Economics 3 Marks Each

• Mostly poor people cannot satisfy their basic needs like food, clothing and housing.
• Most of their earnings are used in buying edible goods for daily needs.
• This problem is largely addressed through public distribution system in India. Under this system, the government has set-up ration shops where rural and urban poor are sold basic utility goods at reasonable price.
• Even during situations like drought and scarcity the public distribution system takes care that it is able to satisfy basic needs of poor.
• Hence, one can rightly say that public distribution system protects poor from inflating India.

• Poor people mostly cannot satisfy their basic needs like food, clothing and housing.
• Most of their earnings are used in buying edible goods for daily needs. So, effort should be made to provide them nutritive food at reasonable rates.
• This problem is largely addressed through public distribution system in India. Under this system the government has set-up ration shops where rural and urban poor are sold basic utility goods at reasonable price.
• Even during situations like drought and scarcity the public distribution system takes care that it is able to satisfy basic needs of poor. This system largely helps the poor and checks poverty.

• Government frames tax policy so that it can reduce inequality of income and poverty and redistribute income.
• To fulfill this objective government makes such policies wherein more tax is imposed to rich class which can afford that tax and less tax is imposed to poor class and given tax concession.
• This way government collects fund by imposing tax on rich people and makes expense on welfare oriented programmes for poor people. As a result socio-economic conditions of poor improve and reduction is income inequality and poverty is seen.

• The unorganized sector and its labourers have a strong contribution in production and employment.
• National commission has recommended to provide proper working conditions, life Insurance, health facilities, old age pension angl other social security measures to these labourers for improving their condition.
• For small and marginal farmers it is recommended to provide irrigation facilities and loan facility.

• One of the most important reasons for poverty in India is low productivity in agriculture. By increasing the productivity, the agricultural income can be increased which then can reduce the poverty among field labourers.
• In order to achieve this objective, the government conducts various programmes for farmers. Farmers are made aware about latest technology, available resources at reasonable rates, improved infrastructural facilities, maximum price they can procure for their products and regulated market for their produce.
• Development of small scale agriculture will not only increase productivity per labourer but also employment opportunities. This will also help in bringing down the prices.

• India started giving importance to heavy and basic industries ?« a strategy for economic development after its second five year plan.
• By adopting policies of industrialization India hoped to achieve rapid industrialization and high economic growth which would then remove poverty and unemployment.
• The biggest drawback of this policy was that it neglected the majority of the population dependent on agriculture.
• India also neglected small and cottage industries of rural regions which have great contribution in employment, production and income.
• As a result, agriculture and small and cottage industries which gives employment and income to majority of population, developed slowly. So, people occupied in these fields remained poor.
• Apart from this various schemes were introduced during planning period to reduce poverty and unemployment. But, due to change in rolling government many a time the policies were either stopped or were not taken proper care. So, the targeted poverty reduction could not be achieved through these schemes.

• After independence India fought two wars with neighbouring countries, Pakistan and China.
• War involves huge expenses on troops, arms and ammunitions. During wars, the country spends only a limited amount of resources on production and developmental activities. This reduces production of basic goods and services.
• Also, and during wars people stock extra food grains, clothes, fuel, etc. to avoid scarcity of these goods in future. As a result, prices increase rapidly.
• Economic development becomes slow. New projects get delayed, market becomes slow and labourers become jobless. Hence, poverty increases.

• One of the major reasons of poverty in India is lack of education, training and skills.
• Low level of education, especially in rural areas prevent the villagers from taking advantage of the use of new technologies in agriculture, new agriculture system, research and benefit of market to sell their products.
• As a result both, per hectare productivity and per labour productivity in agriculture remain low. This is the chief reason for low income of farmers.
• Since the rural youths remain uneducated they cannot get good job opportunities in other fields except agriculture. This also contributes to their poverty.

Gender inequality:

• There has always been gender inequality in the Indian society. Males are preferred over females from day one.
• Society cares less about health of. females. As a result, women face more problems of malnourishment, low weight and weakness. This causes high infant and mortality during childbirth and health problems among new born child.
• Our set-up is such that there is a belief that women need to remain at home and do household works. So, they remain less or even uneducated and they do not get any economic opportunities to work.
• Apart from this at work places, women are paid less compared to males.
• All these reasons bring down the family income and increase poverty.

• There has always been gender inequality in the Indian society. Males are preferred over females from day one.
• Society cares less about health of. females. As a result, women face more problems of malnourishment, low weight and weakness. This causes high infant and mortality during childbirth and health problems among new born child.
• Our set-up is such that there is a belief that women need to remain at home and do household works. So, they remain less or even uneducated and they do not get any economic opportunities to work.
• Apart from this at work places, women are paid less compared to males.
• All these reasons bring down the family income and increase poverty.

• One of the major reasons of poverty in India is lack of education, training and skills.
• Low level of education, especially in rural areas prevent the villagers from taking advantage of the use of new technologies in agriculture, new agriculture system, research and benefit of market to sell their products.
• As a result both, per hectare productivity and per labour productivity in agriculture remain low. This is the chief reason for low income of farmers.
• Since the rural youths remain uneducated they cannot get good job opportunities in other fields except agriculture. This also contributes to their poverty.

• Majority of rural India is dependent on agriculture and agriculture is dependent on monsoon. Hence, most people can grow only one crop in a year. This results in seasonal unemployment. .
• To make things worse, population in India is quite high and they live jointly. During times of seasonal unemployment it becomes very difficult to bear the expense of the entire family. Majority all the members work in agriculture even when some of them are excess for the work. This results in disguised unemployment.
• Moreover, lack of alternate business opportunities in rural regions increase the unemployment and poverty further.

• Events and situations of war, drought, low national production, rapid increase in demand, increase in production cost, price of goods and services as well as edible goods, etc. rise the price at a much faster rate.
• Price rise reduces purchasing power of low income group.
• It reduces standard of living and increases poverty. On the other side, increasing price benefits businessman, traders and big farmers.
• The society again falls in the trap of unequal distribution of income.

• Zamindars were neither directly associated with land cultivation nor had any interest to invest in agricultural sector. So the real cultivators i.e. farmers became landless and zamindars became land owners.
• The landless farmers had to then work in their own land as tenants and so they had no motivation of work.
• All such factors resulted in poverty among farmers.

• Owing to all these factors, India’s death -rate declined but birth-rate did not reduce. This led to population explosion.
• Due to high population the per capita income did not increase much. Low per capita income and big size of families resulted in poor quality of life.
• There were insufficient employment opportunities for the fast growing population. As a result, people were forced to work in low wages and this made them poorer.

• The British used to frame and follow such trade, tax and industrial policies in -India which would mostly benefit the British.
• Indian exports were prohibited in Europe whereas goods produced in England were given lot of tax concession and freedom” to sale in Indian market. Moreover, to supply these goods to each corner of India, Indians railway was extensively used.
• All such unfair policies made British extremely rich and India extremely poor. -» The British then invested the money earned from India in Britain to speed up industrialisation. This gave faster industrialisation in Britain.
• They sold the goods produced in Britain industries to India at very high prices. -> Indian trade and business started losing their competitive power and production capabilities. This also ruined small cottage industries of India. As a result unemployment and poverty grew more.
• Thus, if we look at the history, the glorious India became a poor victim of the British and since then we are still struggling to handle our economy.

• During the British rule, Indian economy was totally dependent on agriculture. The British did not show any interest in investing money in irrigation project in India. On the other hand repeated droughts, zamindari system, high . tenancy santh system, etc. destroyed economic condition of the farmers.
• Farmers used to be in constant pressure to repay debts and interest of debts of the zamindars, sahukars and big businessmen. Those who could not pay had to sell off their lands to repay.
• Owing to these reasons, farmers and cultivators started losing land and they became both, landless and jobless. This increased poverty.