5 Marks Each

Question 15 Marks

Discuss the measures to reduce poverty in India.

Answer

India has taken following measures to reduce poverty during planning period.
$1.$ Steps to increase agricuitural productivity:

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.

$2.$ Development of small scale industries:

In India small and cottage industries immensely contribute in gross national income and employment. So, if small and cottage industries can be developed and encouraged then poverty can be reduced on a larger scale.
Favourable environment, reducing controls, making available raw material, providing loans and technology and market to sell final goods are few developmental activities that the government should undertake.

$3.$ Development of unorganized sector:

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.

$4.$ Use of appropriate tax policy:

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.

$5.$ Rise, in human capital investment:

Developed nations make large investment on education, skill development, etc. and so have very low unemployment. Hence, poverty is less in such countries.
High level of education satisfies the requirement of various employment opportunities and choices among workers. Skill development increases the productivity of worker and that is reflected in high wages that they earn.
In order to achieve this objective continuous investment is required for training and research.

$6.$ Goods and services at reasonable rate:

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.

$7.$ Employment programmes:
Government has rolled out several employment programmes to employ people and hence eradicate poverty. The programmes are:

Integrated Rural Development Programme $\text{(IRDP)}$ / Suvarana Jayanti Gram Svarojgar Yojna $\text{(SGSY)}$
Wage Employment Schemes
Prime Minister Rojgar Yojna $\text{(PMRY)}$
National Rural Employment Guarantee Act, $\text{2005 (NREGA)}$
Housing Schemes
Social Security Schemes
Jan Dhan Yojna

$8.$ Housing Schemes:

Till date in India, a majority of poor people live in temporary houses.
With an objective to provide proper dwelling to poor, Indira Awas Yojna was started in $1985-86$ for families below poverty line and schedule caste schedule tribe.
In $2013-14,$ Rajiv Gandhi Yojna was implemented to improve the housing of those who reside in huts.
To solve the dwelling problem of urban poor, Prime Minister Awas Yojna $\text{(PMAV)}$ was started on $25th$ June, $2015.$
Although housing schemes serve the purpose of dwelling, but simultaneously they also create employment for people who work in their construction project.

$9.$ Social security schemes:

As a strategy to reduce poverty in India, various social security schemes were, started for workers of unorganized sector.
Atal Pension Yojna $\text{(APY)}$ was started on $9th$ May, $2015$ to provide monthly pension to people above $60$ years.
Along with the pension scheme a scheme called Prime Minister Security Scheme was also launched. Under this scheme, people in the age of $18$ to $70$ years are provided accident insurance of $₹ 2$ lac at a very low premium of $₹ 12.$ Under Jivan Jyoti Scheme people are provided life insurance of $₹ 2$ lakhs at a premium of $₹ 330$ per year.
To safeguard farmers from crop failure Prime Minister Fasal Bima Yojna was $\text{(PMFBY)}$ started.

$10.$ Jan Dhan Yojna:

To hit the roots of poverty through financial inclusion an ambitious scheme called’Pradhanmantari Jan Dhan Yojna was stated on $28th$ August, $2014.$
The objective of this scheme was to bring those people under banking who do not have bank accounts and hence reduce regional inequalities.
This Yojna was started and the main purpose was that the subsidy given to poor families by government should directly go to their bank account.

Conclusion:
The government has put several efforts to reduce poverty. However, owing to a very large and scattered population still a lot of effort has to be put to eradicate poverty completely from India.

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Question 25 Marks

Discuss the nature and causes of poverty.

Answer

Natural causes:

India has been an agricultural country from beginning. Even today majority of the population lives in villages and is dependent on agriculture.
In India, agriculture is mainly dependent on natural factors like rain, weather conditions, etc. Frequent droughts, uncertainty of monsoon and floods result -in low production and less and uncertain income for people involved in agriculture. Hence, nature has become a cause for poverty.

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Question 35 Marks

What is Poverty? Explain its indicators.

Answer

$1.$ Meaning of poverty:

Poverty is a man-made problem.
The people of the society which can not satisfy their basic facilities are called poor.
The concept of poverty is related with primary needs.
The people of the society which cannot even satisfy their minimum requirements are said to be poor and if this situation is more in society then it is called widespread poverty.
The question of poverty is everywhere whether it is developed country or developing country.
The meaning of poverty is changed according to time, place, and society.
The standard determining the poverty are different in developed and developing countries.
In this context, poverty can be divided into two parts:
(1) Traditional meaning of poverty (income poverty)
(2) Modern meaning of poverty (non-income poverty).

$(1)$ Traditional Meaning of Poverty:

According to income definition of poverty, "A certain normative minimum level of per capita consumption expenditure required to ascertain minimum basic needs and services is called poverty line."
All people, who have less than required income are said to be poor.
It means that poverty is a state of scarcity. Poverty line is a minimum standard.
The concept of poverty line is shown on the basis of different criteria.
In India poverty line is defined in required calories or minimum expenditure required to get minimum calories.
According to this standard rural people should get food with $2400$ calories and in urban areas $2100$ calories is required.
But the limitation of this method is that.
It only show the situation of non availability of food.
Poverty is not situation of starvation but is more than starvation.
In this concept, minimum required food, clothing, housing, education, pure drinking water, health, cleanliness are also included.
The concept of traditional poverty only give the idea of poverty but intensity is only measured by modern meaning of poverty.

$(2)$ Modern Meaning of Poverty:

The modern economists Mahbub $UL$ Haq and Amartya Sen have given great devotion to this topic.
This concept is also known as non-income poverty.
As per their theory, the income poverty is one of the important elements of poverty but it only reflects a single aspect of human life.
As compared to rich people, poor people get less freedom of choice and also live life without freedom.
So to get exact meaning of poverty not only income but also knowledge, long and healthy life, good standard of living, individual freedom, availability of opportunities and a life of choices, self respect etc.
should be also considered.
$UNDP,$ who is preparing development report through $HDI$ (Human Development Index) and $HPl$ (Human Poverty Index), included three important parameters namely, knowledge, health and standard of living.
Under which knowledge literacy rate and enrollment ratio are measured, for health life expectancy at the time of birth is measured and for standard of living per capita income at Gross Domestic Product is considered.

$2.$ Indicators of Poverty:

The level of poverty and their components are called the indicaters of poverty.
To understand poverty of any country, the indicators of poverty are most powerful elements.
Through indicators we can easily find out the types and level of poverty.
The main indicators of poverty are low per capita, household expenditure, malnutrition, life expectancy, infant-mortality rate, medical facilities, drinking water, toilets, housing, electricity consumption, education etc.

$(1)$ Low per Capita Household Expenditure:

The per capita household expenditure of any country is very important indicator of poverty.
Per capita household expenditure depends on low per capita income.
Per capita household expenditure is the amount of income a family spends on an average on consumption of goods and services.
To calculate per capita household expenditure, the nation's total spending on such goods like cars, computers, washing machines, $T.V.$, mobiles, $A.C.$ are divided by the total population.
Per capita house hold income and expenditure shows the countries expenditure on standard of living and luxurious product.
The per capita consumption expenditure for developing countries is much lower than that of the developed countries and in this sense, developing countries are poor.
E.g. The following table indicates per capita consumption expenditures.

Countries	Fixed Price of $2005$ in $US$ Year $2014$
$US$	$31,469$
$UK$	$25,828$
Japan	$22,149$
China	$1420$
India Pakistan	$725$ $603$

According to the above information on the basis of the base year price of year $2005$, in the year $2014$, the per capita household expenditure in developed countries in $US$ is $31,469, UK$ is $25,828$ and Japan is $22149$ while in developing countries like India is $725$, China $1420$ and Pakistan $603.$
It shows the poverty of Nation.
As compared to $U.K.$ and $US.$
India's per capita consumption expenditure is almost around $40$th part, which shows India's poverty.

$(2)$ Level of Malnutrition:

Normally a human take calories, proteins. carbohydrates, vitamins and minerals in the meal.
To calculate poverty these all ratio are also measured.
The person who is not getting nutritive food are called malnutrition person.
As compare to developed country the malnutrition ratio is high in developing country.
In India, inspite of an increase in agricultural production, people with low income are unable to get nutritive food because of low per capita income and unequal distribution of Income.
According to $FAO, 2015$ report, the situation of f00d security in India is ranked $2$nd in the world in measurement of malnourishment which indicates poverty in India.
There are $793$ million malnutritious people in the world.
It means almost $13%$ of the total population of the world.
According to economic survey in India following measurement are shown.

Year	Total Malnourised People (in %)
$1990-92$	$23.7$
$2000-02$	$17.5$
$2005-07$	$20.5$
$2010-12$	$15.6$
$2014-16$	$15.2$

According to table from last $2_2^1$ decade, the ratio was decreased but still it is $15.2 \%$ in $2014 - 16$ . It indicates the poverty of India.

(3) Life Expectancy and Infant Mortality:

Life expectancy means that how long new born baby is expected to live on an average.
The Average life expectancy of the people in a country is based on nutritive food, cleanliness, pure drinking water and health service.
Mostly rich people can get all facilities more than poor people.
Same as in developed countries these all facilities are more than developing country.
Poor people are deprived of such facilities so they have low life expectancy.
Infant Mortality means number of death taking place per thousand children born before reaching the age of one year.
According to experts view, death rate of new born babies before completion of a year in a country is called Infant Mortality Rate.
The rate of infant mortality depends on income, health service, mother's health and education, vaccination, nutritious food etc.
This type of service is not fulfilled by poor people and that is the main reason for child death before completion of one year.
As compared to rich people infant mortality rate among poor pepole is high.
Infant Mortality is also an indicator of poverty in respect to poor health services.
Life expectancy and infant Mortality rates of various countries of the world are shown as below

Countries	Life expectancy (in years)(year 2014)	Infant Mortality
Norway	$81.6$	$02$
$USA$	$79.1$	$06$
Srilanka	$74.9$	$09$
China	$75.8$	$10$
India	$68.0$	$39$

As per the above table the life expectancy in Norway is highest, $81.6$ years and lowest infant mortality rate is $02.$
In comparison to this, developing countries have low life expectancy and high infant mortality rate.
It indicates the poverty.
E.g. In $2014$ The life expectancy is Srilanka was $74.9$ years, China $75.8$ years and in India )only $68.0$ years.
It means India's life expectancy is lower than Srilanka and China.
In case of infant mortality rate, India has highest rate as compare to another country.
E.g. In Norway only $02$ child die per thousand, in America $06$, in Srilanka $09$, in China $10$ whereas in India $39$ children died per thousand. It shows very high infant mortality rate in India.
In short, in $2014$ India's life expectancy was $68$ and infant mortality rate was $39$ shows the poverty of India.

$(4)$ Medical Facilities:

The scarcity of doctors and medical facilities are important part of indicators of poverty.
People are often victimized in developing countries because of low health and medical facilities.
These types of poor do not to get nutritious food and that is why their immunity power is less.
In health sector doctors, nurses, compounder's, medicines etc. are included and their scarcity adversely affects health services.
The government also ignores such type of things.
The situation of India as compared to other countries is very poor in medical services and doctors.
The condition of village people is very bad in medical facilities.
In developing countries every year $1.7$ crore people die from diarrhoea, malaria and $TB.$
In whole world $2.3$ Crore people are suffering from $AIDS$ and most of them are poor people.
It means out of this $90%$ belong to the developing economies.
In developing countries only $1$ doctor is available for six thousand population. Where as in developed countries $1$ doctor available one for every $350$ people.

$(5)$ Drinking Water:

One indicator of poverty is drinking water.
Health is very much connected to drinking water and facilities of cleanliness.
Due to scarcity of pure drinking water people often get water diseases.
Mostly poor people are suffering from this situation.
In short, the dirty and unhygienic water is root of diseases.
According to census Report $2011$, in India $63.3%$ families get pure drinking water through treated source.
$8.67%$ families get untreated tap water, $26%$ people get water from other sources such as well, hand pump, spring, river, canal, ponds.
In the absence of pure drinking water populated water increases the chances of water borne diseases.

$(6)$ Provision of Toilets:

Cleanliness is important aspect with pure drinking water.
To avoid water.
To borne diseases cleanliness is most important indicators.
Due to scarcity of toilet in the houses and society, people are going outside for toilets.
It creates pollution in the society.
The scarcity of toilets for poor people in developing countries is one of the indicators of poverty.
According to one report $70%$ of Indian people live in slum area or unhygienic areas.
In countries only $66%$ houses have toilet facilities while $34%$ houses are without toilets facilities.
Lack of cleanliness, pollution and physical weakness keeps the production and productivity level low.

$(7)$ Housing:

Housing facilities is also one of the indicators of poverty.
The developing countries like India, Pakistan is facing lack of housing facilities.
In this type of situation people are living in slums and dirty areas.
"Food, cloth and shelter (housing)" are basic need for human being.
Types of housing facilities decides the level of poverty.
Construction of a house, Varandah, members in a house, tap in the house, drainage facilities in the house, electricity facilities etc. and the percentage of houses with these facilities decides the level of poverty.
Most of the houses in India comprise of one room facility and number of family members are more.
These type of houses are not having drainage facilities, electricity facilities etc.
Many people live without houses near airport or railway station and under the over bridge.
In India 60 crore peeple have dwellings which are dangerous for their health and risky for their lives.

$(8)$ Electricity Consumption:

One of the major factors in the development of any country is electric facility. In any country per capita consumption of electricity is useful in taking decision about economic development and physical quality of life.
As compared to developed countries the level of consumption of electricity is lower in developing countries.
India produced maximum and more production of electricity but due to high population and low level of income the electron city consumption is lower.
E.g. per capita electricity consumption in $US. 12985$ kw, Japan $7836$ kw, $UK. 5407$ kw, while in India only $765$ kw.

$(9)$ Education:

The Development any country is depends on literate and trained employees.
In developing countries literacy and training both are at low quality rate, so production, is also low and because of that they get low salary.
Low education makes them conservative and rigid and they are also not ready to accept the changes.
According to World Bank People in the age group of $15$ years and above, who can read and write are literate, and the rest are illiterate and they are mostly poor.
In developed countries $100%$ people are literate.
In $2011$ Brazil had $91%$ literacy rate whereas in India it was $74.04%$, in Nepal $60%$ and Pakistan $55%$ which shows that in developing countries, the literacy rate is comparatively very less.
As compared to male, the females are more illiterate.
Low education is both cause and effect for poverty.
Only level of per capita income cannot give the right estimate of poverty in the world.
A country with high per capita income can have high number of people below poverty line.

$(10)$ Unequal Distribution of Income and Property:

The poverty in the world not only depend on per capita income but also depends on distribution of income and property.
If any country's per capita income is more but on another side unequal distribution of income is created then there is possibility of poverty in the country.
Mostly in developing countries the size of poor families are big, and the sources of income and resources are low which create low income ratio.
The benefits of economic development are taken by only rich people and poor people can't get it.
After 1991 economic reforms, economic growth and per capita income have increased sharply in India due to unequal distribution of income; larger reduction in poverty is not noticed.
On one hand we see rich class of people with high standard of living and enjoying good facilities and on other hand, we find low income people living in slums and deprived of basic necessities like food, education and health.
The table shows, the actual income of $1%$ top rich class in $USA, UK$ and India.
Share of actual income to top $1%$ Rich Class.

Country	Year $1998$	Year $2012$
$USA$	$15.2$	$18.9$
$UK$	$12.5$	$12.7$
India	$9.0$	$12.6$

According to above information in $USA$ rich class person increased $3.7%, UK. 0.2%$ while in India $3.6%.$ For India it can be said that the advantage from economic reforms were more in favor of the rich.
So, the unequal distribution between rich and poor are indicators for poverty.

$(11)$ High rate of Unemployment:

When there are people with working capacity and willingness to work at existing market wage rate and also searching for the job but do not find work (job), they are said to be unemployed.
On the situation of unemployment the person is not able to satisfy the primary needs of his family so the ratio of poverty increases.
In the first four decade of planning, the economic growth is very low and it resulted in to less development of employment opportunities in comparison to increase in supply of labour is the main reason of increase in unemployment.
In India till $2011$, the rate of unemployment remained around $9%.$
According to labour commission in the year $2013-14$, the rate of unemployment above the age of $15$ years and above is $4.9%.$
In rural areas, this rate was $4.7%$ and in urban areas it was $5.5%.$

$(12)$ Others:

The group of low income people per capita clothes consumption is also low.
The population ratio is high and the size of family is also high.
Just because of poverty the child works in dangerous field like crackers factory.
The low saving rate and dual economy are the indicators of the poverty.

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Question 45 Marks

Discuss causes for rural poverty.

Answer

Causes for rural poverty:
The causes for rural poverty can be divided into two parts.
They are:
$1.$ Natural causes:.

India has been an agricultural country from beginning. Even today majority of the population lives in villages and is dependent on agriculture.
In India, agriculture is mainly dependent on natural factors like rain, weather conditions, etc. Frequent droughts, uncertainty of monsoon and floods result -in low production and less and uncertain income for people involved in agriculture. Hence, nature has become a cause for poverty.

$2.$ Demographic factors:
After independence and during the planning period India’s economy grew rapidly. With this India also made rapid increase in the health services.

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.

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Question 55 Marks

Discuss unequal distribution of income and property as an indicator of poverty.

Answer

Unequal distribution of income and property:

After the economic reforms of $1991,$ economic growth and per capita income have increased sharply in India. But, due to unequal distribution of income, poverty could not be reduced at a large scale.
In India, on one hand we see rich class of people with high standard of living . and enjoying good facilities and on the other hand we find low income people living in slums and deprived of basic necessities like food, education and health.

The table below shows the actual income of the top $1\%$ rich class in $\text{USA, UK}$ and India:
Share of actual national income to top $1\%$ rich class

ountries	Life expectancy $($in years$)\ ($Year $2014)$	Infant Mortality $($Year $2014)$
Norway	$81.6$	$02$
$\text{USA}$	$79.1$	$06$
Sri Lanka	$74.9$	$09$
China	$75.8$	$10$
India	$68.0$	$39$

otal familiesToilet facility within houseHouses without toilet facility $100\%\ 66\%\ 34\%$
$\text{Country Year 1998 Year 2012 USA 15.2 18.9 UK 12.5 12.7 India 9.0 12.6}$
Analysis;

From the table we can see that the real income of top $1\%$ has increased in year $2012$ as compared to the year $1998.$
India’s rich class held $12.6\%$ national income in $2012$ as compared to $9\%$ in $1998.$ This figure is quite high.
For India it can be said that the advantage from economic reforms were more in favour of rich class.
Thus income inequality on a large scale serves as an indicator of poverty.

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Question 65 Marks

How do you compare India with other countries in terms of life expectancy and infant mortality?

Answer

Life expectancy and infant mortality:
$(A)$ Life expectancy:

The average expected life span of a new born baby is called the life expectancy.
The average life expectancy of people in a country is based on nutritive food, cleanliness, pure drinking water and health services. Poor people are deprived of such facilities and so they have low life expectancy.

$(B)$ Infant mortality:

The number of deaths per thousand new born before reaching the age of one year is called the infant mortality.
The rate of infant mortality depends on availability of health services, mother’s education, vaccination among children and nutrition of food.
Life expectancy and infant mortality is also an indicator of poverty with respect to poor health services

Life expectancy and infant mortality of various countries of the world are shown as below:
Life Expectancy and Infant mortality

ountries	Life expectancy $($in years$)\ ($Year $2014)$	Infant Mortality $($Year $2014)$
Norway	$81.6$	$02$
$\text{USA}$	$79.1$	$06$
Sri Lanka	$74.9$	$09$
China	$75.8$	$10$
India	$68.0$	$39$

Analysis: We can see that life expectancy of developed countries is quite high as compared to India whose life expectancy is just $68$ years. This is even lesser than China and Sri Lanka. Similarly, in India $39$ infants die before they turn one year old. This is very high as compared to developed countries. Thus, life expectancy and infant mortality are strong indicators of poverty.

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Question 75 Marks

Write a short note on level of malnutrition as an indicator of poverty.

Answer

Level of malnutrition:

The condition in which the food taken by individuals lack proper nutrition i.e. the food lacks sufficient calories, protein, carbohydrate, vitamin and minerals is called malnutrition.
India’s per capita income is low and there exists a wide spread income disparity. Hence, in spite of rise in agricultural production people with low income are unable to get nutritive food i.e. they suffer from malnutrition.

The table below shows percentage of malnutrition among Indian population:
Measurement of Malnourished People $($in percentage$)$

Percentage of population below poverty line	States
Below $10\%$	Goa, Kerala, Himachal Pradesh, Sikkim, Punjab, Andhra Pradesh
$10$ to $20\%$	Jammu and Kashmir, Haryana, Tamil Nadu, Gujarat, Rajasthan, Maharashtra, Tripura, Nagaland, Meghalaya
$20$ to $30\%$	West Bengal, Mizoram, Karnataka, Uttar Pradesh
$30$ to $40\%$	Madhya Pradesh, Assam, Odisha, Bihar, Arunachal Pradesh, Manipur, Jharkhand, Chhattisgarh.

GroupIncome group $($In $₹)$ Group $10-30,000$ Group $230,000-1$ lakh Group $31$ lakh$-3$ Iakh Group $43$ lakh$-10$ Iakh Group $510$ lakh and above
Absolute poverty
Relative poverty
$1.$ The condition in which people are unable to earn the minimum amount of income to do expenditure that is needed to satisfy the basic needs of human beings is known as absolute poverty.
$1.$ The condition in which people are unable to earn the minimum amount of income needed in order to maintain the average standard of living in the society in which they live is called relative poverty.
$2.$ The concept of absolute poverty focuses on the minimum consumption expenditure required for satisfying minimum needs.
$2.$ The concept of relative poverty focuses on income inequality existing in different groups of people living in society.
$3.$ Unlike relative poverty, the population need not be divided in different groups to study absolute poverty.
$3.$ To assess relative poverty, the society is divided in different income groups to study the unequal distribution of income.
CountriesYear $2014\ ($Based on fixed price of $2005$ in $\text{US \$)}$ $\text{ US 31,469 UK 25,828 Japan 22,149 Pakistan 603 China 1,420 India 725}$
YearTotal malnourished people $\text{(in percentage)1990-92 23.7, 2000-02 17.5, 2005-07 20.5, 2010-12 15.6, 2014-16 15.2}$
Source: Economic Survey, $2015-16$ According to above table in the time span of $1990-92$ India had total $23.7\%$ of malnourished people. Over years this has reduced to $15.2\%$ but still this is a very large number. According to the report of $2015$ of $\text{FAO}$ on world food safety, India ranks $2nd$ in terms of malnourishment at world level. Thus, malnutrition is a strong indicator of poverty.

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Question 85 Marks

Explain the concept of relative poverty in detail.

Answer

Relative poverty:

The condition in which people lack the minimum amount of income needed in order to maintain the average standard of living in the society in which they live is called relative poverty.
Note that the concept of absolute poverty focuses on the minimum consumption expenditure required for satisfying minimum needs whereas the concept of relative poverty focuses on income inequality existing in different groups of people living in society.
Income disparity exists in all economies. Those who earn less are considered relatively poor than those who earn more.
To assess relative poverty, the society is divided in different income groups to study unequal distribution of income. Thus, relative poverty exhibits the level of income inequality among different class of people i.e. different groups. The concept of Relative poverty can be studied with the help of hypothetical example. For example, suppose our country’s population is $125$ crores and we divide this population into five groups based on their income as shown in the table.

Division of population in five groups

Percentage of population below poverty line	States
Below $10\%$	Goa, Kerala, Himachal Pradesh, Sikkim, Punjab, Andhra Pradesh
$10$ to $20\%$	Jammu and Kashmir, Haryana, Tamil Nadu, Gujarat, Rajasthan, Maharashtra, Tripura, Nagaland, Meghalaya
$20$ to $30\%$	West Bengal, Mizoram, Karnataka, Uttar Pradesh
$30$ to $40\%$	Madhya Pradesh, Assam, Odisha, Bihar, Arunachal Pradesh, Manipur, Jharkhand, Chhattisgarh.

GroupIncome group $($In $₹)$ Group $10-30,000$ Group $230,000-1$ lakh Group $31$ lakh$-3$ Iakh Group $43$ lakh$-10$ Iakh Group $510$ lakh and above
Analysis:
We can see in the above table that the class in group $2,$ has more income then the class income of people in group
$1.$ Hence, it can be said that people in group $1$ are relatively poor than group
$2.$ The people of group $2$ have lower income than income of people in group $3, 4$ and $5.$ Hence people of group $2$ are relatively poor than $3, 4$ and
$5.$ Lorenz curve and Gini co-efficient are used to measure relative poverty or income inequality.
Relative poverty is different from absolute poverty because in absolute poverty we only take the consumption expenses behind minimum basic needs as criteria to decide poverty line but in relative poverty we compare one group of society with another group based on their incomes.

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Question 95 Marks

What is the meaning of absolute poverty? How poverty line has been decided in India over the period of time?

Answer

Absolute poverty:
The minimum amount of income and expenditure that is needed to satisfy the basic needs of human beings is known as poverty line. People who are below this poverty line are known as absolutely poor and their poverty is called absolute poverty.Method of deciding the poverty line:
To understand the level of absolute poverty or deciding the poverty line, the minimum expenditure to be made by a person to purchase the minimum physical amount of cereal, pulses, milk, butter etc. is studied.
$(A)$ Method of Indian Council of Medical Research:

To ascertain minimum expenditure on all these items, the Indian Council of Medical Research during the initial years of planning calculated a minimum limit of calorie that a person needs to consume daily. Based on the calorie requirement the expenditure for items was then calculated.
The Council calculated that a person belonging to a rural area must consume $2400$ calories per day whereas that of urban, $2100.$
Later, even the Planning Commission accepted this method of ascertaining expenditure. By taking prices of year $1960-61$ as base year, the Commission decided that $₹ 20$ per day be set as minimum value for measurement of poverty or say poverty line. Thus, a person who earned less than $?\ 20$ per day should be considered living below the poverty line or say should be called absolutely poor. Later, various people and committees revised the minimum value of poverty line.

$(B)$ Dandekar and Rath Committee:

Dandekar and Rath made the first systematic assessment of poverty in India.
Dandekar and Rath Committee decided minimum value of poverty for rural areas $₹ 15$ and for urban area $₹ 22.50$ taking $1960-61$ as the base price.

$(C)$ Lakadwala Committee:
After that the planning commission appointed an expert committee under the chairmanship of Prof. D.T. Lakadawala. This committee decided a new minimum limit of poverty line for the year $1993$ taking $1973-74$ as base year. They set a poverty line. The new poverty line was set as ? $57$ per day for urban areas and ? $49$ for rural areas. People earning below this be considered living below the poverty line.
Limitation of all these methods:

Calculating poverty and deciding poverty line with the methuu based on calorie consumption only, does not give a true picture of poverty. The reason for this is that poverty is an economic situation and its scope is broader than consumption expenditure behind food items.
Hunger is a physical situation whereas poverty is an economic. In this sense, the poverty line defined by these people just becomes a ‘starvation line’.
So, to calculate poverty line, aspects such as nutritive food, education, housing, drinking water, sanitation, etc. that a person receives should also be considered.

$(D)$ Tendulkar Committee Report$-2009:$

To overcome drawbacks of all the previous methods of calculating poverty line a committee under the chairmanship of Mr. Suresh Tendulkar was formed.
It presented its report in $2009$ and gave a new measure of poverty line. The method suggested by this committee incorporated expenses done after health and education were also covered to get a more realistic picture of poverty.
According to the new method, in the year $2011-12,$ the minimum value of poverty line was modified, for urban and rural area.
As per the new method, the minimum per capita daily expenditure needed for rural area was set to be $₹ 27 (Rs. 816$ per month$)$ and that for urban was set to $₹ 33 (Rs. 1000$ per month$).$

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Question 105 Marks

Discuss the measures to reduce poverty in India.

Answer

$1.$ Introduction:

Till $1970$ the indirect steps were to be taken to reduce poverty.
At that time government focused on capital and infrastructure.
But after $1970$ they added education and health facilities in economic development and that importance was accepted.
In $\text{W.D.R. 2000-01,}$ suggestions were given to measure job, loan, road, electricity, schools, water, health etc.to reduce poverty.
Also they gave protection to economic ups and downs, natural calamities, illness of poor people.
From $1970$ through planning India has taken below steps to reduce poverty.

$2.$ Measures to Reduce Poverty:
$[1]$ To Increase Agriculture Productivity
$[2]$ Development of Small Scale Industries
$[3]$ Development of Unorganized sector
$[4]$ Use of Appropriate Tax Policy
$[5]$ Rise in Human Capital Investment
$[6]$ Goods and Services at Reasonable Rate
$[7]$ Employment Programmers
$[8]$ Housing Schemes
$[9]$ Social Security Schemes
$[10]$ Jan Dhan Yojana
$(1)$ To Increase Agriculture productivity:

In India, most of population depends on agriculture and they live in village.
The low per capita agriculture Productivity is the main reason of their poverty.
With increase in productivity and income of agriculture a poverty can be reduced.
For that government arranged the public programmes, farmers are informed about upgraded technology, available resources at reasonable rates, improved infrastructural facilities, maximum price and regulated market for their product are given.
Through this development of agriculture will increase productivity per labour.
These programmes reduce poverty through two ways.
$(1)$ Price of food grains decrease.
$(2)$ Employment opportunities increase.
This will be more advantageous to the poor and poverty can be reduced.

$(2)$ Development of Small Scale Industries:

There is a huge contribution of small and cottage industries in gross national income of India.
80 to reduce poverty, the importance Is given to small scale and cottage industry.
If small and cottage industry can be developed and encouraged they can reduce poverty on a large scale. Government has reduced the restriction on small scale industries and taking steps to provide proper market and bank loan at reasonable rate so that it can be developed easily.
Indian Government established $\text{MUDRA (Micro Unit Development & Refinance Ltd.) on 8th April 2015.}$
The main objective of $\text{MUDRA}$ is to provide loan to small scale industries.
Moreover from $2016$ the Government provide loan to new establish business under the concept of startup India.

$(3)$ Development of Unorganized Sector:

The major part of labour and workers are working under unorganised sector.
The ratio of contribution in national production and employment are higher in unorganised sector.
According to one survey in $2005, 86\%$ workers work in these sector.
Unorganised sector includes vegetable vendors, masons in construction sector, agriculture labourers, vendors etc. To improve the condition of these workers, national commission has recommended to dicide working conditions, life insurance, health, old age pension and other social security measures.
Moreover for small and marginal farmers, it is recommended to provide them with irrigation facilities and loan facility to improve income and reduce poverty.
Moreover it was advocated to create national funds for unorganized sector.
Also given importance to self-employment, increasing standard for job and national rural employment guarantee are given.

$(4)$ Use of Appropriate Tax Policy:

To reduce the inequality of income and poverty, government uses tax policy to achieve this objectives, government makes such a policy werein more tax is imposed on rich class which can afford that tax and less tax is imposed on poor class.
This way government collects fund by imposing taxes on rich people.
As a result, socio-economic condition of the poor gets improve and reduction in can be seen in income inequality and poverty.

$(5)$ Rise in Human Capital Investment:

Developed nation have achieved the objective of reduction of poverty and unemployment by investing capital in education, health and skill development considering this during planning.
Policy is made to invest money $($capital$)$ in human development.
To provide technical knowledge and entrepreneurship to village youngsters, the $\text{TRYSEM }$Schemes was established in the year $1979.$
After that, in April $1999$ was merged in $\text{SGSY TRYSEM}$ was merged in $\text{SGSY.}$
For self employment to young generation one new schemes Prime Minister Skill Development scheme was organized under the head of Skill India Movement.

$(6)$ Goods and Services at Reasonable Rate:

The root of poverty is price rise.
The major part of poor family‘s income is spent for primary goods "Food". So to reduce poverty it is necessary to provied food at low price under public distribution system.
In India, we have ration shops where rural and urban poor are given basic utility goods at reasonable prices. Government fixes the price of some product which is necessary to live.
During draught and scarcity, the responsibility of public distribution system is more to satisfy the basic needs of the poor.

$(7)$ Employment Programmes:

To reduce poverty, government has given four programmes which are as under.
$(A)$ Self Employment Scheme
$(B)$ Wage Employment Scheme
$(C)$ Prime Minister Rojgar Yojana
$(D)$ National Rural Employment Guarantee Act, $\text{2005 (NREGA).}$

$(A)$ Self Employment Scheme:

According to the population in India rural poverty is $3$ times more than urban poverty.
$80$ that all policies are focused on to reduce poverty of rural area.
Self-employment is the best way to reduce poverty.
At the beginning in planning it was believed that poverty reduced itself and for that no proper actions were taken for that.
Some steps were indirectly taken which are as follows.
In $\text{1973-74 SFDA (}$Small Farmers Development Agency$)$ for marginal farmers and agriculture labour and in $1974. 75$ under $\text{MFAL (}$Marginal Farmers and Agricultural Labours$)$ programmes were created, $\text{SFDA}$ take care of all types of land holders who are poor.
For solution of unemployment two more schemes were entroduced.
$(i)$ Crash employment programs in $1974-75$ and
$\text{(ii) PIREP (}$Pilot Intensive Rural Employment Programme$).$
But at last all programmes were merged in $\text{IRDP}$ in $1978-79.$

$\text{(I) IRDP (}$Integrated Rural Development Program$): $

On $2nd$ October, $1980,$ through combination $($merged$)$ of all scheme $\text{IRDP}$ was established.
The main objective of $\text{IRDP}$ is to motivate poor family of village for work and improve their standard of living.
In this scheme loan and subsidies are provided for agriculture, animal husbandry, small irrigation and cottage industries.
This way IRDP Programme is known as anti-poverty program. Following programs were included in self-employment programme:
$\text{(a) IRDP (Integrated Rural Development Programme)}$
$\text{(b) TRYSEM (Training of Rural Youth and for Self Employment)}$
$\text{(c) DWCRA (Development of Women and Child in Rural Areas)}$
$\text{(d) MWS (Million Wells Scheme)}$
$\text{(e) SITRA (Supplying Improved Tool Kit to Rural Artisans)}$
$\text{(f) Ganga Welfare Schemes}$

$\text{(II) SGSY (Suvarna Jayanti Gram Svarojagar Yojana):}$

On lst April, 1999 IRDP and other programmes integrated with it were merged and named as SGSY.
The main objectives of this scheme was development of small trade.
Self help groups were also provided infrastructural facilities, technology, loan facility and market for final goods to rural poor.
For this scheme, central government has given 75% and state government has given 25% and district village development agency and Taluka Panchayat manage it.

$(B)$ Wage Employment Scheme:

The main objective of these scheme was poverty eradication and has multiple objectives.
This scheme focused on those poor who do not have any other source of income than physical labour.
These schemes do not only provide self employment in the slack season but also provide employment during floods, draught, scarcity and other natural calamities.
They also provide infrastructure service in rural areas.
Wage employment schemes included.
$(I)$ Jawahar Rojgar Yojana $(IRY):$
For creating employment in rural area on $28th$ April $1989.$
central government introduced Jawahar Rojgar Yojana.
Wage employment schemes like rural landless employment guaranttee programmes were merged in $IRY.$
In April $1999\ IRY$ was replaced and merged in $JGSY ($Jawahar Gram Samridhi Yojana$)$
The main objective of this scheme was to provide employment and establish infrastructural facility in the village.
In this scheme schedule tribes labour and handicapped were given employment.
Two main benefits of these schemes were
$(i)$ Infrastructure Improved
$(ii)$ Employment given to the village poor.

$(ii)$ Employment Assistance Scheme $\text{(EAS):}$

$\text{JRY}$ can not solves the problem of employment in remote and backward areas.
So to improve employment $\text{EAS}$ was establish on $2nd$ October, $1993.$
In this scheme if minimum $20$ people get ready to do then development factor officer starts programmes.

$(C)$ Prime Minister Rojgar Yojana $\text{(PMRY):}$

In the decade of $90's$ employment generation in organised sector was stagnant and in public sector, negative growth was noticed.
On the other hand unemployment rate was rising fast.
On this situation $\text{PMRY}$ was started for self employment with the objective of starting ventures to provide employment to educated unemployed.

$(D)$ National Rural Employment Guarantee Act, $\text{2005 (NREGA):}$

In the year $2005,$ National Employment Guarantee Act was accepted with the objective of creating assets through public construction activities and to provide employment to one person per family for minimum $100$ days to rural and urban poor as well as lower middle class families.
According to this scheme within $5\ KM.$
employment given under $15$ days.
If employment is not provided than unemployment allowances will be given.
This laboures will get employment in public welfare scheme.
There were two reasons behind that
$(a)$ seasonal unemployment reduces
$(b)$ road, irrigation and water allocation facility were increased.
In $\text{2009, NREGA}$ was reformed as Mahatma Gandhi National Rural Employment Guarantee Act $\text{(MGNREGA).}$

$(8)$ Housing schemes:

In India, still a majority of poor people dwell in semi-stable or temporary houses.
To provide dwelling to poor in the year $1985-86,$ Indira Awas Yojana was started for families below poverty line and schedule caste or schedule tribes.
In $2013-14,$ Rajiv Gandhi Yojana was implemented to improve housing of those who reside in huts.
In $25$ June, $2015$ Prime Minister Awas Yojana started to solve the problem of fast increasing problem of dwelling in urban areas. Housing schemes provided two benefits.
$(i)$ Poor people get the house
$(ii)$ Poor people get employment

$(9)$ Social Security Schemes:

As a strategy to reduce poverty in India, various social security schemes were started.
Kisan credit card, low rate food grains, poor elder people get Annapurna Scheme, Janshri Insurance Scheme and education scheme were given to poor or below poverty line people.
For workers of unorganised sector, from $9th$ May $2015,$ Atal Pension Schemes were started in which monthly pension is paid to people above $60$ years.
Under $\text{PMSS (Prime Minister Security Scheme)}$ for people in age group between $18$ to $70$ years are given accident insurance of $2$ Lac with minimum premium of ` $12$ and jivan jyoti Scheme was started with $2$ Laos life insurance policy at ` $330$ yearly premium.
These schemes are very useful to the poor families at a time of accidential death.
At the time of crop failure, to safeguard farmers, Prime Minister Fasal Bima Yojana was started $\text{(PMFBY).}$
In this, farmer gets insurance of Kharif crops at $2\%$ premium and Ravi crops $1.5\%$ premium.

$(10)$ Jan Dhan Yojana:

Through financial inclusion, to hit the root of poverty, an ambitious scheme Prime Minister Jan Dhan Yojana was introduced.
This scheme began on $28th$ August $2014$ and on the very first day of this scheme $1.5$ crore accounts were opened.
Till $8th$ January $2015$ the number increased to $12.58$ crores where investment of f $10,950$ crore was generated.

$(a)$ Objective:

$(i)$ To increase per capita banking service.
$(ii)$ To reduce regional inequalities
$(iii)$ The main purpose was to provide government help directly in their bank accounts.

$(b)$ Features and importance:

$(i)$ The main feature of this scheme is that the bank account is opened with zero balance.
$(ii)$ After $5$ months of opening account, an overdraft of $₹.5000$ is available.
$(iii)$ Those who opened account before $26$ January, also benefited with a life insurance policy.
$(iv)$ Prime minister Ian Dhan Yojana hits directly on poverty by providing micro finance and banking facilities.

$(11)$ Other steps:

Other stratergies like high economic development, population control and the structural changes are implemented.

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Question 115 Marks

Explain the steps to be taken to reduce poverty in India during planning period.

Answer

$1.$ Introduction:

Till $1970$ the indirect steps were to be taken to reduce poverty.
At that time government focused on capital and infrastructure.
But after $1970$ they added education and health facilities in economic development and that importance was accepted.
In $W.D.R. 2000-01,$ suggestions were given to measure job, loan, road, electricity, schools, water, health etc.to reduce poverty.
Also they gave protection to economic ups and downs, natural calamities, illness of poor people.
From $1970$ through planning India has taken below steps to reduce poverty.

In India, most of population depends on agriculture and they live in village.
The low per capita agriculture Productivity is the main reason of their poverty.
With increase in productivity and income of agriculture a poverty can be reduced.
For that government arranged the public programmes, farmers are informed about upgraded technology, available resources at reasonable rates, improved infrastructural facilities, maximum price and regulated market for their product are given.
Through this development of agriculture will increase productivity per labour.
These programmes reduce poverty through two ways.
$(1)$ Price of food grains decrease.
$(2)$ Employment opportunities increase.
This will be more advantageous to the poor and poverty can be reduced.

$(2)$ Development of Small Scale Industries:

There is a huge contribution of small and cottage industries in gross national income of India.
$80$ to reduce poverty, the importance Is given to small scale and cottage industry.
If small and cottage industry can be developed and encouraged they can reduce poverty on a large scale. Government has reduced the restriction on small scale industries and taking steps to provide proper market and bank loan at reasonable rate so that it can be developed easily.
Indian Government established $\text{MUDRA (Micro Unit Development & Refinance Ltd.) on 8th April 2015.}$
The main objective of $\text{MUDRA}$ is to provide loan to small scale industries.
Moreover from $2016$ the Government provide loan to new establish business under the concept of startup India.

$(3)$ Development of Unorganized Sector:

The major part of labour and workers are working under unorganised sector.
The ratio of contribution in national production and employment are higher in unorganised sector.
According to one survey in $2005, 86\%$ workers work in these sector.
Unorganised sector includes vegetable vendors, masons in construction sector, agriculture labourers, vendors etc. To improve the condition of these workers, national commission has recommended to dicide working conditions, life insurance, health, old age pension and other social security measures.
Moreover for small and marginal farmers, it is recommended to provide them with irrigation facilities and loan facility to improve income and reduce poverty.
Moreover it was advocated to create national funds for unorganized sector.
Also given importance to self-employment, increasing standard for job and national rural employment guarantee are given.

$(4)$ Use of Appropriate Tax Policy:

To reduce the inequality of income and poverty, government uses tax policy to achieve this objectives, government makes such a policy werein more tax is imposed on rich class which can afford that tax and less tax is imposed on poor class.
This way government collects fund by imposing taxes on rich people.
As a result, socio-economic condition of the poor gets improve and reduction in can be seen in income inequality and poverty.

$(5)$ Rise in Human Capital Investment:

Developed nation have achieved the objective of reduction of poverty and unemployment by investing capital in education, health and skill development considering this during planning.
Policy is made to invest money $($capital$)$ in human development.
To provide technical knowledge and entrepreneurship to village youngsters, the $\text{TRYSEM}$ Schemes was established in the year $1979.$
After that, in April $1999$ was merged in $\text{SGSY TRYSEM}$ was merged in $\text{SGSY.}$
For self employment to young generation one new schemes Prime Minister Skill Development scheme was organized under the head of Skill India Movement.

$(6)$ Goods and Services at Reasonable Rate:

The root of poverty is price rise.
The major part of poor family‘s income is spent for primary goods "Food". So to reduce poverty it is necessary to provied food at low price under public distribution system.
In India, we have ration shops where rural and urban poor are given basic utility goods at reasonable prices. Government fixes the price of some product which is necessary to live.
During draught and scarcity, the responsibility of public distribution system is more to satisfy the basic needs of the poor.

$(7)$ Employment Programmes:

To reduce poverty, government has given four programmes which are as under.
$(A)$ Self Employment Scheme
$(B)$ Wage Employment Scheme
$(C)$ Prime Minister Rojgar Yojana
$(D)$ National Rural Employment Guarantee Act, $\text{2005 (NREGA).}$

$(A)$ Self Employment Scheme:

According to the population in India rural poverty is $3$ times more than urban poverty.
$80$ that all policies are focused on to reduce poverty of rural area.
Self-employment is the best way to reduce poverty.
At the beginning in planning it was believed that poverty reduced itself and for that no proper actions were taken for that.
Some steps were indirectly taken which are as follows.
In $\text{1973-74 SFDA (}$Small Farmers Development Agency$)$ for marginal farmers and agriculture labour and in $1974. 75$ under $\text{MFAL (}$Marginal Farmers and Agricultural Labours$)$ programmes were created, $\text{SFDA}$ take care of all types of land holders who are poor.
For solution of unemployment two more schemes were entroduced.
$(i)$ Crash employment programs in $1974-75$ and
$\text{(ii) PIREP (Pilot Intensive Rural Employment Programme).}$
But at last all programmes were merged in $\text{IRDP}$ in $1978-79.$

$\text{(I) IRDP (}$Integrated Rural Development Program$): $

On $2nd$ October, $1980,$ through combination $($merged$)$ of all scheme $\text{IRDP}$ was established.
The main objective of $\text{IRDP}$ is to motivate poor family of village for work and improve their standard of living.
In this scheme loan and subsidies are provided for agriculture, animal husbandry, small irrigation and cottage industries.
This way $\text{IRDP}$ Programme is known as anti-poverty program. Following programs were included in self-employment programme:
$\text{(a) IRDP (Integrated Rural Development Programme)}$
$\text{(b) TRYSEM (Training of Rural Youth and for Self Employment)}$
$\text{(c) DWCRA (Development of Women and Child in Rural Areas)}$
$\text{(d) MWS (Million Wells Scheme)}$
$\text{(e) SITRA (Supplying Improved Tool Kit to Rural Artisans)}$
$\text{(f) Ganga Welfare Schemes}$

$(II) \text{SGSY} ($Suvarna Jayanti Gram Svarojagar Yojana$): $

On $\text{1st April, 1999 IRDP}$ and other programmes integrated with it were merged and named as $\text{SGSY.}$
The main objectives of this scheme was development of small trade.
Self help groups were also provided infrastructural facilities, technology, loan facility and market for final goods to rural poor.
For this scheme, central government has given $75\%$ and state government has given $25\%$ and district village development agency and Taluka Panchayat manage it.

$(B)$ Wage Employment Scheme:

The main objective of these scheme was poverty eradication and has multiple objectives.
This scheme focused on those poor who do not have any other source of income than physical labour.
These schemes do not only provide self employment in the slack season but also provide employment during floods, draught, scarcity and other natural calamities.
They also provide infrastructure service in rural areas.
Wage employment schemes included.
$(I)$ Jawahar Rojgar Yojana $(IRY):$
For creating employment in rural area on $28th$ April $1989.$
central government introduced Jawahar Rojgar Yojana.
Wage employment schemes like rural landless employment guaranttee programmes were merged in $IRY.$
In April $\text{1999 IRY}$ was replaced and merged in $\text{JGSY (Jawahar Gram Samridhi Yojana)}$
The main objective of this scheme was to provide employment and establish infrastructural facility in the village.
In this scheme schedule tribes labour and handicapped were given employment.
Two main benefits of these schemes were
$(i)$ Infrastructure Improved
$(ii)$ Employment given to the village poor.

$(ii)$ Employment Assistance Scheme $\text{(EAS):}$

$\text{JRY}$ can not solves the problem of employment in remote and backward areas.
So to improve employment $\text{EAS}$ was establish on $\text{2nd October, 1993.}$
In this scheme if minimum $20$ people get ready to do then development factor officer starts programmes.

$(C)$ Prime Minister Rojgar Yojana$\text{(PMRY):}$

In the decade of $90's$ employment generation in organised sector was stagnant and in public sector, negative growth was noticed.
On the other hand unemployment rate was rising fast.
On this situation $\text{PMRY}$ was started for self employment with the objective of starting ventures to provide employment to educated unemployed.

$(D)$ National Rural Employment Guarantee Act, $\text{2005 (NREGA):}$

In the year $2005,$ National Employment Guarantee Act was accepted with the objective of creating assets through public construction activities and to provide employment to one person per family for minimum 100 days to rural and urban poor as well as lower middle class families.
According to this scheme within $5\ KM.$
employment given under $15$ days.
If employment is not provided than unemployment allowances will be given.
This laboures will get employment in public welfare scheme.
There were two reasons behind that
$(a)$ seasonal unemployment reduces
$(b)$ road, irrigation and water allocation facility were increased.
In $\text{2009, NREGA}$ was reformed as Mahatma Gandhi National Rural Employment Guarantee Act $\text{(MGNREGA).}$

$(8)$ Housing schemes:

In India, still a majority of poor people dwell in semi-stable or temporary houses.
To provide dwelling to poor in the year $1985-86,$ Indira Awas Yojana was started for families below poverty line and schedule caste or schedule tribes.
In $2013-14,$ Rajiv Gandhi Yojana was implemented to improve housing of those who reside in huts.
In $25$ June, $2015$ Prime Minister Awas Yojana started to solve the problem of fast increasing problem of dwelling in urban areas. Housing schemes provided two benefits.
$(i)$ Poor people get the house
$(ii)$ Poor people get employment

$(9)$ Social Security Schemes:

As a strategy to reduce poverty in India, various social security schemes were started.
Kisan credit card, low rate food grains, poor elder people get Annapurna Scheme, Janshri Insurance Scheme and education scheme were given to poor or below poverty line people.
For workers of unorganised sector, from $9th$ May $2015,$ Atal Pension Schemes were started in which monthly pension is paid to people above $60$ years.
Under $\text{PMSS (Prime Minister Security Scheme)}$ for people in age group between $18$ to $70$ years are given accident insurance of $2$ Lac with minimum premium of ` $12$ and jivan jyoti Scheme was started with $2$ Laos life insurance policy at ` $330$ yearly premium.
These schemes are very useful to the poor families at a time of accidential death.
At the time of crop failure, to safeguard farmers, Prime Minister Fasal Bima Yojana was started $\text{(PMFBY).}$
In this, farmer gets insurance of Kharif crops at $2\%$ premium and Ravi crops $1.5\%$ premium.

$(10)$ Jan Dhan Yojana:

Through financial inclusion, to hit the root of poverty, an ambitious scheme Prime Minister Jan Dhan Yojana was introduced.
This scheme began on $28th$ August $2014$ and on the very first day of this scheme $1.5$ crore accounts were opened.
Till $8th$ January $2015$ the number increased to $12.58$ crores where investment of f $10,950$ crore was generated.

$(a)$ Objective:

$(i)$ To increase per capita banking service.
$(ii)$ To reduce regional inequalities
$(iii)$ The main purpose was to provide government help directly in their bank accounts.

$(b)$ Features and importance:

$(i)$ The main feature of this scheme is that the bank account is opened with zero balance.
$(ii)$ After $5$ months of opening account, an overdraft of $₹.5000$ is available.
$(iii)$ Those who opened account before $26$ January, also benefited with a life insurance policy.
$(iv)$ Prime minister Ian Dhan Yojana hits directly on poverty by providing micro finance and banking facilities.

$(11)$ Other steps:

Other stratergies like high economic development, population control and the structural changes are implemented.

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Question 125 Marks

Explain absolute poverty and calculate the absolute poverty in India.

Answer

$1.$ Introduction:

The most important problem of India is poverty.
Some part of the society cannot satisfy their primary needs.
Poverty is a made-man problem.
Poverty is a qualitative concept.
There are two tunes of poverty:
$(1)$ Absolute poverty
$(2)$ Relative poverty.

$2.$ Absolute poverty and poverty line: $(1)$ Absolute Poverty:

Absolute Poverty is called as a pure poverty.
This concept is related to primary needs of person.
Whatever concepts are shown in poverty is ultimately absolute poverty.
The minimum expenditure or income required to satisfy the minimum basic needs and services is known as poverty line.
The population having income or expenditure below the poverty line are said to be absolutely poor.
The other name of this poverty is complete poverty.
The person’s minimum requirement is food, cloth and shelter.
If his income is below that then it is called these absolute poor.
The concept of absolute poverty help us to categorize people living below poverty line and to reduce poverty among these, target oriented policies can be framed.

$(2)$ Poverty Line:

Poverty line is not like a geometry line, but it is low per capita household consumption expenditure.
To understand absolute poverty, the minimum consumption expenditure required to fulfill the minimum physical amount of cereals, pulses, milk, butter etc. should be studied.
To calculate the measurement of poverty line planning commission and most of the economists take calories to consider.
To ascertain this minimum per capita consumption expenditure, in the initial years of planning, Indian council of Medical Research has decided that for rural areas for a person per day $2400$ calories and for urban areas per day $2100$ calories is required.
This method was accepted by planning commission in $1969$ and taking $1960-61$ prices as base year $Rs.20$ per month expenditure was decided as the measuring rod for poverty.
On another side Dandekar and Rath for rural areas, on the basis of $1960-61$ prices decided $Rs.15$ per month expenditure as poverty line and for urban areas is $Rs.22.50$ expenditure per month.
Later on planning commission appointed an expert committee under the chairmanship of Prof. D.T. Lakdawala which estimated poverty for the year $1993,$ taking $1973-74$ prices as base year prices, for rural areas $Rs.49$ per month and for urban areas $Rs.57$ per month consumption expenditure was estimated to fulfill the requirements for the poverty line.
In the method of calculating poverty line, one of the major drawbacks is it only takes calories as a consumption and human development index like education, health are not considered.
Poverty is economic situation when hunger is a physical situation.
So that poverty line becomes "Starvation line".
To understand deeply the concept of poverty, the minimum standard of quality life should be decided and for that required facilities for quality life such as nutritive food.
balanced food, fuel, kitchen fuel, electricity, clothing, housing, education expenditure etc. should be included.
With the help of that we can actually measure the poverty and make perfect strategies to reduce poverty.
In this context, Prof. Suresh Tendulkar redefined the measuring rod of poverty and submitted its report to the Government in the year $2009.$
In this committee they developed a new method of measuring poverty.
They also measured education and health with minimum calorie.
According to new poverty method in the year $2011-12$ per capita monthly consumption expenditure for rural areas $Rs.816$ and urban areas $Rs.1000$ was decided as the poverty line.
At international level they consider the cost of all resources consumed by an average adult.
At international level world bank consider $2005$ as a base year, $ppp ($Purchase Power Parity$)$ decided as $1.25 \$$ per day which was $1\$$ for the year in $1990$ and $1.90\$$ in the year $2015.$
Below this level, people is called as a poor.

$(3)$ Proportion of Absolute Poverty in India:

In India work of estimation of poverty is done by planning commission.
In $60th$ round of $\text{NSSO (}$National Sample Survey Organization$) (2011-12)$ using for joint family expenditure data, Tendulkar committee estimated that in India in the year 2004-05 the measurement are as under:

Poverty	$2004-05(\%)$	$2011-12(\%)$
Rural	$41.8$	$25.7$
Urban	$25.7$	$13.7$
Total	$67.5$	$39.4$

$(a) $Analysis of India:

$(1)$ From $2004-05$ to $2011-12$ Poverty reduced from $37.2\%$ to $21.9\%$ it means $15.3\%$ reduction.
$(2)$ Rural poverty reduce from $41.8$ to $25.7\%$ it means reduction was $16.1\%$
$(3)$ Urban areas poverty reduced from $25.7\%$ to $13.7\%$ in the year $2011-12.$
$(4)$ As compared to rural areas, urban areas poverty reduced less.

$(b)$ Analysis of State:

In India state wise poverty is different. The situation of state wise poverty in $2011-12$ are as under:
$(1)$ In Goa, Kerala, Sikkim, Himachal Pradesh, Punjab and Andhra Pradesh poverty is less than $10\%.$
$(2)$ In Jammu Kashmir, Haryana, Tamilnadu, Gujarat, Rajasthan, Maharashtra, Tripura poverty is between $10$ to $20\%.$
$(3)$ Madhya Pradesh, Assam, Bihar, Orissa, Jharkhand, Chhattisgarh, Arunachal Pradesh have $30$ to $40\%$
$(4)$ According to Annual Report $2013,$ among various states of India, Goa has the lowest poverty $5.09\%$ and highest in Chhattisgarh which is $39.93\%.$

$3.$ Relative Poverty:

The absolute poverty is related to minimum consumption expenditure to satisfy human needs while in relative poverty income inequality existing in different groups of people living in society is considered.
Just because of unequal distribution of income, few part of the society get high income as compared of poor people.
Commonly in every economy, income disparity is seen In that case lower income class is considered relatively poor than the higher income class.
In this system we can easily seprate two classes of people in the country.
To study relative poverty, society is divided into different income groups and unequal distribution of income is studied.
In this system poor income family are poor compared to rich family.
To understand relative poverty, the people of society are divided into different income groups.
Then, how much shares each group gets out of national income indicates how one group is richer or poorer than the others.
Such estimates shows relative poverty from this angle in comparison to the richest country.
The concept of relative poverty can be studied with the help of a hypothetical example.
For E.g. A notion's population is divided on the basis of Live income groups.

Group	Income group $($In $Rs.)$
Group $1$ Group $2$ Group $3$ Group $4$ Group $5$	$0-50,000$ $50,000-1$ lakh $1$ lakh $-2$ lakh $2$ lakh $-10$ lakh $10$ lakh and above

In the above example the class in group $2$ has more income of people then in group $1.$
It can be said that people in group $1$ are relatively poor than group $2.$
But the same way group $2$ is poor than group $3.$
Group $3$ is poor than group $4.$
and group $4$ is poor than group $5.$
It means people of group $1, 2, 3, 4$ are relatively poor than group $5.$
To measure relative poverty, Lorenz Curve and Gini Co-efficient are useful.

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Question 135 Marks

Explain absolute and relative poverty.

Answer

$1.$ Introduction:

The most important problem of India is poverty.
Some part of the society cannot satisfy their primary needs.
Poverty is a made-man problem.
Poverty is a qualitative concept.
There are two tunes of poverty:

$(1)$ Absolute poverty
$(2)$ Relative poverty.

$2.$ Absolute poverty and poverty line$:(1)$ Absolute Poverty:

Absolute Poverty is called as a pure poverty.
This concept is related to primary needs of person.
Whatever concepts are shown in poverty is ultimately absolute poverty.
The minimum expenditure or income required to satisfy the minimum basic needs and services is known as poverty line.
The population having income or expenditure below the poverty line are said to be absolutely poor.
The other name of this poverty is complete poverty.
The person’s minimum requirement is food, cloth and shelter.
If his income is below that then it is called these absolute poor.
The concept of absolute poverty help us to categorize people living below poverty line and to reduce poverty among these, target oriented policies can be framed.

$(2)$ Poverty Line:

Poverty line is not like a geometry line, but it is low per capita household consumption expenditure.
To understand absolute poverty, the minimum consumption expenditure required to fulfill the minimum physical amount of cereals, pulses, milk, butter etc. should be studied.
To calculate the measurement of poverty line planning commission and most of the economists take calories to consider.
To ascertain this minimum per capita consumption expenditure, in the initial years of planning, Indian council of Medical Research has decided that for rural areas for a person per day $2400$ calories and for urban areas per day $2100$ calories is required.
This method was accepted by planning commission in $1969$ and taking $1960-61$ prices as base year $Rs.20$ per month expenditure was decided as the measuring rod for poverty.
On another side Dandekar and Rath for rural areas, on the basis of $1960-61$ prices decided $Rs.15$ per month expenditure as poverty line and for urban areas is $Rs.22.50$ expenditure per month.
Later on planning commission appointed an expert committee under the chairmanship of Prof. D.T. Lakdawala which estimated poverty for the year $1993,$ taking $1973-74$ prices as base year prices, for rural areas $Rs.49$ per month and for urban areas $Rs.57$ per month consumption expenditure was estimated to fulfill the requirements for the poverty line.
In the method of calculating poverty line, one of the major drawbacks is it only takes calories as a consumption and human development index like education, health are n0t considered.
Poverty is economic situation when hunger is a physical situation.
So that poverty line becomes "Starvation line".
To understand deeply the concept of poverty, the minimum standard of quality life should be decided and for that required facilities for quality life such as nutritive food.
balanced food, fuel, kitchen fuel, electricity, clothing, housing, education expenditure etc. should be included.
With the help of that we can actually measure the poverty and make perfect strategies to reduce poverty.
In this context, Prof. Suresh Tendulkar redefined the measuring rod of poverty and submitted its report to the Government in the year $2009.$
In this committee they developed a new method of measuring poverty.
They also measured education and health with minimum calorie.
According to new poverty method in the year $2011-12$ per capita monthly consumption expenditure for rural areas $Rs.816$ and urban areas $Rs.1000$ was decided as the poverty line.
At international level they consider the cost of all resources consumed by an average adult.
At international level world bank consider $2005$ as a base year, $ppp ($Purchase Power Parity$)$ decided as $1.25\$$ per day which was $1 \$$ for the year in $1990$ and $1.90\$$ in the year $2015.$
Below this level, people is called as a poor.

$(3)$ Proportion of Absolute Poverty in India:

In India work of estimation of poverty is done by planning commission.
In $60th$ round of $\text{NSSO (}$National Sample Survey Organization$) (2011-12)$ using for joint family expenditure data, Tendulkar committee estimated that in India in the year $2004-05$ the measurement are as under:

Poverty	$2004-05(\%)$	$2011-12(\%)$
Rural	$41.8$	$25.7$
Urban	$25.7$	$13.7$
Total	$67.5$	$39.4$

$(a)$ Analysis of India:

$(1)$ From $2004-05$ to $2011-12$ Poverty reduced from $37.2\%$ to $21.9\%$ it means $15.3\%$ reduction.
$(2)$ Rural poverty reduce from $41.8$ to $25.7\%$ it means reduction was $16.1\%$
$(3)$ Urban areas poverty reduced from $25.7\%$ to $13.7\%$ in the year $2011-12.$
$(4)$ As compared to rural areas, urban areas poverty reduced less.

$(b)$ Analysis of State:

In India state wise poverty is different. The situation of state wise poverty in $2011-12$ are as under:
$(1)$ In Goa, Kerala, Sikkim, Himachal Pradesh, Punjab and Andhra Pradesh poverty is less than $10\%.$
$(2)$ In Jammu Kashmir, Haryana, Tamilnadu, Gujarat, Rajasthan, Maharashtra, Tripura poverty is between $10$ to $20\%.$
$(3)$ Madhya Pradesh, Assam, Bihar, Orissa, Jharkhand, Chhattisgarh, Arunachal Pradesh have $30$ to $40\%$
$(4)$ According to Annual Report $2013,$ among various states of India, Goa has the lowest poverty $5.09\%$ and highest in Chhattisgarh which is $39.93\%.$

$3.$ Relative Poverty:

The absolute poverty is related to minimum consumption expenditure to satisfy human needs while in relative poverty income inequality existing in different groups of people living in society is considered.
Just because of unequal distribution of income, few part of the society get high income as compared of poor people.
Commonly in every economy, income disparity is seen In that case lower income class is considered relatively poor than the higher income class.
In this system we can easily seprate two classes of people in the country.
To study relative poverty, society is divided into different income groups and unequal distribution of income is studied.
In this system poor income family are poor compared to rich family.
To understand relative poverty, the people of society are divided into different income groups.
Then, how much shares each group gets out of national income indicates how one group is richer or poorer than the others.
Such estimates shows relative poverty from this angle in comparison to the richest country.
The concept of relative poverty can be studied with the help of a hypothetical example.
For E.g. A notion's population is divided on the basis of Live income groups.

Group	Income group $($In $Rs.)$
Group $1$ Group $2$ Group $3$ Group $4$ Group $5$	$0-50,000$ $50,000-1$ lakh $1$ lakh $-\ 2$ lakh $2$ lakh $-\ 10$ lakh $10$ lakh and above

In the above example the class in group $2$ has more income of people then in group $1.$
It can be said that people in group $1$ are relatively poor than group $2.$
But the same way group $2$ is poor than group $3.$
Group $3$ is poor than group $4.$
and group 4 is poor than group $5.$
It means people of group $1, 2, 3, 4$ are relatively poor than group $5.$
To measure relative poverty, Lorenz Curve and Gini Co-efficient are useful.

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Question 145 Marks

Explain Nature of Poverty.

Answer

$1.$ Introduction:

The most important problem of India is poverty.
Some part of the society cannot satisfy their primary needs.
Poverty is a made-man problem.
Poverty is a qualitative concept.
There are two tunes of poverty:

$(1)$ Absolute poverty
$(2)$ Relative poverty.

$2.$ Absolute poverty and poverty line:
$(1)$ Absolute Poverty:

Absolute Poverty is called as a pure poverty.
This concept is related to primary needs of person.
Whatever concepts are shown in poverty is ultimately absolute poverty.
The minimum expenditure or income required to satisfy the minimum basic needs and services is known as poverty line.
The population having income or expenditure below the poverty line are said to be absolutely poor.
The other name of this poverty is complete poverty.
The person’s minimum requirement is food, cloth and shelter.
If his income is below that then it is called these absolute poor.
The concept of absolute poverty help us to categorize people living below poverty line and to reduce poverty among these, target oriented policies can be framed.

$(2)$ Poverty Line:

Poverty line is not like a geometry line, but it is low per capita household consumption expenditure.
To understand absolute poverty, the minimum consumption expenditure required to fulfill the minimum physical amount of cereals, pulses, milk, butter etc. should be studied.
To calculate the measurement of poverty line planning commission and most of the economists take calories to consider.
To ascertain this minimum per capita consumption expenditure, in the initial years of planning, Indian council of Medical Research has decided that for rural areas for a person per day $2400$ calories and for urban areas per day $2100$ calories is required.
This method was accepted by planning commission in $1969$ and taking $1960-61$ prices as base year $Rs.20$ per month expenditure was decided as the measuring rod for poverty.
On another side Dandekar and Rath for rural areas, on the basis of $1960-61$ prices decided $Rs.15$ per month expenditure as poverty line and for urban areas is $Rs.22.50$ expenditure per month.
Later on planning commission appointed an expert committee under the chairmanship of Prof. D.T. Lakdawala which estimated poverty for the year $1993,$ taking $1973-74$ prices as base year prices, for rural areas $Rs.49$ per month and for urban areas $Rs.57$ per month consumption expenditure was estimated to fulfill the requirements for the poverty line.
In the method of calculating poverty line, one of the major drawbacks is it only takes calories as a consumption and human development index like education, health are n0t considered.
Poverty is economic situation when hunger is a physical situation.
So that poverty line becomes "Starvation line".
To understand deeply the concept of poverty, the minimum standard of quality life should be decided and for that required facilities for quality life such as nutritive food.
balanced food, fuel, kitchen fuel, electricity, clothing, housing, education expenditure etc. should be included.
With the help of that we can actually measure the poverty and make perfect strategies to reduce poverty.
In this context, Prof. Suresh Tendulkar redefined the measuring rod of poverty and submitted its report to the Government in the year $2009.$
In this committee they developed a new method of measuring poverty.
They also measured education and health with minimum calorie.
According to new poverty method in the year $2011-12$ per capita monthly consumption expenditure for rural areas $Rs.816$ and urban areas $Rs.1000$ was decided as the poverty line.
At international level they consider the cost of all resources consumed by an average adult.
At international level world bank consider $2005$ as a base year, $ppp ($Purchase Power Parity$)$ decided as $1.25 \$$ per day which was $1 \$$ for the year in $1990$ and $1.90\$$ in the year $2015.$
Below this level, people is called as a poor.

$(3)$ Proportion of Absolute Poverty in India:

In India work of estimation of poverty is done by planning commission.
In $60th$ round of $\text{NSSO (National Sample Survey Organization) (2011-12)}$ using for joint family expenditure data, Tendulkar committee estimated that in India in the year $2004-05$ the measurement are as under:

Poverty	$2004-05(\%)$	$2011-12(\%)$
Rural	$41.8$	$25.7$
Urban	$25.7$	$13.7$
Total	$67.5$	$39.4$

$(a)$ Analysis of India:

$(1)$ From $2004-05$ to $2011-12$ Poverty reduced from $37.2\%$ to $21.9\%$ it means $15.3\%$ reduction.
$(2)$ Rural poverty reduce from $41.8$ to $25.7\%$ it means reduction was $16.1\%$
$(3)$ Urban areas poverty reduced from $25.7\%$ to $13.7\%$ in the year $2011-12.$
$(4)$ As compared to rural areas, urban areas poverty reduced less.

$(b)$ Analysis of State:

In India state wise poverty is different. The situation of state wise poverty in $2011-12$ are as under:
$(1)$ In Goa, Kerala, Sikkim, Himachal Pradesh, Punjab and Andhra Pradesh poverty is less than $10\%.$
$(2)$ In Jammu Kashmir, Haryana, Tamilnadu, Gujarat, Rajasthan, Maharashtra, Tripura poverty is between $10$ to $20\%.$
$(3)$ Madhya Pradesh, Assam, Bihar, Orissa, Jharkhand, Chhattisgarh, Arunachal Pradesh have $30$ to $40\%$
$(4)$ According to Annual Report $2013,$ among various states of India, Goa has the lowest poverty $5.09\%$ and highest in Chhattisgarh which is $39.93\%.$

$3.$ Relative Poverty:

The absolute poverty is related to minimum consumption expenditure to satisfy human needs while in relative poverty income inequality existing in different groups of people living in society is considered.
Just because of unequal distribution of income, few part of the society get high income as compared of poor people.
Commonly in every economy, income disparity is seen In that case lower income class is considered relatively poor than the higher income class.
In this system we can easily seprate two classes of people in the country.
To study relative poverty, society is divided into different income groups and unequal distribution of income is studied.
In this system poor income family are poor compared to rich family.
To understand relative poverty, the people of society are divided into different income groups.
Then, how much shares each group gets out of national income indicates how one group is richer or poorer than the others.
Such estimates shows relative poverty from this angle in comparison to the richest country.
The concept of relative poverty can be studied with the help of a hypothetical example.
For E.g. A notion's population is divided on the basis of Live income groups.

Group	Income group $($In $Rs.)$
Group $1$ Group $2$ Group $3$ Group $4$ Group $5$	$0-50,000$ $50,000-1$ lakh $1$ lakh $-\ 2$ lakh $2$ lakh $-\ 10$ lakh $10$ lakh and above

In the above example the class in group $2$ has more income of people then in group $1.$
It can be said that people in group $1$ are relatively poor than group $2.$
But the same way group $2$ is poor than group $3.$
Group $3$ is poor than group $4.$
and group $4$ is poor than group $5.$
It means people of group $1, 2, 3, 4$ are relatively poor than group $5.$
To measure relative poverty, Lorenz Curve and Gini Co-efficient are useful.

View full question & answer→

Question 155 Marks

Discuss causes of poverty. Explain the reasons of poverty.

Answer

$1.$ Introduction:

To solve any problem it is necessary to know the causes of that and then find solutions.
In India planning commission has given more focus on development and very less focus on poverty.
From fifth five years commission Government focused on poverty but still today the problem is unsolved.
So that it is necessary to know the causes of poverty we can divide it into five types.

$2.$ Causes of Poverty:
$(1)$ Historical Reasons:

Historians says that in the $17th$ century, India was comparatively more Urbanised and commercialised nation.
The village people were decentralised.
India was business house of the world and India had major share in exports of cotton textile.
India also exported silk, spices, paddy.
India was one of the most Industrialised nation in the world.
But after entry of English, French and Dutch people and due to their policy of colonial exploitation, India's agriculture and industrial situation deteriorated and then after British rule finished all business and started reduction of export.
One of the major factor was agriculture sector.
As we know that Indian agriculture depends on monsoon.
Britishers did not show any interest in investing money in irrigation projects.
On other hands due to repeated draught, zamindari system and tenancy system, the farmer's economic conditions deteriorated and they were under the pressure of debt and interest of loan given to them by zamindars, money lenders and big businessmen.
Cultivators started losing land.
The farmers and agriculture suffered, and so poverty increased.
During british rule they followed trade policy, tax policy and industrial policy which Would benefit them by trading in India.
Indian exports were prohibited in European countries.
In the same way England was given freedom to sell their goods in Indian markets.
To supply these goods to each and every corner of India, Indian railway was extensively used.
In this system, Indian business and trade started losing their competitive power and production power.
Due to this and of policy from Britishers gained surplus production and sale in India which they invested in speedy development of industrialisation in Britain.
Small and cottage industries were mined in India. As a result poverty and unemployment started increasing.

$(2)$ Causes of Rural poverty:
$(I)$ Natural Causes:

India is an agricultural country.
Today also a major portion of population lives in villages and is dependent on agriculture.
Agriculture mostly depends on rain, land and weather conditions.
But due to draught, floods and uncertainty of monsoon, resulted in low production and low income and that is why someone say's that 'Indian farmer born in debt, lived in debt and died in debt.
It means they are not able to come outside from the vicious circle of poverty.

$(II)$ Demographic Factors:

The major part of Indian population lived in village.
During planning period due to economic development and rapid improvement of health service, death rate declined fast but at the same time birth rate did not reduce.
So the situation of population explosion arised and high growth rate was noticed.
High increase in population did not allow per capita income to increase so that the standard of living reduced of their family.
Increasing population increased the ratio in agriculture, on the other sided business disguised unemployment increased.
In the same manner the wage rate also reduced of labor. So poverty increased.
In village the poor families are more than rich families.

$(3)$ Economic factors:
$(1)$ Low Agricultural Productivity per labour:

Agricultural is the main profession in India.
Other even though per labourer agriculture productivity is low.
The reason behind that are poor irrigation facilities, insufficient technology, lack of education and training, low rate of investment, heavy load of population result in low agricultural productivity and so farmers' income remains low and poverty increases.

$(2)$ Unequal distribution of Land and Property:

Since British period in India, zamindari system has done unequal distribution of land.
As we know land is very important for cultivation.
Most of the land has limited landlords and they have no interest to invest in agriculture.
On other hand the tenants were working but they were not the owners, so they also were not interested in investment.
So in agriculture sector production and productivity both are low, which increase poverty.
Government scheme benefits are mostly taken by big farmers not by small farmers.
Due to low agricultural development poverty increased day by day.

$(3)$ Minimal Development of small and cottage industry:

One of the important reasons of poverty was the limitation of economic strategy in planning commission.
In the second five year plan importance was given only to big and heavy industry and not to small and basic industry.
The situation in village was that, small and cottage industries which have great contribution in employment.
Production and income was neglected.
Moreover agriculture and allied activities like animal husbandry, dairy, farming, fisheries etc. were growing slowly and this increased seasonal unemployment.
As a result poverty remained high.

$(4)$ Rapid increase in Prices:

Main reason affecting poverty is price rise.
The different reasons of price rise was, draught, low national production, rapid increase in demand, increase in production cost, price of goods and services as well as edible goods rise rapidly and because of that the purchasing power of low income generating family was reduced.
It decrease the standard of living which increased the poverty.
In India per capita income increased as a slow rate and on another side the problem of inflation was so high.
And just because of inflation the situation of poverty increased.
The salary of private class and fix income person is too low as compared to price rise in the market.
From the last few years, the basic commodities like milk, cereals, pulses and vegetables price also increase the poverty and on the other hand increasing price benefits the businessman, traders and big farmers.
This increases unequal distribution of income in the society.

$(5)$ High rate of Unemployment:

The major part of Indian population depend on agriculture sector but due to less irrigation facilities it depends on monsoon, hence only one crop in a year is cultivated, so there exists seasonal unemployment.
High increase in population and joint family system increases the burden on agriculture and that result in disguised unemployment.
In India, mostly in rural area there is lack of development of allied service and industry.
For high illiteracy, low mobility of labour and high rate of unemployment increases the poverty of India.

$(4)$ Social Reason:
$(a)$ Low level of Education:

Poverty is directly related with education. In India there is scarcity of education, training and skills.
Low level of education specially in rural areas, prevent them from gaining the use of new technologies in agriculture, new agriculture system, research and benefit of market for sale of the product.
As a result, per hectare productivity and per labour productivity in agriculture remains low.
This is the reason of low income of farmers.
In village there is no other source of income and for that they accept the low salary job in farming, wage level remains low and thats why poverty increases.
That is why Amartya Sen has given more weightage to primary education.

$(b)$ Gender Inequality:

In Indian society gender inequality is from the beginning.
Men are given more importance than females.
Society is careless about health of females.
As a result women face higher level of malnourishment, low weight and weakness.
This causes high maternal mortality during child birth and health problem among new born children.
Social thinking about the work allocation is believed that a women should be doing work at only home.
The overall result behind that low level of education of women is this belief.
Low education means low salary and as a result poverty increases.
Apart from this, at work place females are paid less than males.
The part of female population is less than $50\%$ of all over population.
Amongst them, low health level and less opportunities to work in economic field keeps family income low and this increases the level of poverty.

$(C)$ Backward class system:

From beginning in India's major parts are narrow minded and rigid.
Just because of that Harijan and Adivasi are deprived from good job opportunities.
As a result, they convert into drugs and bear addiction.
Same way the land labour of unorganised sector also get low salary.

$5.$ Other Reasons:
$(a)$ War:

After independence, India fought two wars with neighbouring countries.
Our main enemies are China and Pakistan.
During war the limited resources of country spent on production and import of arms and ammunition.
This reduced production of basic goods and services.
The time duration of war is not fixed.
As a result, people store more food grains, clothes, fuel etc.
As a effect of that the price increases of that product.
Because of war, the process of economic development slows down.
The Government also Convent development budget into defence budget, it means that development expenditure is reduced.
Economic development remains low as a result poverty increases.

$(b)$ Increase in defense expenditure:

For India just because of Pakistan and China issue 0f security is very serious.
In present era, to fight against terrorism, a lot of expenditure on security systems has increased.
Expenses on modern missiles, fighter planes, tanks and sub marines have increase rapidly.
The expenses on defense are more than war.
This was a non-developing expenditure.
As a result the more expenses on defense sector reduce the economic development.
As economic development slows down the level of poverty increases.

$(c)$ Defective Policies:

In India, during planning, policies implemented to remove the poverty and for rapid economic development is failed.
From 2nd five year plan onwards, the more priority was given to establishment of big and heavy industries established to remove unemployment and poverty.
But the picture of Indian economy was different.
The major population depends on agriculture sector.
Due to the commercialization of farming and small scale industry the per hector production started reducing, or it does not increase as per population which increase the poverty.
Due to ignorance of agriculture sector the salary or wages level are low as compared to other sectors.
Apart from this various schemes were introduced during planning period to reduce poverty and unemployment but due to frequent change in ruling government, many times, they lacked continuity and co-ordination.
The economic development ratio increased.
After economic reforms the employment opportunity were not increased that much.
In planning they focus more on economic development as compared to social development.
As a result the targeted poverty reduction could not be achieved through these schemes.

$(d)$ Black Money:

The increase in black money is responsible for poverty.
The one who has black money can spent more money to get luxurious product and because of that poor people get less resources.
Government don't have enough budget to satisfy social responsibility of poor people and the benefits are only taken by limited organized sector employees.

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Question 165 Marks

Explain Economic factors responsible for poverty in India.

Answer

1. Low Agricultural Productivity: Lack of technology and small landholdings keep farmers poor.
2. Unequal Distribution of Land and Property: Most land is concentrated with a few, leaving many landless.
3. Minimal Development of Small and Cottage Industries: Slow growth in this sector limits job opportunities.
4. Rapid Increase in Prices: Inflation reduces the purchasing power of the poor.
5. High Rate of Unemployment: Lack of steady income is a primary cause of poverty.

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Question 175 Marks

Discuss indicators of poverty.

Answer

1. Low Per Capita Household Consumption Expenditure: Reflects poor purchasing power.
2. Level of Malnutrition: Inability to get minimum required calories.
3. Life Expectancy and Infant Mortality Rate: Poor health facilities leading to shorter life and higher child deaths.
4. Lack of Medical Facilities: Limited access to doctors and hospitals.
5. Drinking Water and Sanitation: Lack of safe drinking water and toilet facilities.

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