BYJU'S i) BYJU'S EXAM PREP The Most Comprehensive Preparation App For All Exams.BYJU'SBYJU'S EXAM PREP. Poverty & Unemployment Part 1: CONCEPT REVISION & PRACTICE What do you mean by Poverty? * Condition in which a person or community lacks the financial resources and essentials for a minimum standard of living. * The income level under poverty condition from employment is so low that basic human needs can't be met. * Wol Bank describes Poverty as a state of deprivation in |-being and comprises many dimensions: */Low incomesBYJU'S EXAM PREP * Inability to acquire the basic goods and services necessary for survival with dignity Low levels of health and education Poor access to clean water and sanitation Inadequate physical security Lack of voice Insufficient capacity and opportunity to better one's lifeBYJU'S EXAM PREP. Types of Poverty solute Poverty: Condition where household income is below a necessary level to maintain basic living standards (food, shelter, housing). * It was introduced in 1990.BYJU'S EXAM PREP. Rélative Poverty: It is a social perspective feature of poverty in which living & standard compared to the economic standards of we population living in surroundings. i * [tis a measure of income inequality. Ques * It is generally measured as the percentage of the ay A population with income less than some fixed proportion we of median income.BYJU'S EXAM PREP. ent like environmental disaster, job loss and ealth problem. Generational Poverty: * It is a term applied to families who have experienced poverty for at least two generations. It can affect every aspect of a person’s life: physical, social, emotional, and mental.5. Bural Poverty: occurs in rural areas with a population below 50,000 Ah yaa 44 overty: curs in metropolitan areas with a population over yo00. These are some major challenges faced by Urban » Limited access to health and education © Inadequate housing and services. © Violent and unhealthy environment because of overcrowding. © Little or no social protection mechanism.BYJU'S EXAM PREP. What is the Poverty Line? inimum level of income considered adequate in a particular country. Or * Minimum expenditure required to purchase a basket of goods and services necessary to satisfy basic human needs. Note: If income or consumption falls below a given minimum level, then the household is said to be Below the Poverty Line (BPL).BYJU'S EXAM PREP. ine Calculation India, poverty estimation is now carried out by NITI Aayog’s task force. It is done through calculation of the poverty line based on the data captured by the National Sample Survey Office (NSSO) under the Ministry of Statistics and Programme Implementation (MOSP!). Consumption Versus Income Level * Poverty line is based on the consumption expenditure and not on income levels due to: © Income variation © Additional Income © Collection of DataBYJU'S EXAM PREP. Measurement of Poverty Line » . Absolute Measurement of Poverty Absolute measurement of poverty is set using monetary value of the basket of essential products (basic needs) Household whose income is less than the set value will be classified as poor. It is used by World Bank and developing countries like India It relies on a poverty line which remains constant across geographies and over a period. Limitations: It overlooks deprivation within countries or the higher cost of living in developed countries.BYJU'S EXAM PREP. v . Relative Measurement of Poverty It is used mainly by developed countries. It considers a certain percentage of the economically bottom population below the poverty line. * Limitation: It ignores the importance of absolute standard of living and assumes that relative income is all that matters.ote Collection Methods for Poverty Estimation Resource Period (une) lixed Reference Period (MRP) * From 1999-2000 onwards, NSSO switched to MRP method * It measures consumption of: © five low-frequency items (clothing, footwear, durables, education, and health expenditure) over previous year © Allother items over the previous 30 days.BYJU'S EXAM PREP. imation Before Independence adabhai Naoroji He initiated the earliest estimation of poverty line in India * His book was titled “Poverty and Unbritish Rule in India”. He estimates %16 to %35 per capita per_year as the " w} fo ee _Per capil per poverty line. His poverty line was based on cost of subsistence or minimum basic diet.BYJU'S EXAM PREP. al Planning Committee (1938) It places a poverty line ranging 815 to %20 per capita per month. It was set up by Subhash Chandra Bose under the chairmanship of Jawaharlal Nehru It was also based on minimum standard of living, where nutritional requirements were implicit. Aim: Drawing up an economic plan to ensure an adequate standard of living for masses.BYJU'S EXAM PREP. 3. Bombay Plan (1944) .) * Signatories of the plan: J. R. D. Tata, GD Birla, Ardeshir & Dalal, Lala Shri Ram, Kasturbhai Lalbhai, etc. * Its proponent had suggested a poverty line of %75 capita per year. It was a set of proposals for the independence economy 0 S wh é, elopmer ‘the post-BYJU'S EXAM PREP. Estimation Committee After Independence lanning Commission Expert Group (1962) * It has been constituted by Planning Commission. * It formated separate poverty lines for rural and urban areas%20 and %25 per capita per year. M Dandekar and N Rath (1971) They made first system natic—assessMment—o poverty in India é * Itwas based on Ni ional Sample Survey (NSS) data.BYJU'S EXAM PREP. Alagh mittee (1979 CS orcé— constituted by Planning Commission under chairmanship of YK Alagh €) _ /calorie consumption. g It suggested to dfgcontinue poverty estimates based on National Accounts Statistics.BYJU'S EXAM PREP. a . Tendulkar Committee (2009) Chaired by: Suresh Tendulkar Aim: to review methodology for poverty estimation and to address following shortcomings: © Obsolete Consumption Pattern © Inflation Adjustment © Health and Education Expenditure * Committee's Recommendations: © Shift from Calorie Consumption based Poverty Estimation © New poverty lines for rural and urban areas of each state ecrorUniform poverty line basket: per capita per month in rural areas 3578.80 per capita per month in urban areasBYJU'S EXAM PREP. Rangarajan Committee Set up in 2012. Based on an independent large survey of households by Center for Monitoring Indian Economy ‘As per the committee, Poverty line should be based on: © Ideal and desirable level of nutrition required. © What people use or consume as per their general behavior. Expenditure: Persons spending below %47/day in cities and %32 in villages be considered poor. Instead of MRP, it recommended Modified Mixed Reference Period (mpp). Limitations: This committee missed the opportunity to go beyond expenditure-based poverty rates and examine the possibility of a wider multi-dimensional view of deprivation.BYJU'S EXAM PREP. 1. Which of the following statements are correct about the Absolute poverty? ets a widely used measure to ascertain poverty rates inBYJU'S EXAM PREP. Ans. E Sol. Absolute poverty is also known as extreme poverty or abject poverty elt involves the scarcity of basic food, clean water, health, shelter, education and information. elt is usually uncommon in developed countries. elt was first introduced in 1990.BYJU'S EXAM PREP. B. It is widely used in wealthy de is a social perspective feature of poverty in which g standard compares to the economic standards of the population living in surroundings. D, S cBYJU'S EXAM PREP. Ans. E Sol. eRelative poverty is not considered when measuring relative poverty as a person will still be considered poor despite meeting his/her basic needs. elt is a measure of income inequality elt is measured as the percentage of the population with income less than some fixed proportion of median income elt is a widely used in wealthy developed nations.BYJU'S EXAM PREP. 3. Urban poverty is a form of poverty quite visible in mega cities characterized with substandard living conditions and income What are the major challenges that are faced by urban poor? A. Limited access to health and education B. Inadequate housing and services. C. Little gr no social protection mechanism D. dB (Band CBYJU'S EXAM PREP. Ans. E Sol. Major challenges faced by Urban Poor: o Limited access to health and education © Inadequate housing and services. © Violent and unhealthy environment because of overcrowding. © Little or no social protection mechanism.BYJU'S EXAM PREP. ‘Absolute measurement of poverty C. Situational measurement of poverty D. Basic measurement of poverty E. None of the aboveBYJU'S EXAM PREP. Ans. B Sol. Absolute measurement of poverty is set using monetary value of the basket of essential products (basic needs) Here, household whose income is less than the set value will be classified as poor.BYJU'S EXAM PREP. 5. National Planning Committee (1938) estimated irreducible minimum income at pre-war prices to be A. %5to 15 per capita per month ‘15 to %25 per capita per month. C. 25 to $35 per capita per month. D. %35 to %45 per capita per month. E. 345 to 55 per capita per month.BYJU'S EXAM PREP. Ans. B Sol. National Planning Committee (1938) estimated poverty line $15 to $25 per capita per month at pre-war prices. eNational Planning Committee was set up by Subhash Chandra Bose under the chairmanship of Jawaharlal NehruBYJU'S EXAM PREP. C.2,3and 4 D.1and 4 E.2and3BYJU'S EXAM PREP. Ans. B Sol. World Bank describes Poverty as a state of deprivation in well-being and comprises many dimensions: > Low incomes > Low levels of health and education > Poor access to clean water and sanitation > Inadequate physical security > Lack of voice > Insufficient capacity and opportunity to better one's lifeBYJU'S EXAM PREP. 7. Planning Commission Expert Group estimated poverty lines for rural households to be at 1960-61 prices. A. 20 B. 825 C. 330 D. 35, E. 40BYJU'S EXAM PREP. Ans. A Sol. Planning Commission Expert Group (1962) estimated poverty lines to be Rs. 15 per capita per month for rural households and Rs. 22.5 per capita per month for urban households at 1960-61 prices.BYJU'S EXAM PREP. the following committee established the first tic assessment of poverty in India, based on nal Sample Survey (NSS) data? ‘A. VM Dandekar committee B. Planning Commission committee C. Y.K. Alagh committee D. Lakdawala committee E. Tendulkar committeeBYJU'S EXAM PREP. Ans. A Sol. eV N Dandekar and N Rath made first systematic assessment of poverty in India, based on National Sample Survey (NSS) data eThey established the consumption levels required to meet a minimum calorie norm of an average calorie norm of 2,250 calories per capita per day.BYJU'S EXAM PREP. 9. Which committee assum: e basket of goods and services used to calcul. ne CPI-AL reflect the consumption patterns of the poor? AVI indekar committee lagh committee kdawala committee D. Tendulkar committee E. Rangarajan CommitteeBYJU'S EXAM PREP. Ans. C Sol. eLakdawala Committee assumed that the basket of goods and services used to calculate CPI-IW and CPI-AL reflect the consumption patterns of the poor. eRecommendations of Lakdawala Committee led the erstwhile Planning Commission to adopt the practice of calculating poverty levels in rural and urban areas in the states using state-specific poverty lines together with national estimates from 1997 to 2004-05.BYJU'S EXAM PREP. Q10. Match the following poverty estimation committee with the year of their establishment Committee Year of establishment (A). Lakdawala Committee 1. 1979 (B). Tendulkar Committee 2. 2009 (C). Rangarajan Committee 3. 2012 (D). ¥. K. Alagh 4.1993 A. A-4, B-2, C3, D-1 B. A-2, B-1, C-4, D-3 C. Ar1, B-3, C-4, D-2 D. A-4, B-3, C-4, D-2 E. A:2, B-4, C-1, D-3BYJU'S EXAM PREP. Ans. A Sol. eLakdawala Committee was set up in 1993, Tendulkar Committee was set up in 2009, Rangarajan Committee was set up in 2012 and Y. K. Alagh was set up in 1979.weyus 28 EXAM PREP & BYJU'S EXAM PREP