Work Book-2

RAU'S IAS
STUDY CIRCLE
BLUE WORKBOOKS
INDIAN ECONOMY AND

ECONOMIC DEVELOPMENT
[Module - II]
GENERAL STUDIES
PRELIMS PAPER-I
MAINS PAPER-III
WORK BOOK-2
1. India’s Poverty: Issues, Concerns and Policy Remedies
2. Practice Questions
INDEX
INDIAN ECONOMY AND
ECONOMIC DEVELOPMENT
WORK BOOK-2
CHAPTER PAGE
CHAPTER NAME
NO. NO.
1. India’s Poverty: Issues, Concerns and Policy Remedies 1-25
2. Practice Questions 26-33

1 India’s Poverty: Issues, Concerns
CHAPTER and Policy Remedies
CONTENT
1. Introduction
2. Need for measuring the extent of Poverty
3. Chronological Evolution of Poverty Lines in India
3.1 Pre-independence India
3.1.1 Poverty Estimation by Dadabhai Naoroji (1876)
3.1.2 National Planning Committee (1938
3.1.3 The Bombay Plan (1944)
3.2 Post-independence India
3.2.1 Planning Commission’s Working Group (1962)
3.2.2 Poverty Estimation by Dandekar and Rath (1971
3.2.3 Task Force on Projection of Minimum Needs and Effective Consumption Demand (1979) (popularly
known as Alagh Committee)
3.2.4 The Expert Group on Estimation of Proportion and Number of Poor (1993) (Popularly known as the
Lakdawala Committee)
3.2.5 Expert Group to Review the Methodology for Estimation of Poverty (2009) (Popularly known as the
Tendulkar Committee)
3.2.6 Expert Group to Review the Methodology for Measurement of Poverty (2014) (Popularly known as the
Rangarajan Committee)
3.3 Socio-economic and Caste Criterion based on SECC-2011 Census for identification of Poor People
4. Poverty is Inherently Multidimensional
5. Poverty Trends in India
5.1 Trends in Poverty, 1950 to 1974
5.3 Explanations for Poverty Trends up to 1999-2000
5.4 Estimates for 2004-05 and 2011-12 using Tendulkar Methodology
5.5 Regional Profile of the Poverty
5.6 Poverty Profile: Social Groups
5.7 Poverty Profile: Religious Groups
6. Major Factors behind India’s Poverty
7. Poverty Alleviation – Strategic and Policy Framework
1. Introduction
India attained Independence on 15 August 1947. Speeches made in the Constituent Assembly reflected the
vision of the country’s leaders, as those present dedicated themselves to the service of the nation and to the
larger cause of humanity. Dr. S. Radhakrishnan, India’s first Vice President, also noted that a free India would
be judged by the way it served the interests of the common people in terms of food, clothing, shelter and
social services. In his address on Independence Day on 15 August 1947, Dr. Rajendra Prasad asked that
Indians resolve to create the conditions to enable all individuals to develop and rise to their fullest stature,
such that poverty, squalor, ignorance and ill-health would vanish and the distinction between high and low
and between rich and poor would disappear. In general, the primary duties of a ruler (or king or state) are
protecting the country, maintaining law and order and safeguarding the welfare of the people. Centuries ago,
Kautilya advised Chandragupta Maurya that, for a ruler, ‘in the happiness of his subjects lies his happiness; in
their welfare his welfare. He does not consider as good only that which pleases him but treats as beneficial
whatever pleases his subjects’
The Indian Constitution’s Directive Principles of State Policy are to be used as guidance in making laws and
policy and in the governance of the country (Constituent Assembly of India, 1949). For instance, Article 38
RAU’S IAS STUDY CIRCLE | INDIAN ECONOMY AND ECONOMIC DEVELOPMENT | MODULE – II | WORK BOOK - 2 1
INDIA’S POVERTY: ISSUES, CONCERNS AND POLICY REMEDIES
pertains to the state securing a social order for the promotion of the welfare of the people. Article 38(2)
requires the state to strive to minimize inequalities in income, status, facilities and opportunities, not only
among individuals but also among different spatial and occupational groups. Article 39 requires the state to
secure the right to an adequate means of livelihood for all citizens, men and women; to ensure equal pay for
equal work; to protect the health and strength of workers and children; and to provide opportunities and
facilities for people to develop in a healthy manner and in conditions of freedom and dignity. Articles 41, 42
and 43 require the state, within the limits of its economic capacity and development, to make effective
provision to secure the right to work, education and public assistance in cases of unemployment, old age,
sickness and disablement, and in other cases of undeserved want; to provide for just and humane conditions of
work and maternity relief; and to ensure a living wage to enable a decent standard of life for all workers,
through suitable legislation or in any other way. Article 46 requires that the state promote with special care the
educational and economic interests of vulnerable groups, especially Scheduled Castes (SCs) and Scheduled
Tribes (STs). And Article 47 states that the primary duties of the state include raising the level of nutrition and
the standard of living of its people and improving public health.
Reviewing the measures that have been taken to implement the Directive Principles of State Policy, especially
relating to poverty related outcomes, it is widely observed that there has been the gaps and failures and
represent a major policy concern, as they deviate from what was envisaged in the Constitution and the
Directive Principles of State Policy. Inequalities in income, status, facilities and opportunities have been
minimized neither among individuals nor among different spatial and occupational groups. The challenge of
chronic poverty emanates from the fact that the growth mediated poverty-reducing strategy has bypassed
various historically marginalized groups and deprived regions. Further, persistent spatial backwardness and
inequality have led to concentration of poverty in certain parts of the country, meaning there is a geographical
dimension to poverty. Additionally, since poverty remains especially prevalent among certain occupational
groups, there is a sociological dimension to its persistence.
A large proportion of those in poverty are the ‘working poor,’ for whom the state has not been able to meet its
requirement to secure the right to an adequate means of livelihood. Levels of malnutrition, child malnutrition
and chronic energy deficiency are high, and incidence of malnutrition exceeds incidence of income poverty.
Overall, and as is well known, there is a sharp dichotomy between two very different realities in India: rapid
growth and significant resilience in the face of immense global challenges on the one hand, and the
exclusionary nature of growth and denial of the most basic amenities and development opportunities to
roughly half the population on the other.
2. Need for measuring the extent of Poverty

Why do we need to measure the extent of poverty and chronic poverty? Given the fact that there is a sharp
dichotomy in India between rapid growth and its exclusionary nature, poverty measurement is vital due to two
reasons: One, poverty measurement serves a normative role in helping the classification of the population of
the society or economy into poor and the non-poor individuals or households. Secondly, poverty measurement
serves a monitoring role and therefore estimates are important inputs to designing, implementing and
examining appropriate anti-poverty initiatives. Poverty measurement thus serves as a barometer of the extent
to which growth and development are inclusive, and as an indicator of the success or failure of strategies for
inclusive growth and poverty reduction.
The World Bank initiative on ‘poverty reduction and equity’ considers numerous dimensions of well-being –
such as income, consumption, health, education and assets ownership, but lays emphasis largely on the
income and consumption dimension and less frequently to the other dimensions. If measurement of poverty in
India has been an issue involving conflict, internationally too there have been disagreements over the
definition of welfare measures and therefore choice and estimation of poverty. Broadly, the two popular
methods of setting the poverty line in the conventional money-metric procedure are the cost of basic needs
approach and the food-energy-intake method. However, if poverty is given a multi-dimensional definition -
adding attributes to be considered, the degree of complexity in measurement increases.
In India, definition and identification of poverty has undergone important changes with the passage of time.
Poverty measurement in India has indeed served the monitoring purpose despite the complexities and
numerous disagreements while the normative purpose remains questionable due to the questionable nature of
the very norm that defines a person as poor or non-poor.
3. Chronological Evolution of Poverty Lines in India

3.1 Pre-independence India:
During the British rule, massive outflow of wealth has been held responsible for the miserable state of people.
The British system of arbitrary and repressive administration caused widespread poverty. Dadabhai Naoroji
stated that, “under the present system of administration, India is suffering seriously in several ways and is
sinking in poverty.”
3.1.1 Poverty Estimation by Dadabhai Naoroji (1876)
Without using the term ‘poverty line’ Naoroji estimated the subsistence needs of the people and consequently
arrived at a subsistence based poverty line at 1867-68 prices. In his book, ‘Poverty and Un-British rule in
India,’ Naoroji refers to subsistence as something that is essential for meeting the basic wants of human
beings to keep them in ordinary good health and decency. Thus he estimated ‘necessary consumption,’ using
the diet for emigrant coolies as prescribed by the Government Medical Inspector of Emigrants. The prescribed
intake was supposed to provide the necessary inputs to the emigrant coolies during their journey (‘in a state of
quietude’ being transported to various British colonies) and therefore the energy composition was not
sufficient for working individuals. The Government Medical Inspector’s diet requirements were converted
into monetary terms using the prices prevailing in Ahmadabad at that time. Similarly, he also calculated the
subsistence level cost of living for various regions of the country by using various other sources of diet data
such as the expenses on the sustenance requirements of prison inmates in a number of Indian provinces and
the necessities of an ordinary agricultural worker in Bombay Presidency. He arrived at the subsistence costs
of living that ranged between Rs. 16 to Rs. 35 per person per annum in various regions of the country. Naoroji
remarked that even in times of good harvest the total produce was insufficient to meet the basic requirements
of food and clothing as afforded by a criminal. There was little possibility of saving for deficiency due to crop
failure.
Naoroji’s calculation and measurement of the poverty lines in the pre Independence India is a landmark in the
history of poverty evaluation in India and in fact the first ever attempt of such a scale and commitment that
defines the earliest poverty line.
3.1.2 National Planning Committee (1938)
In 1938, Indian National Congress at its Haripura session appointed a National Planning Committee with
Pundit Jawaharlal Nehru as the Chairman and KT Shah as the Secretary to draw the roadmap for development
of independent India. For the pre-World War II period, the Committee noted that the minimum requirement
had been estimated to range between Rs. 15 to Rs. 25 per capita per month whereas the approximate estimate
of the average income per capita per annum was Rs. 65 while the average income of the villager was
estimated to be merely Rs. 30 per capita per annum. While recommending the minimum income requirement,
the Committee considered some objective tests that included inter-alia the improvement of nutrition from the
standards of an irreducible minimum requirement of proteins, carbohydrates and minerals; improvement in
clothing from about fifteen yards to at least thirty yards per capita per annum; housing standards to reach at
least 100 square feet per capita.
3.1.3 The Bombay Plan (1944)

In 1944, the Bombay Plan was proposed by a group of industrialists charting out the developmental (and
reconstruction) aspirations of the capitalist class for India after independence. The Plan stated in its aim that in
the initial 15 years of India’s rebirth there was the need to achieve - “a general standard of living which
would leave a reasonable margin over the minimum requirements of human life”. The authors considered
food, clothing, shelter, healthcare and basic education in the minimum requirements and specifically 2800
calories of well-balanced food per day, 30 yards of clothing per year and 100 square feet of housing as the
minimum need for an individual. They arrived at Rs.74 as the minimum per capita per annum monetary
resource required for attaining the said minimum at the pre-war prices. Using this they arrived at the target
for the per capita income and proposed that per capita real income of the time would have to be doubled to
attain the targeted consumption and standard of living.
Thus, in the pre independence years though the estimation of poverty was done – it was largely a non-
institutional attempt. The definition of poverty and therefore the poverty line was food or diet centric and the
requirements beyond subsistence were not emphasized. Nevertheless the importance given to the issue and the
concern for removing poverty among the national leaders is commendable.
3.2 Post-independence India
Pundit Jawaharlal Nehru in his historic speech ‘Tryst with Destiny’ at the time of independence remarked
explicitly that “ending of poverty and ignorance and disease and inequality of opportunity” as one of the
major nation building tasks facing modern India.
3.2.1 Planning Commission’s Working Group (1962)
The question and need for an official poverty line was for the first time proposed as well as formally discussed
among scholars and policy makers at the Indian Labour Conference in 1957. A task force known as the
Committee on Distribution of Income and Levels of Living was setup to evaluate the impact of a decade long
economic planning. Also, a working group was set up in 1962 to define a national subsistence minimum level.
Constituted in 1962, the group had eminent statisticians, economists and nutritionists among its members. The
working group made the following recommendations (GOI, 1962) -
(a) The national minimum for each household of five persons (four adult consumption units) should not
be less than Rs. 100 per month at 1960-61 prices or Rs. 20 per capita. For urban areas, the figure
would have to be raised to Rs.125 per household per capita or Rs. 25 per capita to cover the higher
prices of the physical volume of commodities on which the national minimum is calculated.
(b) The national minimum excludes expenditure on health and education, both of which are expected to
be provided by the State according to the Constitution and in the light of its other commitments.
(c) An element of subsidy in urban housing will have to be provided after taking Rs.10 per month or 10
% as the rent element payable from the proposed national minimum of Rs.100 per month.
Thus the committee set Rs.20 per person per month and Rs.25 per person per month as the poverty line for
rural and urban India respectively considering the amount sufficient to lead an active and healthy life.
In 1962, the Planning Commission prepared and released a paper ‘Perspectives of Development: 1961-76:
Implications of Planning for a Minimum Level of Living’. The paper laid loads of emphasis on poverty
removal. It stated that every person should be assured of a minimum level of income (taken as the one
recommended by the working group of 1962) within a realistic time and the minimum should be revised with
the passage of time as the economy progresses. Interestingly, the poverty benchmarks suggested in the pre-
independent India (Naoroji, National Planning Committee and the Bombay Plan) and the post-independence
suggestion by working group (1962) were all referring to a subsistence or minimum norm that drew majorly
from the survival requirements for food/energy, but none of them built a connect between food/energy
requirements and the poverty line. The connection was for the first time in India successfully attempted in the
empirical investigation of poverty by Dandekar and Rath in 1971.
3.2.2 Poverty Estimation by Dandekar and Rath (1971)
V.M. Dandekar and Nilkanth Rath made a seminal contribution in poverty estimation in 1971. Sukhatme
(1965) using the data from the National Institute of Nutrition found the energy requirements for an average
Indian, keeping in view the average age, gender and work nature, as 2250-2300 kilocalories daily. Dandekar
and Rath (1971) used this finding in their study to define poverty in India in the circumstances prevailing in
those years. They considered the ability or otherwise to get two square meals daily as the deciding factor for
categorizing one as poor or not. Thus via empirical research, they linked calorie intake with the poverty line.
Using the data provided by Professor P V Sukhatme, they arrived at the figure of 2250 kcal. Consequently, the
researchers defined poor as those who were short of income that did not allow them to access food
provisioning 2250 kilocalories. This was the poverty line proposed by them – common for rural and urban
India. For the monetary conversion of the energy norm, the National Sample Survey (NSS) data for consumer
expenditure was used to arrive at the per person monthly expenditure. At 1960-61 prices, this was obtained as
Rs.15.20 per person per month for rural India and the urban poverty line estimate was Rs.21.50 per person per
month. But unlike the working group (1962), Dandekar and Rath specify the nutrition norm and the relevant
set of prices to arrive at the poverty lines for rural and urban India.
3.2.3 Task Force on Projection of Minimum Needs and Effective Consumption Demand (1979)
After a decade and a half (on July 30, 1977), the Planning Commission set up another committee known as the
Task Force on Projection of Minimum Needs and Effective Consumption Demand under the chairmanship of
Dr. Y K Alagh. Over the previous years a number of academic research studies had been undertaken relating
to the issues of poverty estimation at the Indian Statistical Institute (Calcutta), Sardar Patel Institute of
Economics and Social Research (Ahmadabad), and different insights by independent researchers had also
been widely debated and discussed. With the aim to consolidate the precious ideas and information on the
subject, the task force was expected to come up with a clear private consumption model for the ensuing Five
Year Plan.
After reviewing large literature on demand and poverty estimation, the task force estimated the poverty lines
for the rural and urban areas separately and used the age-sex-activity specific calorie requirements as
recommended by the Nutrition Expert Group (1968), the Expert Group came up with the calorie requirement
per person per day as 2400 kilocalories in rural areas and 2100 kilocalories in urban areas. The monetary
equivalence for these poverty lines was obtained using the data on household consumption (both in
quantitative and value terms) by National Sample Survey conducted in the year 1973-74. On the basis of the
consumer behavior exhibited and captured by observation for the year 1973-74, calculations led to Rs. 49.09
per person per month as the poverty line for rural areas at 1973-74 prices. Similarly Rs. 56.64 per person per
month as the poverty line for urban areas at 1973-74 prices. When the prevailing prices, that is, those for
1976-77 were used, the poverty lines were obtained as Rs. 61.80 per person per month and Rs. 71.30 per
person per month in the rural and urban areas respectively.
The report of the Task Force has been criticized for the use of a common basket of consumption goods in all
regions or states has found little acceptance. The methodology also assumes that the prices and price
movements of the consumption baskets are identical across various States. However, this is far from the
reality. Suggestions have been made regarding use of State specific poverty lines based on the State specific
consumption patterns and State specific relevant prices and to conform to the standard of consistency, the
national poverty line should be a weighted average of the States specific poverty lines.
3.2.4 The Expert Group on Estimation of Proportion and Number of Poor (1993) (Popularly known as the
Lakdawala Committee)
With the view to consider afresh estimation of poverty, an Expert Group was constituted by the Planning
Commission in 1988-89. The terms of reference of the Expert Group were to look into the methodology for
estimation of poverty at national and state level and also to go into the question of re-defining poverty line, if
necessary.
The Group considered the calorie norm approach as a starting point for the poverty estimations and suggested
continuation of associating the poverty line with a fixed basket of consumption as recommended by Alagh
Committee. The Expert Group was of the opinion that an allowance must be made for the divergence found in
inter-state or inter-regional calorie requirements due to differences in demographic and activity structures in
addition to variations in preferences, climate and even prices at a point of time and over passage of time. But,
due to lack of data, the Group ruled out the possibility of considering and using inter-state variations in
normative calorie requirements. It was decided to apply the minimum living standard uniformly to the entire
country. The commodity basket corresponding to this minimum living standard be decided at the national
level and then applied to all States. This was proposed to ensure a cross-state comparison as well as an inter-
temporal assessment.
Specifically, the recommendations of the Expert Group included the following-
(a) The poverty line drawn by the Task Force (1979) as monthly per capita total expenditure of Rs.49.09 and
Rs.56.64 for rural and urban areas respectively at 1973-74 prices is to be continued at the national level.
Rooted in the consumption norm of 2400 kilocalories per person per day and 2100 kilocalories per person
per day for rural and urban areas respectively, these norms were to be adopted uniformly for all the states
as well.
(b) The national level rural as well as urban poverty lines (as defined by the Task Force, 1979 were suggested
to be disaggregated into State specific poverty lines. To begin with, the standardized consumption basket
corresponding to the poverty line should be valued at the state specific prices prevailing in all the Indian
states in the year 1973-74, taken as the base year. In order to use the poverty line in a later year/ updating
from the base year required a State specific price index which was calculated by considering a weighted
average of the state specific food and nonfood (fuel and light; clothing and footwear; miscellaneous) price
indices of the Consumer Price Index of Agricultural Laborers.
(c) Using the updated State-specific poverty lines and the corresponding size distribution of per capita
consumption expenditure of NSS, the incidence of poverty as the proportion of poor of the total
population or the poverty ratio is to be thereafter computed for the rural and urban areas for every Indian
state. Also, the number of poor in each State in rural and urban areas should be calculated by applying the
poverty ratio to the population estimates as provided by the Registrar General of Census.
(d) The national level poverty ratio should be derived as a ratio of the aggregate number of State-wise poor
persons to the total population of the country - both rural and urban residents included.
The Expert Group submitted its recommendations in July 1993 and these were deliberated upon for almost
four years and was accepted in 1997 by the Government with some modifications. The methodology used for
arriving at the State specific poverty lines has been one of disaggregation of the all-India data. However, most
of the critique held the view that since the state level data on consumption expenditures is available, this
should have been the beginning and thereafter aggregation of the state level estimates should have been used
to arrive at the national level estimates, i.e. aggregation from the State level to the county level rather than the
one adopted by the Expert Group.
3.2.5 Expert Group to Review the Methodology for Estimation of Poverty (2009) (Popularly known as the
Tendulkar Committee)
In light of the discontent with the methodology adopted to arrive at the official estimates of poverty and
alternative views of many scholars and critics on the issue led the Planning Commission to set up an expert
group under the chairmanship of Prof. Suresh Tendulkar to study and scrutinize the issue and suggest a new
poverty line. The expert group delved into all the issues in good detail and made some crucial
recommendations. Though the committee recognized the multi‐dimensional nature of poverty, it decided to
confine the study and definition of poverty in terms of private consumption. As had been the practice, the use
of private household consumer expenditure of Indian households as collected by the National Sample Survey
Office for the purpose was to be continued. Data from the latest available consumption patterns in 2004-05
was applied for estimation of poverty.
The major differences between the approach of the Expert Group (2009) and the earlier approaches, include
the following –
(a) The Committee pointed out that the actual observed calorie intake of urban citizens near the poverty line
as 1776 kilocalories per capita per day which closely matches the FAO (Food and Agricultural
Organization) recommended standard of 1770 and the actual observed intake of rural citizens around the
new poverty line (1999 kcal per person per day) also exceeds the FAO recommended intake. Given the
fact that there has been a poor correlation between food consumed and nutrition outcomes in the past, the
Tendulkar Committee has proposed a poverty line which is not anchored from the calorie benchmark,
rather based it on adequacy of actual food expenditure near the poverty line to ensure certain aggregate
nutritional requirements are fulfilled.
(b) The Expert Group decided to adopt the Mixed Recall Period (MRP)‐based estimates of consumption
expenditure as the basis for future poverty lines as against the previous practice of using Uniform
reference period estimates of consumption expenditure. Till 1993-94, data sets on consumption
expenditure prepared by NSSO were collected by them on the basis of a uniform 30-day recall period for
all items of consumption. But, 1999-2000 onwards, the NSSO shifted to the use of a mixed recall period
for collecting such information. Under the MRP, information on five broad item groups of household
consumer expenditure with low frequency of purchase namely, clothing, footwear, education, institutional
medical care and durables is collected on a 365 day recall basis while information on consumption
expenditure on all other items is collected on the basis of a 30 day recall period.
(c) The Expert Group (Tendulkar) had used the all-India urban poverty line basket as the reference to derive
state-level rural and urban poverty. This was a departure from the earlier practice of using two separate
poverty line baskets for rural and urban areas.
(d) It based its calculations on the consumption of the following items: cereals, pulses, milk, edible oil, non-
veg items, vegetables, fruits, dry fruits, sugar, salt and spices, intoxicants, fuel, clothing, footwear,
education, medical expenses, entertainment, personal and toilet goods, other services and durables.
(e) A provision in price indices for private expenditure on health and education has been made. The new
poverty line is broader as it explicitly takes into consideration the adequacy of the household consumption
expenditure for healthcare and education in addition to providing the basic calorie requirements
At 2004-05 prices the poverty line put forward by the committee is Rs. 446.68 per person per month in rural
areas and Rs. 578.80 per person per month in urban areas. The estimates shared by the committee place the
national level poverty rate at 37.2 % in 2004-05. Also, the poverty in rural India stood at 41.8 % and urban
poverty rate at 25.7% according to the new poverty line. Orissa, Bihar, Madhya Pradesh, Chhattisgarh and
Jharkhand find a prominent place for maximum number of people living under abject poverty.
The Expert Group submitted its report in November 2009 and its recommendations were formally accepted in
2011. The per person per day poverty line figures of Rs. 32 and Rs. 26 in urban and rural areas respectively
(per household per month poverty line translation into Rs. 4800 and Rs. 3900 for urban and rural areas
respectively) (at 2010-11 prices) seem to be grossly low, unimaginable and unacceptable in the prevailing
time of high inflation. Several states including filed affidavits disputing Planning Commission claims. Hearing
a Public Interest Litigation in respect of the Public Distribution System, the Supreme Court observed that
poverty lines are fixed by the Planning Commission are at meagre levels and therefore will not be enough to
meet the prescribed consumption levels.
The Government withdrew the acceptance of the report in 2012 admitting that the Tendulkar approach wasn’t
in line with the “ground reality” and promised to evolve a new approach. The Government announced for
setting up of the Rangarajan panel in May 2012 to review the methodology and recommendations of the
Tendulkar committee.
3.2.6 Expert Group to Review the Methodology for Measurement of Poverty (2014) (Popularly known as
the Rangarajan Committee)
As public expenditure on social services has increased substantially in recent years, but these expenses are not
captured, by design, in the NSSO’s Consumer Expenditure Surveys. The committee is also expected to
recommend how the poverty estimates be linked to eligibility and entitlements for government’s social sector
schemes and programmes. In its report submitted in June 2014, the Expert Group made some significant
suggestions and changes in the definition of poverty line.
The Methodology developed and adopted by the Expert Group (Rangarajan) and the results based on these are
outlined below:
(i) The poverty line should be based on certain normative levels of adequate nourishment, clothing, house
rent, conveyance and education, and a behaviorally determined level of other non-food expenses.
(ii) The Expert Group (Tendulkar) had used the all-India urban poverty line basket as the reference to
derive state-level rural and urban poverty. This was a departure from the earlier practice of using two
separate poverty line baskets for rural and urban areas. The Expert Group (Rangarajan) reverts to the
practice of having separate all-India rural and urban poverty basket lines and deriving state-level rural
and urban estimates from these.
(iii) The Expert Group (Rangarajan) computed the average requirements of calories, proteins and fats based
on ICMR norms differentiated by age, gender and activity for all-India rural and urban regions to derive
the normative levels of nourishment. Accordingly, the energy requirement works out to 2,155 kcal per
person per day in rural areas and 2,090 kcal per person per day in urban areas.
(iv) The protein and fat requirements have been estimated to be 48 gms and 28 gms per capita per day,
respectively, in rural areas; and 50 gms and 26 gms per capita per day in urban areas.
(v) The average monthly per capita consumption expenditure on these food items was estimated to be
Rs.554 in rural areas and Rs.656 in urban areas (NSS 68th Round).
(vi) The median fractile (45-50%) values of clothing expenses, rent, conveyance and education expenses are
treated as the normative requirements of the basic non-food expenses of clothing, housing, mobility and
education of a poverty line basket. This works out to Rs.141 per capita per month in rural areas and
Rs.407 in urban areas. The observed expenses of all other non-food expenses of the fractile classes that
meet the nutrition requirements are considered as part of the poverty line basket. This works out to
Rs.277 per capita per month in rural areas and Rs.344 in urban areas.
(vii) The new poverty line thus work out to monthly per capita consumption expenditure of Rs.972
(554+141+277) in rural areas and Rs.1,407 (656+407+344) in urban areas in 2011-12. For a family of
five, this translates into a monthly consumption expenditure of Rs.4,860 in rural areas and Rs.7,035 in
urban areas.
(viii) The national rural and urban poverty lines computed as above were used to derive the state-wise poverty
lines by using the state-specific distribution of persons by expenditure groups (NSS). State-level poverty
ratio was estimated as weighted average of the rural and urban poverty ratios and the national poverty
ratio was computed again as the population-weighted average of state-wise poverty ratios.
(ix) The Expert Group (Rangarajan) therefore estimates that the 30.9% of the rural population and 26.4% of
the urban population was below the poverty line in 2011-12. The all-India ratio was 29.5%. In rural
India, 260.5 million individuals were below poverty and in urban India 102.5 million were under
poverty. Totally, 363 million were below poverty in 2011-12.
(x) The poverty ratio has declined from 39.6% in 2009-10 to 30.9% in 2011-12 in rural India and from
35.1% to 26.4% in urban India. The decline was thus a uniform 8.7 percentage points over the two
years. The all-India poverty ratio fell from 38.2% to 29.5%. Totally, 91.6 million individuals were lifted
out of poverty during this period.
Measurement of poverty has been attempted in India since pre-independence years. Various individual and
institutional experts in addition to the official authorities have defined poverty and attempted measurement of
poverty at both all India as well as rural and urban decomposed levels. It is significant to note that despite
differences of opinion, regarding what constitutes poverty and the manner in which information regarding the
parameters that define poverty need to be assessed, the definition of poverty has evolved to encompass
multiple dimensions of deprivation. This has been in tune with the widely accepted change of thinking and
practice outside India.
3.3 Socio-economic and Caste Criterion based on SECC-2011 Census for identification of Poor People
It was observed after seeing that the poverty estimates of World Bank, Asian Development Bank has
identified the poor people in India which were significantly larger than the government estimates of poverty in
India. It was being felt that the current definition of poverty — which was derived by identifying a basket of
essential goods and services and marking the point in India’s income distribution where that basket could be
purchased by an individual — was missing too much. So, a broader and more dynamic definition of poverty
seemed important and it was felt that data collected in SECC-2011 could be used to develop the criterion
based on socio-economic status of the households. It is relevant to note that the regular Population Census is
carried out under Census Act, 1948, which is concerned with individual’s information and according to this
Act, Government must keep individual's personal information confidential. On the contrary, information given
in the Socio Economic Caste Census (SECC) is related to households and is open for use by Government
departments to grant and/ or restrict benefits to households.
Objectives of SECC 2011
 To enable households to be ranked based on their Socio- Economic status, so that State Governments can
then prepare a list of families living below the poverty line.
 To make available authentic information that will enable caste-wise population enumeration of the
country, and education status of various castes and sections of the population.
Criteria used in SECC 2011
Based on SECC data, a Committee set up by the then Planning Commission developed parameters to identify
the socio-economic status of households i.e., automatic exclusion on the basis of 14 parameters, automatic
inclusion on the basis of 5 parameters and the extent of deprivation on the basis of 7 parameters. These criteria
are used for identification of poor people according to the socio-economic status of households.
Parameters of Automatic Exclusion: -
1. Motorized 2/3/4 wheeler/fishing boat.
2. Mechanized 3-4 wheeler agricultural equipment.
3. Kisan credit card with credit limit of over Rs. 50,000/-.
4. Household member government employee.

5. Households with non-agricultural enterprises registered with government.
6. Any member of household earning more than Rs. 10,000 per month.
7. Paying income tax.
8. Paying professional tax.
9. Having 3 or more rooms with pucca walls and roof.
10. Owns a refrigerator.
11. Owns landline phone.
12. Owns more than 2.5 acres of irrigated land with 1irrigation equipment.
13. 5 acres or more of irrigated land for two or more crop season.
14. Owning at least 7.5 acres of land or more with at least one irrigation equipment.
Parameters of Automatic inclusion
1. Households without shelter.
2. Destitute, living on alms.
3. Manual scavenger families.
4. Primitive tribal groups.
5. Legally released bonded labour.
Parameters for assessing the extent of Deprivation
1. Households with Kutchha house
2. No adult member in working age
3. Household headed by female and no working age male member
4. Household with handicapped members and no able bodied adult
5. Household with no literate over 25 years
6. Landless households engaged in manual labour
7. SC/ST households.
Key Findings of SECC-2011
Data addresses multi-dimensionality of poverty, and provides opportunity for a convergent, evidence based
planning with Gram Panchayat, as a unit. It is an opportunity for evidence based selection, prioritisation and
targeting of beneficiaries in different programs. Some of the findings of the SECC are as under:
 There are a total number of 24.39 crore households in India, of which 17.91 crore live in villages and
remaining 6.56 crore in urban areas.
 Applying these criteria on SECC (Rural), the following results have emerged:
o Total Households excluded based on automatic exclusion criterion basis = 7.07 crore (39.4%)
o Total Households excluded based on automatic inclusion criterion basis = 0.16 crore (0.91%)
o Remaining 10.68 crore households are considered as deprived. The economic status of a
household was computed through seven indicators of deprivation covering aspects of
landlessness, housing, source of income, disability etc.
o Households found with either of 7 deprivations = 8.72 crore (48.5%)
 Thus around 49% of the rural households can be considered poor in the sense of facing some
deprivation. These households show signs of poverty even though depth of poverty may be not enough
to categorise them as poor. These deprivations range from lack housing facility and education, to
absence of any male earning member, to households depending mainly on manual labour etc. This
finding points to the need to have a comprehensive social security structure.
 These extremely low income numbers follow from the nature of employment that most of rural India is
engaged in. The vast majority – over 90% - of rural India does not have salaried jobs.
 Working in anything other than agriculture will be a tough ask, given the level of education – fewer
than 10 per cent make it to higher secondary or above and just 3.41 per cent of households have a
family member who is at least a graduate.
 Only 30% of rural households depend on cultivation as their main source of income. Whereas, 51.14%
derive sustenance from manual casual labour (MCL). Fragmentation of landholdings has made it
difficult for even farmers to support themselves, let alone those dependent on MCL. Therefore, getting
people out of farms will spur mechanisation and consolidation of land holdings, leading to increased
agricultural productivity in the long run.
 In nearly 75 per cent of the rural households, the main earning family member makes less than Rs 5,000
per month (or Rs 60,000 annually). In just eight per cent of households does the main earning member
makes more than Rs 10,000 per month.
 56.25% of rural households hold no agricultural land. The numbers also point to the subsistence level
of farming that rural India currently practices. Therefore, creation of gainful non-farm employment
should receive top priority in policy making.
Thus, among the indicators, landlessness and a reliance on manual labour contributes the greatest to
deprivation. In all, half of rural India is deprived on at least one of these indicators. Thus, the SECC helps to
move to principle of 'program specific indicators for program specific entitlements'. Recognizing many
dimensions of poverty and tackling them with different programs, in multiple fields like health, education,
sanitation, mid-day meal can be universal; others like affordable housing, disability can be targeted.
4. Poverty is Inherently Multidimensional
The income based one dimensional poverty line gives only headcount. A life in poverty means living deprived
of sufficient food and nutrition, education, proper shelter, sanitation, clean water and so on. This indicates to
look at the poverty as a multidimensional phenomenon. In the Work Book-1, we have developed various
composite indices which put emphasis on different dimensions of poverty. One such index, which is widely
used, is Multidimensional Poverty Index (MPI) which is a joint venture of UK based Oxford Poverty and
Human Development Initiative (OPHI) and the United Nations Development Program (UNDP). The
Multidimensional Poverty Index (MPI) identifies multiple deprivations at the individual level in education,
health and standard of living. It uses micro data from household surveys, and all the indicators needed to
construct the measure must come from the same survey. Each person in a given household is classified as poor
or not depending on the number of deprivations their household experiences
The MPI is founded on the capability approach of Amartya Sen. The approach links 'poverty to the failure of
the ability to achieve precisely those things that are ultimately important'. A response to poverty then, is about
the expansion of choices and capabilities that people can have in order to lead lives they value.
It may be noted that World Bank has set the target of bringing down the global extreme poverty to less than 3
percent by 2030. The global community is now also duty bound to pursue the Sustainable Development Goals
(SDGs) which provides a holistic global development agenda, particularly for the poor countries. It may be
observed from the Table 2.1 that various dimensions of the MPI are connected with the SDGs. Thus, progress
in SDGs can be suitably monitored through the MPI data.
Table 2.1: The Global MPI Indicators Mapped to the SDGs
Dimension Indicator Related SDG
Nutrition SDG 2 (Zero Hunger)
Health
Child Mortality SDG 3 (Health and Well Being)
Years of Schooling SDG 4 (Quality Education)
Education
School Attendance
Cooking Fuel SDG 7 (Affordable and Clean Energy)
Sanitation SDG 6 (Clean Water and Sanitation)
Drinking Water
Living Standard
Electricity SDG 7 (Affordable and Clean Energy)
Floor SDG 11 (Sustainable Cities and Communities)
Assets SDG 1( No Poverty)
In 1947 when colonial British left India, they left 70 percent Indians in deep poverty and a tiny elite class that
controlled everything. Over six decades later in 2011-2012, India has 269 million (21.9 percent of total
population) people under the poverty line, as per the Tendulkar Committee Estimates for 2011-12. It used to
be 407 million (37.2 percent) in 2004-05 using the same methodology. As per the report of OPHI and UNDP
report for 2017, the poverty ratio was 41%, i.e. 528 million people in India. Similarly, in South Asia, the MPI
reveals 41.6% percent poverty compared with 19.2 percent from the World Bank’s income indicator (i.e.
$1.99 per capita per day). For the sub-Saharan Africa these figures are 60.1 percent and 46.4 percent,
respectively.
5. Poverty Trends in India
During the first 25 years of Indian independence, India’s efforts to reduce poverty produced retrogression. The
trend in the share of the population in poverty from 1951 to 1974 is shown in Figure 2.2.
Figure 2.2: Poverty Rate in India, 1951-74
Between 1952 and 1974, the share of the population in poverty moved up and down cyclically, most
importantly in response to good or bad monsoons, but there seems to have been an upward trend. The slow
economic growth between 1950 and the mid-1970s (averaging only 1.4 percent per capita) has been blamed
for this poor performance. More important for poverty reduction— because the great majority of poor people
live in rural areas—growth in agricultural production per capita was a miniscule 0.06 percent per year.
After 1974, Indian economic growth began to accelerate. In the agricultural sector, pricing reforms and new
technologies (the “green revolution”) led to faster growth in production and less vulnerability to fluctuations
in monsoon rains. Between 1974 and 1990, GDP per capita grew at an annual rate of 2.4 percent, and
agricultural output also grew faster, at 3.0 percent. After an economic crisis in 1990-1991, GDP per capita
grew even faster during the 1990s, averaging 4.2 percent between 1991 and 2001. During this period, the
overall poverty rate fell sharply, from 54 percent in 1974 to 26 percent in 1999-2000. The trend of this period
is shown in Figure 2.3.
Figure 2.3: Poverty Rate in India, 1974-2000
Table 2.4 provides that both rural and urban poverty have tended to decline together. India is still a
predominantly rural country, with more than 70 percent of the population living in rural areas in 2000. As
indicated by the table, the absolute number of poor Indians did not decline between 1974 and 1994. The fall in
the poverty rate was counterbalanced by a rise in total population. Between 1994 and 2000, however, the
number of poor people began to fall sharply—by 60 million people over the six-year period.
Table 2.4: India: Poverty Rate and Numbers in Poverty, 1974–2000
5.3 Explanations for Poverty Trends up to 1999-2000

The consensus in the economic literature is that India’s faster economic growth in recent years is a major
factor in explaining faster poverty reduction, and that slow economic growth before 1974 explained the poor
performance on poverty in earlier years. Figure 2.5 shows per capita GDP growth rates since 1950. Growth
was modest in the 1960s, very slow in the 1970s, and much more rapid afterwards. Except for a sharp
contraction in 1990-1991, per capita growth has been relatively steady since 1985. It has also been rapid,
averaging nearly 3.9 percent per year—which places it among the fastest growing in the world for the period.
The data suggest a general correspondence between faster per capita growth and faster poverty reduction in
terms of long term trends, but the relationship does not seem close for short periods of time. The poverty rate
fell in the last half of the 1970s, though growth was very slow. And one would have expected some poverty
reduction in the 1950s, when growth averaged nearly 2 percent, with income becoming more equally
distributed.
Figure 2.5: India: Per Capita GDP Growth
Most attribute the rapid economic growth of the 1990s to liberalization of the economy—reduction in
governmental controls, trade liberalization, and increased receptivity to foreign investment— that took place
from 1991 to 1996. Though the stabilizing element of the 1991 economic reforms would have been expected
to lead to a temporary rise in headcount poverty, most proponents of economic reform expected poverty to
decline faster in the 1990s than NSS surveys before 1999-2000 reported. The link between policy reforms and
faster growth is widely accepted, but the link between faster growth and poverty reduction is contentious
(Bhagwati Vs Sen & Draze Controversy).
5.4 Estimates for 2004-05 and 2011-12 using Tendulkar Methodology
The national level poverty ratio based on comparable methodology (Tendulkar Method) for 1993-94, 2004-05
and 2011-12 estimated from Large Sample Survey of Household Consumer Expenditure data of 50 th, 61st and
68th round respectively are given in Table 2.6. During the 11-year period 1993-94 to 2004-05, the average
decline in the poverty ratio was 0.74 percentage points per year. It accelerated to 2.18 percentage points per
year during the 7-year period 2004-05 to 2011-12. Therefore, it can be concluded that the rate of decline in the
poverty ratio during the most recent 7-year period 2004-05 to 2011-12 was about three times of that
experienced in the 11-year period 1993-94 to 2004-05.
The Expert Group (Rangarajan) therefore estimated the poverty ratio at 39.6% in rural areas and 35.1% in
urban areas for the year 2009-10. These ratios declined to 30.9% of the rural population and 26.4% of the
urban population in 2011-12. The all-India ratio was 29.5%. The decline was thus a uniform 8.7 percentage
points over the two years. The all-India poverty ratio fell from 38.2% to 29.5%. Totally, 91.6 million
individuals were lifted out of poverty during this period.
Table 2.6: Percentage and Number of Poor Estimated based on Tendulkar Methodology
5.5 Regional Profile of the Poverty

The spatial concentration of the poor in the rural and urban regions of the country for 2003- reveals that the
number of poor is getting increasingly concentrated in the four states of undivided Uttar Pradesh, Bihar and
Madhya Pradesh and also in the state of Odisha. Nearly 60 per cent of the total poor (rural and urban together)
in the country come from these states in 2009-10 as against about 45 per cent in 1983 or a little over 40 per
cent in 1973- 74. In 2009-10, these states contribute 65 per cent of the rural poor and 45 per cent of the urban
poor in the country, as against 50 per cent and 33 per cent, respectively in 1983. Between 2003-04 and 2009-
10, rural poverty has become less widespread and the concentration of poor in states, other than indicated
earlier, has come down, with some states transiting from higher category of contributors to the number of poor
in the country to the lower category. In urban areas, while the number of states contributing more than 10 per
cent to the total urban poor has come down dramatically; urban poverty remains as widespread in 2009-10 as
in 1993-94. In 2009-10 Uttar Pradesh and Bihar account for more than 10 per cent each of the total rural poor
in the country, while only Uttar Pradesh has a similar proportion of the country’s poor in its urban areas.
Urban poverty is widespread and more uniformly distributed across the states than rural poverty, which is
largely confined to the central Indian states indicated earlier, and West Bengal and Maharashtra.
5.6 Poverty Profile: Social Groups
In terms of social groups, poverty incidence at the all India level is higher among Scheduled Tribes (STs) than
among the Scheduled Castes (SCs) in rural areas and vice-versa in urban areas, though in both cases it
declines sharply between 1993-94 and 2009-10. In rural areas, SCs as a group experience a faster decline
between 1993- 94 and 2004-05, whereas in case of STs the faster decline is in the period 2004-05 to 2009-10.
In the urban areas while SCs experience a continuous decline throughout the period, for STs the declining
trend stagnates post 2004- 05. Despite the decline in the poverty incidence for STs and SCs, in 2009-10 HCR
for STs is 42 and 48 per cent higher respectively, in rural and urban areas in comparison to the all India figure.
Similarly in the case of the SCs, the HCR in 2009-10 is 33 per cent higher in rural areas and 31 per cent
higher in urban areas vis-à-vis the all India incidence. If the reference benchmark is the other category, i.e.,
non-STs and non-SCs at the all India level, this difference is likely to be starker.
Just as there are differences in the HCR for social groups, there are also differences in the HCR for religious
groups and its pace of decline over the years, indicated in the Table 2.7
Table 2.7: Poverty Incidence by Religious Group
5.8 Poverty Profile: Occupational Groups

The analysis of poverty profile by occupational groups at the all India level suggests that two categories of
workers, agriculture labour in rural areas and casual workers in urban areas have the highest poverty HCR.
This is due to the fact that both these occupational groups suffer from insecurity of employment as well as
wages. In the rural areas, the wage insecurity has started coming down in the past few years due to
implementation of floor-wages on public programmes under MGNREGS. The agriculture labour in rural areas
comprise nearly one-fourth of the population and exhibit the most widespread poverty with over one-third of
them being poor in 2009-10. The self-employed and others comprising 56 per cent of the rural population
have a lower HCR to labourers (agricultural and other labour), in 2009-10.
In the urban areas, casual labour comprising about 12 per cent of the population are the poorest with nearly
half of them being poor in 2009-10. The regular wage and salary earners and others comprising about 45 per
cent of the urban population are the least poor with a HCR of around 12 per cent, with others registering the
highest fall in the poverty incidence over the period. The poverty ratio of self-employed is close to the overall
average for urban areas.
6. Major Factors behind India’s Poverty
The major factors that led to deeply entrenched poverty in India are highlighted as below:
 Social Inequality Leading to Exclusion and Marginalization: Societies cannot progress if certain sections
of people are left-out simply because they happen to be from the “wrong” class, caste, ethnic group, race
or sex. They have historically lived isolated in the periphery of the villages and townships and subsisted
doing only those tasks considered “unfit” for the other castes. Their untouchability can be considered the
worst form of rejection by the mainstream society. Another segment of society that is still very much
detached from the mainstream is the tribal community forming 8% of the population. While
marginalization and exclusion happen in all societies, but in India it is in high proportions due to sheer
numbers. The remedy lies in policies leading to inclusion and empowerment of the poor.
 Illiteracy: High level of illiteracy, particularly in the rural areas and among women, has been a crucial
factor not only in perpetuating economic backwardness but also for high population growth. The
persistence of high illiteracy has created a situation where poverty and population have been feeding each
other. When women are educated, they not only contribute economically but also raise healthier kids and
keep the family size small. Early marriage of girls and early child bearing is closely related with their low
literacy; it feeds poverty. In 2018 only 26.6% women above 25 years found to have received secondary
education, as opposed to 50.4% men. In comparison, in China 54.8% women and 70.4% men had
secondary education; in the US, this figure was 94.7% for women and 94.3% for men.
 Population: India is set to become the most populous country by 2022. While the growth rate of
population has decreased significantly over the decades and the rate fertility decline has accelerated since
2011, India's population is currently growing annually at the rate of about 1.4 percent. The total fertility
rate has sharply fallen to 2.3 and should approach the replacement rate of 2.1 by 2020 and country's
population should stabilize by 2050 at around 1.5 billion and then begin to fall. The current population
increase is largely driven by population momentum (large base of people in the fertile age); not because
people want large families. Early marriage of girls and lack of awareness about reproductive healthcare,
particularly in the rural areas, are major factors behind current population growth. Population is clearly a
factor contributing to, and sustaining, high levels of poverty.
 Gender Inequality: Gender equality is both a core concern and an essential part of human development.
Indian social fabric is highly patriarchal which has left women significantly exploited and discriminated.
Their weak status, particularly in the rural areas, is at the root of most chronic problems. It is their lack of
awareness or access to family planning tools and early marriage of girls and their early child bearing,
which ultimately have led to high population; lack of awareness of health issues related to pregnancy and
child upbringing has resulted in high mortality rate, under-nutrition and malnutrition among children;
lower education and lack of freedom has resulted in low participation in societal processes. All these
factors are enough to feed and sustain poverty. On the World Economic Forum’s 2016 gender gap index
(GGI) India ranked 87 out of 144 nations and it further slipped to 108 position. The index benchmarks
national gender gaps on economic, political, education and health criteria.
 Unequal Distribution of Wealth: Another peculiarity is the land holding pattern in India: most land has
traditionally been under the control of a few landlords, leaving the vast majority landless. The "Zamindari
system” of lopsided land ownership has ancient origin but given a boost during the British rule. According
to the latest edition of Oxfam International’s global inequality report published in Jan 2017, the richest 1
percent in India owns 58 percent of the country’s wealth. In early 1990s, there were just 2 billionaires;
now there are 131 billionaires, in a country of 1.33 billion people. The rich elites are also controlling more
wealth, their share increased from 1.8 percent in 2003 to 26 percent in 2008. Rising inequality is trapping
more and more Indians in poverty; it is also fracturing the society and undermining Indian democracy.
Reducing inequality by 10 points in Gini coefficient (equivalent of a 36 percent reduction) could further
lift up another 83 million poor people. The push to urbanization means uprooting the poor from their rural
roots and turning them into “cheap labor resource” for businesses in the town. In the cities they would live
in large slums, exploited both by the mafia and employers, devoid of human dignity and livelihood
security. Given the huge population and poverty, India needs an "employment centric" economy –
millions of micro, small and medium business units.
 Jobless Economic Growth: Considering the population growth of around 18 million every year, around 10
million new jobs need to be created per year. In 7 years, between 2005 and 2012, India's GDP growth rate
was above 8% and only about 15 million new jobs were created. The Economic Survey 2015-16 estimated
that this informal sector provided 90% of jobs through the period 2004-05 to 2011-12. Further, the Survey
also pointed to a shift in the pattern of employment from permanent jobs to casual and contract
employment. The increasingly “temporary” nature of work has an “adverse effect” on the level of wages,
stability of employment, and employees’ social security. It also indicates preference by employers away
from regular/formal employment to circumvent labour laws. Thus the important fact to consider is the
huge workforce – people working in units employing less than 10 people – and those employed in the
informal sector.
 Corruption: Corruption and leakages in government schemes are widespread in India. Another common
form of corruption in schemes designed for the poor is inclusion of non-poor people with political
connections in the list of beneficiaries. The end result is that the eligible poor are denied the benefits.
 The Colonial Rule: "A significant fact which stands out is that those parts of India which have been
longest under British rule are the poorest today." (Jawaharlal Nehru, First Prime Minister of India). The
colonial British rule laid the foundation for a long term and chronic poverty in India after they departed.
Their economic policies actively favored non-Indians or made things difficult for Indian businessmen. As
occupiers, they used Indian wealth to pay for all their expansionist ventures and territory building both
inside and outside India. Moreover, the British policies forcibly disbanded community grain banks and
promoted replacement of food crops for local consumption with cash crops like cotton, opium, tea and
grains for export to feed the animals in England. This change in the cropping pattern left Indian farmers
vulnerable to famines. It is estimated that during the two centuries of colonial rule, famines and the
resulting epidemics caused over 30 million deaths. The most recent Bengal Famine of 1943-44 led to
about 1.5 million deaths from starvation; 3.5 million if deaths from epidemics are also included.
As oppose to the Western ‘trickle down’ capitalism India needs a comprehensive “human development” plan
in order to really crush the widespread poverty. It needs an economy that supports millions of small and
medium enterprises that are suitable to employ low skilled poor people. Focus on good governance to root out
deep rooted corruption that eats away major chunk of the welfare budget. Finally, promote women
empowerment through education and healthcare; it will greatly help deal with poverty fed by the population
growth. These major causes of poverty, by themselves, point to the right development model. India must
realize that by blindly following GDP growth, it is only promoting inequality that sustains by keeping the poor
in poverty.
7. Poverty Alleviation – Strategy and Policy Framework
The policy framework for poverty alleviation in India, like elsewhere in the world, has moved back and forth
between the importance to be accorded to growth, on one hand and to a direct attack on poverty, on the other.
While growth through its ‘trickle-down’ effect is expected to alleviate poverty over time, a direct attack on
poverty requires implementation of special programmes focused on the disadvantaged social groups and
backward regions. This is not to say that it has been an either/ or approach over the past seven decades.
Rather, it has been a matter of policy emphasis sometimes subtle, occasionally explicit and with mixed results.
The trickle-down theory assumed that poverty was only a marginal problem in the larger context of
underdevelopment and if the latter was addressed rapidly, poverty would get eradicated. It overlooked the
structural hurdles, including social and political that fragments markets in developing countries, thereby
reinforcing their failure in reaching out to the poor. It also paid little attention to prevailing low levels of
endowments among the poor and the impact that would have on their ability to participate in the growth
process.
With hindsight of India’s development experience over 1970s and 1980s and more recently in the last decade,
it appears that the success of a strategy involving a direct attack on poverty may also eventually hinge on the
economy’s capacity to sustain adequate growth. Growth is needed for generating resources to mount, or
expand the direct attack on poverty and it is needed to create the opportunities for the (capacitated) poor to
enter the markets productively. The evidence on growth-poverty relationship at the macro level in India is far
from conclusive. However, there are good reasons to believe that poverty reducing impact of growth can be
significantly improved through such direct measures that prevent deterioration in income inequalities in the
economy, both in the short term and over the medium to long term. The first requires social protection or
social security measures. The latter requires measures to improve capabilities and assets endowments of the
poor and in the chronically backward regions of the country to enhance their productivity levels over time.
Periodic compulsions of electoral-cycles and the demands of competitive politics at state and sub-state levels
have, at times, led to modification of half implemented poverty alleviation programmes, or their relaunch just
with a change of name. In some instances, it has resulted in overlapping schemes with large overhead
programme costs, lack of adequate context-relevance and occasionally design deficiencies that fail to support
the intended outcomes (Box 2.9). Indeed, at the central and state level in the country, there is a multitude of
social protection schemes covering a range of activities across different sectors, including elementary and
secondary education, preventive and curative public health services, self and wage employment, food and
nutrition security, old-age pensions and there are several schemes involving one-time transfers/grants to the
BPL households (Box 2.10)
Box 2.9
Major Anti-Poverty & Employment Generation Programmes being Implemented prior to 2014
Poverty eradication is one of the major objectives of planned development in India since independence. In India, the
economic growth with a focus on employment generation has remained as a key element of the strategy for poverty
reduction along with emphasis laid on the provision of basic minimum services like health, education, water supply,
sanitation, etc. Various anti-poverty, employment generation, and basic services programmes have been in operation for
decades in India. The ongoing reforms attached great importance to the removal of poverty and addressing specifically
the wide variations across states and him rural urban divide.
 Integrated Rural Development Programme (IRDP): Introduced in 1978-79 based on subsidy and bank credit to
create employment opportunities to raise the income generation capacity of generation of among poor and meant
to provide for supporting to the rural poor. Later this programme merged into a single programme is known as
Swarnajayanti Gram Swarozgar Yojana (SGSY) on 1st April, 1999.
 Jawahar Rozgar Yojana (JRY)/Jawahar Gram Samrudhi Yojana: Launched on 1st April, 1989 by merging
National Rural Employment Programme (1980) and Rural Landless Employment Guarantee Programme (1983
for employment to landless farmer and labours). In this programme the main objectives of creation of rural
economic infrastructure with employment generation and Poverty alleviation in rural areas.
 Rural Housing-Indira Awaas Yojana: Indira Awaas Yojana (IAY) it was the important programme of social
welfare and aims to providing free housing facilities to families of below the poverty line in rural areas. This
function will be founded sharing basis released by central and state government ratio of 75% and 25%, North-
Eastern states share of 90% & 10%, and Union Territories states for 100% share of central government. Later
this programme merged to Pradhan Mantri Grameen Awaas Yojana in 2015 and to provide housing facility for
all rural poor in India by targeting in year of 2022.
 Employment Guarantee Scheme: this scheme introduced in Maharashtra in the early 1970. Is an innovative of
antipoverty intervention and is provides a guarantee of employment to all adult 18 year of age who are willing to
unskilled manual work on a price rate basis.
 National Food for Work Programme: Launched on 14th November, 2004 under Ministry of Rural Development,
for the most 150 backward districts of India for the purpose of generating supplementary wage employment
only for who are poor with unskilled labors.
 Samporna Grameen Rozgar Yojana (SGRY): Launched on 25th September, 2001 by merging the requirements
of Employment Assurance Scheme (EAS-1993), Food for Work Programme (1977-78) and Jawahar Gram
Samrudhi Yojana (1989). This scheme especially provision of Women, Schedule Cast, Scheduled Tribes and
parents of children reserved from dangerous occupations those families of below the poverty line. This
programme founded sharing basis of 75% & 25% of Central and State government through district panchayats,
intermediate panchayats and gram panchayats.
 Training Rural Youth for Self-Employment (TRYSEM) was launched in 1979 as a special nation scheme for
training rural youth of age between 18-35 , and the scheme initiated to provide basic technical and marginal skill
to rural youth (belonging to BPL families) to enable them to take up self-employment and wage employment
 Swarna Jayanti Shahari Rozgar Yojana: Launched in 1997 to address eradicate urban poverty through provide
productive employment to the rural areas through encouraging them to setup self-employment and supporting to
skilled development and training programmes to facilitate the urban poor have access to employment
opportunities and empowering community to attempt the issue of urban poverty through suitable self managed
community structures like Neighborhood Groups (NHGs), Community development Society (CDS), etc. this
scheme was subsumed earlier three urban poverty alleviation programme.
 National Rural Employment Guarantee Act or MGNREGA 2005: Aims at enhancing employment securities in
rural areas by providing at least 100 days of in a financial year to eligible of every household whose adult
members. Under this scheme provides economic security and creates rural assets for its can help to eradicate
poverty, protection of environment, empowering rural women and reducing rural & urban migration.
 National Rural Livelihood Mission (NRLM-2011): Aims to eradicate extreme poverty and focused on promoting
increase self-employment, skill wage employment and organization of rural poor.
Source: Relevant Annual Reports of Ministry of Rural Development, Government of India
However, some initiatives have been effective in delivering the desired results in some parts of the country. In
general, measures to attack poverty directly have focused on half-hearted redistribution (of land) and
augmentation of household assets; creation of adequate livelihood opportunities through self and public wage-
employment programmes; social security including food and nutrition security programmes and social
transfers; provisioning of public goods and services that have a direct bearing on an individual’s capabilities
and her quality of life; strengthening of institutions and delivery mechanisms that empower the poor; and
targeted development of backward regions through resource transfers and supportive policy measures.
Without exception, these interventions have suffered from one or the other implementation weaknesses that
have prevented the full realization of the intended outcomes. Yet, in a country like India, given the magnitude
of its poverty and the depth of deprivation, there is room for all these different interventions to work in
tandem to improve the effectiveness of the development process for a rapid eradication of poverty. Some of
these interventions can be categorized as social protection measures that seek to specifically address the
vulnerability of individuals (or households) to poverty and deprivation arising out of their weak economic and
disempowered social context.
Box 2.9
Major Social Protection Schemes and Achievements during 2014-19
The Government is committed to provide social security to people as evident from the implementation of the following
schemes:
Pradhan Mantri Suraksha Bima Yojana, 2015: Accident insurance scheme offers one year accidental death and
disability cover at annual premium of Rs 12 for the people in the age group 18 to 17. As on 31.8.2018, around 14 crore
people have been enrolled under the scheme.
Pradhan Mantri Jeevan Jyoti Bima Yojana, 2015: Govt backed the life insurance scheme with annual premium of Rs
330 for the people in the age group 18 to 17. As on 31.8.2018, around 5.5 crore people have been enrolled under the
scheme with annual premium of Rs 2422.5 crore.
Atal Pension Yojana, 2015: Pension scheme targeted at the unorganized sector. In 2017-18, there were about 97 lakh
subscribers in the scheme.
Pradhan Mantri Fasal Bima Yojana, 2016: A crop insurance scheme for the farmers.
Pradhan Mantri Vaya Vandana Yojana, 2018: Pension Scheme exclusively for senior citizens aged 60 yaers and above.
As on 30.11.2018, there were 3.3 lakh subscribers with a corpus of Rs 22812 crore
Atal Bima Vyakti Klyan Yojana: For the insured people covered under the ESI Act 1948. Releif payable in cash in case
of unemployment and while they search new jobs. Provides benefit to 3 crore insured people under ESI scheme.
Pradhan Mantri Rozgar Protsahan Yojana, 2016: 12% of employer contribution to EPFO of the new employees
drawing salary up to Rs 15000 pm in given by the gOvt for initial 3 years. As on 31.1.2010, 1.24 lakh establishments
benefitted under the scheme.
PM Shram-Yogi Mandhan Yojana, 2019: Offers every people in unorganized sector with a regular pension after they
attain 60 years of age. As on 30.6.2019, about 30 lakh subscribers to the scheme
PM-KISAN, 2019: Offers every income support of Rs 6000 to all the farmers per year payable in three installments
irrespective of their landholdings. Ad on April 2019, about 3.1 crore small farmers got first tranche of Rs 2000 and 2.1
crore farmars got the second tranche.
Ayushman Bharat, 2018: Umbrella Scheme of two new initiative: (i) Health and Wellness Centre to provide
comprehensive primary health care, (ii) aims to cover about 10 crore poor and vulnerable families providing health
coverage up to Rs 5 lakh for secondary and tertiary treatments. As on June 2019, about 4500 HWC operationalized, as
on 31.12.2018, about 16000 hospital empaneled under the scheme.
National Nutrition Mission or POSHAN Abhiyaan: Ensure malnutritioon free India by 2022 through targeted
intervention in highly vulnerable areas. Scheme is rolled out in all districts of 36 states/UTs
Mission Indradhanush and Intensified Mission Indradhanush: To vaccinate the pregnant women/children in difficult
areas to reduce vaccine preventable infant mortality rate. As on April 2019, 3.3 crore children immunized of which 88
lakh fully immunized. Under IMI full immunization coverage is improved from 50% to 69%, as per coverage evolution
survey conducted in 2018 by WHO and UNDP.
PMAY – Gramin and Urban: Erstwhile IAY is merged under PMAY-G targeting housing for All by 2022.
Swachh Bharat Mission (Rural + Urban): 100% free defecation free by 2019. Urban areas 21 States/UT declared while
5.3 lakh villages declared open defecation free.
Source: Economic Survey, 2019
Some of these interventions on basic education (right to education), manual work in rural areas (right to work)
and food security (right to food) are now supported through limited legal entitlements, guaranteed by the
government. It is estimated that the total expenditure by the central government, as a share of GDP on six of
the major social protection related sectors (elementary education, health and family welfare, labour and labour
welfare, social security and welfare, and rural development) has increased from 1.06 per cent in 1995-96 to
1.35 per cent in 2005-06 and on to 1.75 per cent in 2010-11 and 2.3% in 2018-19. With the state governments
spending almost 4.5 per cent of GDP which has remained static since 2011, the total government expenditure
(centre and states combined) on major social protection programmes is estimated to be around 6.5% per cent
of GDP for the year 2017-18. If however, this expenditure was made into an income transfer for everybody, it
would still reduce poverty incidence by anything from one-fourth to one-half, depending on the expenditure
distribution of the BPL households. Thus the objective of alleviating or eradicating poverty could be better
served by taking recourse to targeted income transfers to the BPL households, instead of persisting with the
on-going social protection programmes. However, it also raises serious accountability issues on the public
agencies responsible for implementing these programmes. There is an urgent need to ensure that every rupee
spent on social protection measures counts and contributes in delivering the intended outcomes. It requires a
coherent and integrated policy framework that balances the objective of a time-bound eradication of poverty
with that of sustaining growth for improvement in average living standards.
India’s poverty alleviation framework needs a functional dovetailing into a four-pronged strategy. The four
pillars of the strategy are not necessarily mutually exclusive. They reinforce each other and collectively
provide a policy framework that is reasonably exhaustive for supporting effective poverty eradication. It is
also the case that one or more of these strategy pillars would need to be in the forefront, depending on their
relevance to the specific context, with others providing a facilitative environment for the strategy to
effectively eradicate poverty
I. Basic Needs Approach
The first pillar of the strategy includes a set of policies, programmes and direct public provisioning of goods
and services that supplements the development approach in meeting the identified basic needs of the people. It
goes beyond pure social protection measures in the sense defined to include free or subsidized provision for
food and nutrition security, public goods and utilities covering basic education, public health, water and
sanitation, access to energy and even basic livelihood opportunities in the Indian context. Almost all the
poverty alleviation programmes implemented by the government such as self-employment programmes, wage
employment programmes, food security programmes and other social protection programmes could be
included as programmes directed at meeting the basic needs, in one way or another.
There are several concerns that need to be addressed or taken to their logical conclusion to strengthen this
pillar of the poverty alleviation strategy.
 First, given that the central government’s role is only to supplement the public efforts on poverty
alleviation underway at the state level, it should restrict that role to providing technical support and
monitoring of the programmes once the funds have been transferred transparently and in a timely manner
to the state governments.
 Second, a bouquet approach to social protection initiatives should be evolved at the centre so that funds
are not extended thinly across states and across all conceivable programmes, and states are able to
exercise an option to the choice of programme it would like to benefit from.
 Third, there has to be a serious attempt at building convergence across different state and central or
centrally-sponsored schemes at the state level, more specifically at the district implementation level.
 Fourth is to expedite the shifting of the social security transfers including pensions, scholarships and
subsides directed at the BPL population to the Aadhaar-linked bank accounts of the beneficiaries.
 Fifth, in extending the supply of public goods and services related to water, sanitation and access to
energy there is a need to support public-private partnerships and encourage financial as well as
administrative empowerment of Panchayati Raj Institutions (PRIs) to set-up and run these utilities at the
local level. The strengthening of the PRIs is necessary for improving the overall effectiveness of social
security framework and to anchor the development of local economy.
 Sixth, employment generation programmes, principally the flagship wage employment programme,
MGNREGS, is to be seen as a social security intervention at a minimal level of sustenance for the rural
population. Employment generation programmes are effective in their impact on poverty alleviation if
they bring about a rise in real wages, otherwise it leads to an increase in the number of working poor, i.e.,
those who are employed by the time criterion but are unable to sustain a living above poverty line.
II. Human Rights Entitlement Approach
The removal of political and social barriers faced by the excluded population groups to their participation in
the economic mainstream of a society is an important precondition for making a durable impact on poverty
and transforming a society. Over the last few years initiatives have been taken by the central government in
giving shape to a rights-based social protection floor in India (viz. MNAREGA, RTI Act, RTE Act, NFSA
etc.). The public interventions creating legal entitlements for meeting basic human needs have to be
selectively used without undermining the fiscal sustainability of the process and the overall macroeconomic
environment.
III. Natural Resource Management Approach
India with 16 per cent of the world’s population, just 2 per cent of the world’s land mass and 4 per cent of the
world’s fresh water resources, presents a difficult challenge for a sustainable management of its natural
resources to meet the needs of its poor and the growing population. Not only are the poor typically more
dependent on natural resources including the commons for their daily sustenance, they are also likely to face a
disproportionate impact of natural disasters and climate change. About 69 per cent of India’s population
resides in rural areas (Census 2011), with every second person living off agriculture, two-third of which is
rain-fed or prone to droughts. At least 12 per cent of India’s landmass is prone to floods and river erosion and
three-fourths of its coastline threatened by cyclones and salinity ingress. This makes the Indian sub-continent
one of the world’s most disaster-prone areas. Unfortunately, much of India’s poverty is also concentrated in
regions that are likely areas of environmental stress. An optimal and sustainable management of limited
natural resources including land, water, and energy along with expansion in sanitation and public services are
vital for India to overcome poverty and reap the demographic dividend.
IV. Growth and Reforms for Poverty Alleviation
Sustained high growth is a vital element of a strategy to pull the poor out of their state of poverty and
deprivation. Growth has to be inclusive in its reach, supporting equality of opportunity for a productive life
with freedom and dignity. A strategy for inclusive growth has to encompass economic and social mobility for
all sections of society, in particular for the disadvantaged segments of population through expansion in their
capabilities. It also requires creating rapid expansion in opportunities across a range of skill sets backed by an
effective social protection floor, in part based on creation of limited legal entitlements.
In India’s case, economic reforms so far have basically focused on plucking the low-hanging fruits. Thus,
apart from the product market, and to a lesser extent the capital (or the financial) market, the other two
markets namely, the labour and land markets have been practically untouched. Rigidity in labour regulation
and the inherent inefficiencies of a segmented labour market has paradoxically prevented India from making
an optimal use of its relatively abundant factor of production and in evolving its comparative advantage.
Similarly, the land market in India is in a rudimentary stage. Attempts to address the legislative framework for
developing one have been contested by different interest groups and the political process, thereby creating a
major bottleneck in meeting land needs of non-farm sectors of a growing economy. While reforms in these
markets remain high on the agenda, even the other two markets that benefitted initially from the
macroeconomic reforms covering the fiscal policy, trade liberalisation and industrial deregulation, need to be
revisited for tying the remaining loose ends together. That includes issues related to consumer protection,
financial inclusion and deepening of the financial markets for an efficient mobilization of resources for growth
and development.
The crux of India’s poverty and development problem requires giving effect to a transition from low-
productivity farm-based employment to non-farm opportunities. This is essential for harnessing its
demographic dividend. It entails focus on manufacturing sector, which the ambitious New Manufacturing
Policy (NMP), 2011, and Make in India (2014) seeks to address, which require implementing hosts of
economic policies in an effective and transparent manner.
A successful management of India’s urbanization in the next few decades is vital for eradicating poverty and
its emergence as a developed country. With rising incidence of urban poverty, urbanization process has to be
guided to create more inclusive and sustainable growth of towns and cities in terms of social and economic
opportunities and with adequate civic amenities. Infrastructure deficit in power, railways, road transportation,
ports, urban and rural water supply, sanitation and irrigation are a major constraint in this task that need
innovative solutions. One can visualize the process of infrastructure development over the current and the
next decade in two phases. In the first phase focus has to be on developing the required public infrastructure
and services to facilitate connectivity, rural-urban and within urban habitations between the peripheral
settlements and economic centres. It has to be focused on supporting growth, ensuring an orderly development
of second and third tier urban habitations and transition of a few large cities to the level of megalopolis.
Innovative and decentralised approaches to housing and local body finance, regulation of the real estate sector
and efficient delivery of public services will be critical elements in meeting that objective. Programmes to
facilitate a continuous exit of low-skilled workforce from construction sector and their absorption into semi-
skilled and skilled service activity in these secondary and tertiary urban centres will have to be planned for. At
the same time, creation of a unique dynamics of economic viability for these habitations, including through
promotion of tourism, art, culture and handicrafts and also their integration with regional and national supply-
chains will have to be prioritized.
Indian agriculture faces a daunting challenge at a time when land availability for agriculture is shrinking and
available land under cultivation is getting fragmented due to multiple pressures. Unlike the Indian industry
where growth could perhaps still be afforded through factor accumulation in some sub-sectors, agricultural
growth has to necessarily come from rapid productivity improvement and crop and regional diversification.
Though incremental productivity gains of the green revolution achieved in late 1960s and 1970s are waning
away, large yield-gaps varying from 60 to 100 per cent across regions and crops persist due to differences in
cultivation practices and input use. These productivity gains can be realised with existing varieties using best
practices in farm conditions and through local tenancy reforms. The extension of the green revolution to the
eastern and rain-fed regions and steps to transform national level food security into nutritional security at
household level has to be pursued to its logical end in the course of the current decade. Investment in
agricultural infrastructure has to go into power, water, rural roads, storage and cold chains for productivity
improvement in agriculture, its diversification and resilience to weather stress. These investments will also
help in deepening and broad-basing of activities in the rural economy and help in the intensification of pull-
factors in overcoming poverty. Some steps taken by the government in this context in the
past few years have already started yielding results, whether it is through increased production of rice in
Bihar, substantially improved wheat procurement in Madhya Pradesh, closing of the demand-supply gaps in
pulses or improved production of oilseeds. It attests to the potential of an agriculture diversification strategy in
delivering outcomes to meet multiple developmental objectives.
Concluding Remarks
These four pillars of the poverty alleviation strategy between them provide a policy framework for a time
bound eradication of poverty. Over the past decades elements that comprise this strategy have been seen to be
instrumental in making significant gains in overcoming poverty and deprivation in large parts of the country.
Success has been more visible in those states where besides tailoring the strategy to respond to the local
context, an ‘X-factor’ of sensitive governance and leadership involving the administrative machinery of the
programme, including the PRIs, as well as the civil society, have played a vital role. Ultimately agriculture
growth, while balancing the concerns for raising productivity with sustainability has to be the principle
instruments for addressing poverty in the chronically poor regions of the country.
The social protection floor in the urban areas has to be expanded with an employment generation programme
that focuses in equal measures on promoting self-employment through skill and asset augmentation measures,
and also provides a limited wage employment guarantee. The public wage employment programmes could
cover works devoted to urban waste management, urban horticulture and green cover, extension of urban
amenities, improvement of living conditions in slum, rehabilitation of slum dwellers and revitalization and
maintenance of urban water bodies. There is a specific role for the rights-based entitlement approach to social
protection, but this cannot be at the expense of fiscal responsibility and sustainability of the growth process in
the economy.
Class Notes
2
CHAPTER Practice Questions
PREVIOUS YEAR QUESTIONS FOR PRACTICE
Q.1 In a given year in India, official poverty (c) Gross State Product varies from State to
lines are higher in some States than in State
others because (2019) (d) quality of public distribution varies from
(a) poverty rates vary from State to State State to State
(b) price levels vary from State to State
MCQS ON THE TOPIC FOR PRACTICE
Q.1 Which of the following is/are used as an (c) 2 and 3 only

indicator in calculating Multidimensional (d) 1, 2, and 4 only
Poverty Index (MPI)?
1. maternal mortality Q.2 In India, the concepts of Minimum Heeds
2. nutrition and Directed Anti-poverty Programmes
3. access to electricity were the innovations of:
4. access to telephone (a) Fourth Five-year Plan
Select the correct answer using the codes (b) Fifth Five-year Plan
given below. (c) Sixth Five-year Plan
(a) 1, 2 and 3 only (d) Seventh Five-year Plan
(b) 1, 3 and 4 only
QUESTIONS FROM PREVIOUS YEARS’ UPSC MAIN EXAMINATIONS
Q1. Hunger and poverty are the biggest challenges for good governance in India still today. Evaluate
how far successive governments have progressed in dealing with these humongous problems.
Suggest measure for improvement (2017)
PRACTICE QUESTIONS
PRACTICE QUESTIONS
Q2. Poverty alleviation programmes in India remain mere showpieces until and unless they are
backed up by political will.” Discuss with reference to the performance of the major poverty
alleviation programmes in India (2017).
PRACTICE QUESTIONS
PRACTICE QUESTIONS
Q3. Though there have been several different estimates of poverty in India, all indicate reduction in
poverty over time. Do you agree? Critically examine with reference to urban and rural poverty
indicators (2015).
PRACTICE QUESTIONS
PRACTICE QUESTIONS
Q.4 Examine the effects of globalization on poverty removal in India (2006)
Q5. Evaluate the Panchayati Raj Systems in India from the point of view of eradication of poverty to
power to people? (2007)
Q6. “Globalization has brought about a distinct class divide in India instead of ushering in a
classless society.” Critically examine this argument. (2008)
Q7. “The conditions of the urban poor are more deplorable than that of their rural counterparts.”
Give your views. (2008)
Q8. Critically examine the differing estimates for (i) poverty figures, and (ii) GDP growth data for
April-June 2010, that have been in the news recently. In your view, what estimates are more
reflective of the ground reality, and why? (2010)
Q9. Comment critically on benefits and potential drawbacks of ‘cash transfers’ to ‘Below Poverty
Line’ (BPL) households. (2011)
Q10. The Self Help Group (SHG) Bank Linkage Program (SBLP), which is India’s own innovation,
has proved to be one of the most effective poverty alleviation and women empowerment
programme. Elucidate. (2015)
Q11. What is the incidence of poverty in India? How should poverty alleviation programmes be
constructed? (2000)
PRACTICE QUESTIONS FOR MAIN EXAMINATIONS
PRACTICE QUESTIONS
Q1. Why has the 'Poverty Line' methodology given by Planning Commission of India become
controversial? Is the criticism really justified? Examine critically.
Q2. Government has decided to adopt the Socio-economic caste based criteria developed on SECC-
2011 census data in identification of targeted beneficiaries under is various schemes. Critically
examine this transition with adequate justifications.
Q3. Explain 'the concept and the underlying rationale of 'Universal Basic Income' especially in the
context of addressing the poverty in India
Q4. Highlight the issues of Bhagwati-Sen controversy over tackling the poverty and slow growth in
India.
Q5. Discuss the various measures of poverty with policy implications for removal of poverty.
Explain why in spite of poverty alleviation schemes number of the poor has not fallen very
much.
Q6. How did per capita income in India behave since Independence? Has it improved the well-being
of the people uniformly? Give specific reasons.
Q7. Rural poverty continues to be a chronic problem in India, which cannot be taken care of by
anti-poverty programmes but by creation of permanent productive assets. Discuss.
Q8. Discuss the poverty trends - both rural and urban, between 1973- 74 and 2011- 12 particularly
in terms of pace of reduction and concentration and relate them with changes in growth rates
between the pre- and the post-liberalisation periods.
Q9. Analyze the benefits and potential drawbacks of ‘cash transfers’ to ‘Below Poverty Line’ (BPL)
households.
Q10. Poverty reduction programmes need to be reoriented for assets creation rather than creating
employment generation in rural areas. Comment.
Q11. Briefly explain the three-dimensional attack on poverty adopted by the government.
Q12. Recent trends show that poverty incidence in urban areas is higher than its rural counterpart in
more prosperous states. What factors, do you think, explain this?
RAU'S IAS
STUDY CIRCLE
Indian Economy and General Studies (Integrated)
Economic Development
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UPSC level Thematic contemporary issues important
after GSI Foundation Tests for Prelims
QIP + TEST SERIES DAILY NEWS

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based answer writing classes,
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including
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evaluation
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RAU'S IAS

INDIAN ECONOMY AND

2. Practice Questions 26-33

2. Need for measuring the extent of Poverty

3. Chronological Evolution of Poverty Lines in India

3.1.3 The Bombay Plan (1944)

4. Household member government employee.

5.3 Explanations for Poverty Trends up to 1999-2000

5.5 Regional Profile of the Poverty

Table 2.7: Poverty Incidence by Religious Group

5.8 Poverty Profile: Occupational Groups

crore farmars got the second tranche.

MCQS ON THE TOPIC FOR PRACTICE

Q.1 Which of the following is/are used as an (c) 2 and 3 only

QUESTIONS FROM PREVIOUS YEARS’ UPSC MAIN EXAMINATIONS

Q.4 Examine the effects of globalization on poverty removal in India (2006)

PRACTICE QUESTIONS FOR MAIN EXAMINATIONS

Blue Workbooks BLUE WORKBOOKS FOCUS

Primary study material MAGAZINE RAU’S HOUSE JOURNAL

ü WORK BOOK-3 PRELIMS P

ü WORK BOOK-4 COMPASS (C3) (C3)

PRELIMS TEST QIP PRELIMS

QIP + TEST SERIES DAILY NEWS

NEW DELHI CAMPUS BENGALURU CAMPUS JAIPUR CAMPUS

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