Poverty Alleviation programmes in India:

Mahatma Gandhi National rural employment guarantee Act (MGNREGA)

 The national rural employment guarantee Act (NREGA) was passed in 2005 and
lateron it was remained as Mahatma Gandhi National rural employment guarantee
Act (MGNREGA) in 2006 in 200 identified districts of the country.
 Under this act, all those who are willing to work at the minimum wage rate offered,
will get employment for a period of minimum 100 days. In other words, it provides
at least 100 days of guaranteed wage employment in a financial year to every
household who volunteer to do the specified work.
 Those who seeks employment can report in those rural areas where this
programme is being launched.
 It was extended throughout the country in 2008.
Food for work programme:

 Popularly known as National food for work programme.

 It was launched in 2004.
 It aims at providing more opportunities of wage employment and ensuring certain
minimum nutritional levels for the poor population of rural areas.
 The wages for work are paid partly in food grains and partly in cash.
 It was 100% centrally sponsored scheme.
 This programme was incorporated in Mahatma Gandhi National Rural Employment
Guarantee Act (MGNREGA) in 2005.
ECONOMICS POVERTY

Swarna Jayanti Gram Swarozgar Yojana (SGSY):

 It was introduced in April 1999.

 Under this yojana, a large number of small enterprises were established in rural
areas
 It aims at promoting micro enterprises and to bring the assisted poor families above
the poverty line, by organizing them into Self Help Groups (SHGs).
 Self Help Groups are small groups of poor people. They help each other to solve
their problems. SHGs promote small savings among their members. The savings are
kept with the bank with the name of the self help groups. Later on this common
fund is used to give small loans its members.
 The government also provides partial financial assistance to SHGs.

Pradhan Mantri Gram Sadak Yojana:

 It was launched in December 2000.

 It aims at improving road connectivity to all the eligible unconnected habitations in
the rural areas by the end of tenth five year plan (2002-2007).
 A total length of about 3,00,000 km of road work has been completed till November
2010.
Sompoorna Gramin Rozgar Yojana (SGRY):

 Launched on 1st September 2001.

 Its main objective is to
 Provide employment opportunities and food security
 Development of infrastructure
 Focus on development of regional, economic and social conditions.
 Employment assurance scheme and jawahar gram sammridhi yojana have been
merged with SGRY since April 2002.
 SGRY was merged with National rural employment guarantee Scheme in 2006.

Swarn Jayanti Shahari Rozgar Yojana (SJSRY):

 It was launched in 1st December 1997.

 It aims at creating employment opportunities for both self employed and wage
employ in urban areas.
 It encourages setting up of self-employment ventures and or provision of wage
employment.
 It was funded on the 75:25 basis between the centre and the states

It consists of 2 special schemes:

ECONOMICS POVERTY

1. Urban self employment programmes (USEP)

2. Urban wage employment programmes (UWEP)

Other Programme launched by the government is as follows:

 Swarn Jayanti gram swarozgar yojana (SGSY)

 Jawahar gram sammridhi yojana
 Jan dhan yojana
 National rural livelihood mission (NRLM)
 Prime Minister rozgar yojana
 Indra Awas Yojana
 Pradhan Mantri gramodaya yojana

Summary:
 Relative poverty
 Absolute poverty
 Poverty line
 Determination of poverty line
 Minimum calories consumption
 Minimum consumption expenditure criteria
 Causes of poverty
 Rapid increase in population
 Low level of national output
 Inflation
 High level of migration from rural areas
 Unemployment
 Rural indebtedness
 High illiteracy rate
 Approaches by the government of India to remove poverty
 Growth oriented approach
 Minimum needs programme
 Poverty alleviation programme
 Poverty Alleviation programmes in India.
ECONOMICS POVERTY
ECONOMICS POVERTY

Important Questions
Multiple Choice questions-
Q1. Which organization collects data on poverty in India?
(a) Planning Commission
(b) NSSO
(c) CSO
(d) Election Commission
Q2. Which of the following statements about absolute poverty is not correct?
(a) It focuses on biological needs.
(b) Levels of absolute poverty are very low in developed countries.
(c) Government policies can help in the elevation of absolute poverty.
(d) It compares the living standard of people.
Q3. Which of the following people are classified as churning poor?
(a) Who are always below the poverty line
(b) Who regularly move in and out of poverty
(c) Who generally remain above the poverty line but sometimes below it
(d) None of the above
Q4. When was the Task Force on Projections of Minimum Needs and Effective Consumption
Demand was formed?
(a) 1969
(b) 1979
(c) 1989
(d) 1999
Q5. Those who regularly move in and out of poverty are called
(a) Chronically poor
(b) Churning poor
(c) Occasionally poor
(d) Transient poor
Q6. Poverty is a state in which a person is : –
(a) Poor
ECONOMICS POVERTY

(b) Does not has proper home

(c) Inability to fulfil basic requirements
(d) None of these
Q7. Which of the following is an action adopted under the provision of minimum basic
amenities to the people?
(a) Prime Minister’s RozgarYojna
(b) Swarna Jayanti Shahari RozgarYojna
(c) Pradhan Mantri Gramodaya Yojna
(d) National Rural Livelihood Mission
Q8. In 2011-12, which state had the highest poverty rate in India?
(a) Odisha
(b) Bihar
(c) Madhya Pradesh
(d) West Bengal
Q9. NFWP was launched in:
(a) November 2004
(b) December 2003
(c) November 2002
(d) December 2005
Q10. Which of the following programmes provide assistance to elderly people are given
under?
(a) VAMBAY
(b) NSAP
(c) PMGY
(d) PMRY
Q11. People who are always below poverty line are termed as
(a) Chronic poor
(b) Seasonal poor
(c) Always Poor
(d) None of these
Q12. Which category of poor includes both ‘Always’ and ‘Usually’ poor.
ECONOMICS POVERTY

(a) Churning poor

(b) Transient poor
(c) Seasonal poor
(d) Chronically poor
Q13. Which category of poor people keep moving up and down the poverty line: –
(a) Occasionally poor
(b) Transient poor
(c) Churning poor
(d) Always poor
Q14. The poverty across other people, regions or countries is known as
(a) Urban poverty
(b) Rural poverty
(c) Relative poverty
(d) Absolute poverty
Q15. What is the cause of poverty?
(a) Low Rate of Growth
(b) Increasing Population
(c) Underemployment
(d) All of these
Very Short:
1. What do you mean by poverty?
2. What proportion of the world’s poor live in India?
3. How many children under the age of five die annually in India according to UNICEF?
4. Name the two key features of poorest households.
5. What are the factors responsible alarming malnutrition among the poor?
6. Define poverty line.
7. What was the percentage of population below poverty line in 2011-12 in India?
8. Name the two types of poverty.
9. Define absolute poverty.
10. What is relative poverty?
ECONOMICS POVERTY

Short Questions:
1. Who are the poor?
2. What are the problems faced by the poor?
3. List the initiatives undertaken in post-independent lndia to work out a mechanism to
identify the number of poor.
4. Why is the calorie requirements in rural areas are considered to be higher than urban
areas?
5. Write a short note on the changes in the trends of poverty ratio and the number of poor
during 1973-2012.
6. Give a brief description of inter-state disparity in terms of poverty in India.
7. What impact did the British rule had on the Indian economy?
8. What makes farmers commit suicide?
Long Questions:
1. Discuss per capita expenditure method of determining poverty line? What are its
limitations?
2. What are the causes of poverty in India?
3. Suggest measures to remove poverty in India.
4. Explain the self-employment and wage generation approach of the government for
poverty alleviation.
5. Explain the self-employment and wage generation approach of the government for
poverty alleviation.
Case Study Based Question-
1. Read the following hypothetical text and answer the given questions: -
The poverty lines refer to a cut-off point that divides people of a region as poor and non-
poor. Poverty line cutoff may be determined in the terms of income or in terms of
consumption. The percentage of the population below the poverty line is called the
headcount ratio. the poverty incidence ratio is the same as the headcount ratio.
Headcount ratio refers to the measurement of poverty in the term of number of person
below the poverty line, where the poverty line means some cutoff point with respect to
the individual consumption expenditure per month. The poverty line usually measured in
terms of per capita expenditure.
Consumption reflects the actual use of goods and service by an individual as well as the
type of goods used while income only shows the capacity to purchase.
Questions:
ECONOMICS POVERTY

1. A cut off point dividing people as poor and non-poor indicates the number of those
who are:
(a) absolute poverty
(b) below poverty line
(c) both a and b
(d) none of the above
2. The absolute poverty in India is measured with reference to ____________.
3. Poverty line cut off can be determined in terms of ___________
(investment/consumption)
4. Poverty line is measured normally in terms of _________ (per capita expenditure/per
capita income)
2. Read the following hypothetical text and answer the given questions: -
This paragraph talks about economic inequalities in India that have been driven by the
employment pattern and changes in labour market, which in turn have been affected by
the macroeconomic policies and process as well as forms of social discrimination and
exclusion. While many Asian economies have shown indications of rising inequalities in
recent decades, the Indian experience is particularly remarkable in the way inequalities
have intertwined with economic growth process. structural change and the persistence of
the low productivity employment in India are strongly related to following wage shares of
national income and growing wage inequality and the close relationship between formal
and informal sectors is the sharpest exemplar of this. patterns of social discrimination
along with gender and caste line have reinforced tendency to create segmented labour
market that offer little incentives for the employers to focus on productivity
improvement.
Questions:
1. Why did the government shift its strategy from long term to short term programs to
remove unemployment?
(a) Short term policies are more effective
(b) Long term policy do not give appropriate response
(c) It is easy to check the progress
(d) All the above
2. Increase in the proportion of casual worker as the proportion of the total work force is
known as ________________ (informalization/casualization)
3. __________is used to measure the concept of relative poverty.
4. Women participation in rural areas is found to be higher in rural areas as compared
ECONOMICS POVERTY

with area in India due to which the following reason.

(a) Widespread poverty
(b) Male member do not earn sufficient income
(c) Wages level are low in rural areas
(d) all the above.
Assertion Reason Type Question-
1. In these questions, a statement of assertion followed by a statement of reason is given.
Choose the correct answer out of the following choices.
a. Both assertion (A) and Reason (R) are true and reason (R) is the correct explanation
of assertion (A).
b. Both assertion (a) and reason (R) are true and Reason (R) is not the correct
explanation of assertion (A).
c. Assertion (A) is true but Reason (R) is false.
d. Assertion (A) is false but reason (R) is true.
Assertion: The Average per capita daily requirement of 2400 calories in rural areas and
2100 calories in urban areas.
Reason: Because rural areas people do more labor in comparison to urban areas. that’s
why more calories is required in rural areas.
2. In these questions, a statement of assertion followed by a statement of reason is given.
Choose the correct answer out of the following choices.
a. both assertion (A) and Reason (R) are true and reason (R) is the correct explanation
of assertion (A).
b. Both assertion (a) and reason (R) are true, and Reason(R)is not the correct
explanation of assertion (A).
c. Assertion (A) is true but Reason (R) is false.
d. Assertion (A) is false but reason (R) is true.
Assertion: absolute poverty is prevalent in developed economics.
Reason: most developed economics are industrialized economy.

Answers key
MCQ answers:
1. (b) NSSO
2. (d) It compares the living standard of people.
ECONOMICS POVERTY

3. (b) Who regularly move in and out of poverty

4. (b) 1979
5. (b) Churning poor
6. (c) Inability to fulfil basic requirements
7. (d) Pradhan Mantri Gramodaya Yojna
8. (a) Odisha
9. (a) November 2004
10. (b) NSAP
11. (c) Always Poor
12. (d) Chronically poor
13. (c) Churning poor
14. (c) Relative poverty
15. (d) All of these
Very Short Answers:
1. Answer: Poverty is the inability to secure the minimum consumption requirements for life,
health and efficiency.
2. Answer: One-fifth of the world’s poor live in India.
3. Answer: About 2.3 million children under the age of five die India per annum according to
UNICEF.
4. Answer: The two key features of poorest households are hunger and starvation.
5. Answer: Ill health, disability and serious illness are the factors responsible for alarmingly
high malnutrition among the poor.
6. Answer: Poverty line estimates the minimum level of income that is considered
appropriate to secure basic necessities of life.
7. Answer: 22 percent of India’s population lived below poverty line in 2011 -12.
8. Answer: The two types are absolute poverty and relative poverty.
9. Answer: Absolute poverty determines the minimum physical quantities of requirement for
a subsistence level, with the help of poverty line.
10. Answer: Relative poverty refers to lack of resources in relation to different classes regions
and countries.
Short Answers:
1. Answer: We can see poor residing in our localities both in rural and urban areas. Some of
ECONOMICS POVERTY

the most vulnerable groups are urban casual labourers, rural agricultural labourers,
scheduled castes and scheduled tribes. These people possess very few assets and live in
very miserable conditions. They live in kutcha houses made of baked mud and root grass.
They neither have any land to cultivate nor can they afford even two meals a day. Hence,
they are malnourished and physically weak. Moreover, they are deprived of decent
economic opportunities, which could raise their standard of living and lifestyle. They are
illiterate, jobless as well as voiceless and powerless. Better-off people often exploit them.
2. Answer: Following are the problems faced by the poor:
 They suffer from chronic indebtedness borrow from money lenders who charge
high rates of interest, which leads them into poverty.
 They are not able to negotiate with employers for legal wages and are exploited.
 They do not have access to electricity and safe drinking water.
 The primary cooking fuel is firewood and cow dung cake.
 There exists extreme gender inequality in the participation of employment,
education and decision-making within the family.
 Women in poor households receive less care on their way to motherhood and
hence, their children are less likely to survive or be born healthy.
3. Answer: The initiatives undertaken in post-independent India to work out a mechanism to
identify the number of poor are:
(i) A Study Group was formed by the Planning Commission in 1962.
(ii) Task Force on Projections of Minimum Needs and Effective Consumption Demand was
formed in 1979.
(iii) ‘Expert Groups’ were also constituted for the same purpose in the years 1989 and
2005.
4. Answer: The consumption levels in the rural and urban areas are quite different. The
calorie intake differs depending upon the age group, eating habits, type of work, climate
and consumption level.
The accepted average calorie requirement in India is 2400 calories per person per day in
rural areas and 2100 calories per person per day in urban areas. The calorie requirements
in rural areas are considered to be higher than urban areas because people living in rural
areas engage themselves in more physical work.
5. Answer: During 1973 -74 and 2011 -12, the poverty ratio has declined continuously for
Doth urban and rural areas. There has also been a decline in the absolute number of poor.
However, the ratio is declining much slower than the absolute number of poor in the
country. While the gap between the absolute number of poor in rural and urban areas got
reduced, the gap between rural and urban poverty ratio has remained the same until
ECONOMICS POVERTY

1999-2000. The gap between ratios has in fact widened in 2004- 10.
6. Answer: The proportion of poor people is not the same in every state. The state level
poverty has witnessed a significant decline compared to the levels of early seventies.
However, the rate of success of reducing poverty varies from state to state. According to
recent estimates, many states and union territories have poverty ratio less than the
national average. On the other hand, poverty is still a serious issue in Odisha, Bihar,
Madhya, Pradesh and Uttar Pradesh.
7. Answer: The British rule had a substantial negative impact on the Indian economy and
standard of living of the people.
 There was a sharp increase rural tax, which made merchants and moneylenders
exploit the borrowers.
 India began to export food grains under the British, which lead to death of 26
million people in famines between 1875 and 1900.
 The British rule impoverished millions of people in India.
8. Answer: Landless farmers are poor and they do not have sufficient money to buy modern
equipment for producing crops. In order to adopt developed techniques of production in
agriculture, they take loans from moneylenders, who charge them very high rate of
interest.
However, if the crop fails due to drought or other natural calamities, it causes distress
among the farmers. They commit suicide due to their inability to repay the loans that they
have taken for cultivation.
Long Answers:
1. Answer: Per capita expenditure method determines poverty by the monetary value of the
minimum calorie intake. The minimum calorie intake was estimated at 2,400 calories for a
rural person and 2,100 for a person in the urban area.
On the basis of this, the poverty line was defined worth ₹ 816 as consumption per person
a month for rural areas and ₹ 1,000 for urban areas for the year 201 1-12. Limitations of
Per Capita Expenditure Method of Determining Poverty Line
(i) It groups all the poor together, without differentiating between the very poor and the
other types of poor.
(ii) It takes into account only expenditure on food and a few select items. With this
mechanism, it becomes difficult to identify who among the poor need the most help.
(iii) Various factors such as accessibility to basic education, health care, drinking water
and sanitation are ignored while developing poverty line.
(iv) Social factors such as illiteracy, ill health, lack of access to resources, discrimination or
lack of civil and political freedoms trigger and perpetuate poverty. These are also not
ECONOMICS POVERTY

taken into consideration while determining poverty line.

2. Answer: The main causes of poverty in India are the following:
Underdeveloped Nature of the Economy: Indian economy is an underdeveloped
economy. Its per capita income is low. Thus, its underdeveloped nature is closely
associated with poverty, Rapid Growth of Population; Rapid growth of population in
already overpopulated countries I like India is one of the main causes of poverty. With the
increase in population, the national income increases, however, the per capita income
remains more or less the same.
Unstable and Casual Nature of Employment’ The poor people lack basic literacy and skills.
: As a result, they have very limited economic opportunities and face unstable
employment.
A large number of rural poor migrate to urban areas in search of employment and
livelihood. The industries in cities, however, are not able to absorb all these people. The
urban poor are either I unemployed or intermittently employed as casual labourers.
(iv) Predominance of Agriculture: Agriculture is the principal means of livelihood and land
is the primary assets of rural people. Productivity of land is an important determinant of
material well being. But the productivity of land in India is very low and thus, people
remain struck in poverty.
(v) Failure of Land Reforms: Since independence, the government attempted to take lands
from those who are having large amounts of land and allot to those who do not have any
land but work on lands as wage labourers. This policy of land reforms was successful only
to a limited extent.
This has left the large section of agricultural workers, scheduled castes and scheduled
tribes as wage labourers. As a result, this group of population remained unable to possess
assets or skill and remained struck in poverty.
(vi) indebtedness of the Farmers: Due to the adoption of developed techniques of
production in agriculture, farmers had taken loans. In recent times, many farmers
committed suicide due to their inability to pay back the loans. This indebtedness makes
the people unable to raise their income and thus, remain struck in poverty.
(vii) Increase in Prices: The continuous and steep price rise adds to the miseries of poor.
Although, it benefits a few people in the society (businessmen), the persons in lower
income group find it difficult to meet even their minimum needs.
(viii) Unequal Distribution of Income and Wealth: Unequal distribution of income and
wealth has also led to persistence of poverty in India. This has generated two distinct
groups of ‘have and have not’ in society. One group comprises those who possess the
means of production and earn their income while the other group consists of those who
rely on their labour power for subsistence. The gap between these groups has widened
over the years thereby worsening the position of the poor.
ECONOMICS POVERTY

3. Answer: The problem of poverty is a big danger to the unity of India. Although the
government has adopted many programmes, covering different aspects together,
following measures can also be undertaken to remove poverty:
(i) Population Control: Growing population is a major cause of poverty in India. Hence, it is
necessary to control it. Family planning programme should be implemented effectively.
(ii) Creation of More Employment Opportunities: Though it has been stated in our
Constitution that the government would provide employment opportunities to all, but
unemployment is still a big problem in India. It is also responsible for poverty. Hence, it is
essential to promote employment through intensive skill development technology.
(iii) Increase in Production: Industrial and agricultural production should be increased to
remove poverty. Present capacity should be utilised fully and new techniques should be
adopted. Proper coordination should be there between large scale and small scale
industries. Superior seeds, manures, fertilisers and modern methods of production should
be adopted for agricultural development. Necessary irrigation facilities should be made.
(iv) Check on Price Rise: Price rise is also responsible for poverty in India. It decidedly goes
against the interests of the poor. Thus, price rise must be checked through proper fiscal
and monetary policies and other measures.
(v) More Emphasis on Small, Rural and Cottage Industries: Small scale and cottage
industries have not developed fully in India, The government should adopt effective
methods to expand small and cottage industries, which will increase the self-employment
opportunities for the poor.
(vi) Stepping-up Capital Formation: Low rate of capital formation is a major hindrance in
the way of fast economic development. Capital formation rate, therefore, must be
increased. As it basically depends on the saving rate, every possible effort should be made
to increase savings and their mobilisation.
(vii) Equal Distribution of Income and Wealth: One cause of inequitable distribution of
income and wealth is that economic and employment opportunities are not equal for all.
This inequality should be reduced. The poor should be given priority in employment
opportunities. Tax system should be developed in such a way that income and wealth
does not get concentrated in a few hands.
(viii) Effective Implementation of Programmes Designed to Attack Poverty: Undoubtedly,
the government has implemented many programmes to attack poverty. It is unfortunate
that these programmes have not been proved helpful to the poor because of ineffective
implementation. Many social and political factors are responsible for it. Therefore,
effective implementation of these programmes is necessary if poverty is to be reduced.
4. Answer: Government’s approach of self-employment and wage generation was initiated
from Third Five Year Plan (1961 -66) and has been enlarged successfully since then. The
following programmes have been initiated by the government from time to time under
ECONOMICS POVERTY

this approach:
(i) Food for work Programme (FWP): FWP was launched in the 1970s for the upliftment of
the poor. Under this programme, foodgrains are distributed against the wage work.
(ii) Prime Minister’s RozgarYojana (PMRY): This programme has been implemented by the
Khadi and Village Industries Commission, which aims at creating self-employment
opportunities in rural areas and small towns. One can get financial assistance with bank
loans to set up small enterprises under this programme.
Under PMRY, the educated unemployed from low-income families in both rural and urban
areas can get financial help to set up any type of industry which generates employment.
(iii) Swarna Jayanti Shahari RozgarYojana (SJSRY): It aims at creating employment
opportunities, both self-employment and wage employment in urban areas. Individuals
were given financial assistance under self-employment programmes.
(iv) Swarnajayanthi Gram SwarozgarYojana: Sawarnajayanthi Gram Swarozgar Yojana was
launched in April 1999 and is the only self-employment programme currently being
implemented. It aims at promoting micro enterprises and to bring the assisted poor
families (Swarozgaris) above the poverty line by organising them into Self-Help Groups
through the process of social mobilisation, training and capacity building and provision of
income generating assets through a mix of Bank Credit and Government subsidy.
(v) Sampoorna Grameen RozgarYojana (SGRY): SGRY was launched in September 2001.
The schemes of Jawahar Gram Samridhi Yojana and Employment Assurance Scheme have
been fully integrated with SGRY.
The objective of the scheme is to provide additional wage employment along with food
security, creation of durable community, social and economic assets and infrastructure
development in the rural areas. The scheme envisages generation of 100 man days of
employment in a year.
(vi) National Food for Work Programme (NFWP): National Food for Work Programme was
launched on November 14, 2004 in 150 most backward districts of the India. It is
implemented as a 100 per cent centrally sponsored scheme and the foodgrains are
provided to States free of cost. The objective of the programme was to intensify the
generation of supplementary wage employment.
5. Answer: Programmes under minimum basic needs providing approach are expected to
supplement the consumption of the poor, improve health and education and create
employment opportunities. Government has adopted the following programmes under
this approach:
(i) Pradhan Mantri Gram SadakYojana (PMGSY): This programme aims at building all-
weather roads by 2007 in all villages having population of 500 persons.
(ii) Pradhan Mantri GramodayaYojana (PMGY): PMGY was launched in 2000-01 in all the
ECONOMICS POVERTY

states and union territories in order to achieve the objective of sustainable human
development at the village level. The PMGY envisages allocation of Additional Central
Assistance to the States and Union Territories for selected basic minimum services in
order to focus on certain priority areas of the government.
Initially, PMGY had five components viz. primary health, primary education, rural shelter,
rural drinking water and nutrition. Rural electrification has been added as an additional
component from 2001 -02.
(iii) Valmiki Ambedkar AwasYojana (Vambay): This programme was launched in December
2001 to facilitate the construction and up-gradation of dwelling units for the slum
dwellers. It also aims to provide a healthy and enabling urban environment through
community toilets under ‘Nirmal Bharat Abhiyan’ a component of the scheme.
(iv) National Social Assistance Programme (Nsap): The government initiated National
Social Assistance Programme under which, homeless elderly people are given pension to
sustain themselves. The programme also covers poor and destitute women.
Case Study Answer-
1. Answer:
1. a) absolute poverty
2. Poverty line
3. Consumption
4. per capita expenditure
2. Answer:
1. d) All of the above
2. Casualization
3. Gini Coefficient
4. d) all the above
Assertion Reason Answer-
1. a) both assertion (A) and Reason (R) ARE true and reason (R) is the correct explanation of
assertion (A).
2. b) Both assertion (a) and reason (R)are true, and Reason (R) is not the correct explanation of
assertion (A).