G D GOENKA PUBLIC SCHOOL, JAMMU

(Governed by Om Prakash Bansal Charitable Trust Regd.)

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Subject: Economics CH-4- "POVERTY" Class - XII

Indicators of Poverty Sen Index

Vicious circle of poverty Poverty Line
Head Count Ratio Monthly Per Capita Expenditure (MPCE)
Trends in poverty in India, 1973-2012 National Food for Work Prog.- 2004
(later merged into MGNREGA)
Relative poverty Food for Work Prog., 1970
MGNREGA 2005
NCERT
INTRODUCTION
World's poor population, who lives in India More than 1/5th of world's poor lives in India
Indicators of Poverty Level of Income and consumption, social indicators, indicators of vulnerability to
risk and socio-political access.
Economists identify the poor on the basis of Occupation & Ownership of assets
their ______& ______
Who was the first one to discuss the concept Dadabhai Naroji
of Poverty line in Pre-independent period?
Criteria used to estimate Poverty Line (by He used the menu of a prisoner and used appropriate prevailing prices called ' Jail
Dadabhai Naroji) Cost of Living' to derive Poverty line
Formula used by him to calculate average (1/6)(Nil) + (1/6)(Half) + (2/3) (Full) = 3/4( of adult jail cost of living)
poverty line
Attempts (by Planning Commission in Post 1962, 'Study Group' was formed by Planning commission
Independence Period) to work out a 1979, "Task Force on Projections of minimum Needs and effective Consumption
mechanism to identify the number of poor demand" was formed.
in the country 1989 & 2005, "Expert Groups" were formed
Types of Poor Absolutely poor, very poor and poor
Types of Non-Poor Middle class, Upper middle class, Rich, Very rich and Absolutely rich
Chronic Poor = Always poor, Usually poor
Categorisation of Poverty Transient Poor = Churning poor, Occasionally poor
Non-Poor = Poor and never poor
On the basis of Consumption
Criteria used to construct Poverty Line (in Urban = 2100 cal a day Rural = 2400 cal a day
India) On the basis of Income
Urban= Rs.1000 per month Rural = Rs 816 per month
Criteria of Poverty Line used by World bank Income = $1.9 a day
Govt. uses MPCE as proxy for income of households to identify the poor.
(Economists criticised this criteria on the basis
Monthly Per Capita Expenditure  It includes all poor in same category
(MPCE)  It includes exp. on some selected food items as proxy for income
 It is difficult to identify poor people, who need help the most.
 Ignore social indicators like education, health, clean drinking water etc.
Sen Index Alternative method of poverty estimation given by Amartya Sen (a Nobel Laureate)
Other index of measuring poverty (by other Poverty Gap Index, Squared Poverty Gap
Economists)
Head Count Ratio When the number of poor is estimated as the proportion of people below the
poverty line.
Official data on Poverty is made available to NITI Aayog (Earlier, by Planning Commission)
Public by ________
Name the organisation who collects data of NSSO (National Sample Survey Organisation)
Poverty in India
In 1973-74 More than 320 million people (55%) were BPL
In 2011-12 Trends in It reduces to 270 million (22%) people
In 1973-74 Poverty Ratio More than 80% poor resides in rural areas
In 2011-12 No significant change.. Approx 75% population still resides in rural areas.
% of population BPL (2011-12) 22% (21.9%)
Large % of Poor in 1973-74 Tamil Nadu, UP, Bihar, Madhya Pradesh, West Bengal, Odisha
 State where poverty ratio is still high Odisha, Madhya Pradesh, Bihar and UP
States, which reduced the poverty level W. Bengal (by proper implementation of land reforms)and
better than other states Tamil Nadu (by successful implementation of PDS)
Punjab (through agricultural development)
Kerala (by investing in human resource)
Causes of poverty  Institutional factors (Low GDP, Lack of Infrastructure, lack of
demand, Lack of social welfare net)
 Social factors (Illiteracy, Unemployment, social exclusion,
inequality , indebtedness, Unequal distribution of wealth etc.)
 British rule
Effect of export of food grain by Britishers 26 million people died in famines between 1875- 1900
Causes of vulnerable condition of most Less employment opportunities because of lack of necessary knowledge and skill.
members of SCs and STs
Aggregate poverty Sum of individual poverty
How did the two scholars Shaheen Rafi Poverty is hunger, lack of health care facilities, lack of education, lack of job
Khan and Damian Killen envisage poverty? opportunities, future insecurity, powerlessness, lack of freedom.
POLICIES AND PROGRAMMES TOWARDS POVERTY ALLEVIATION
Primary objective of five year plan Social justice (along with rapid and balanced economic development
and equality)
3 dimensional approach of govt. for poverty  Growth oriented approach
reduction  Specific poverty alleviation programmes approach
 Meeting the minimum needs of poor
 Growth oriented approach Obj. was to increase GDP and PCY
(emphasised in plans but PCY increases at a very slow rate because of rise in
(During First and Second five year plan) population and Green revolution increased disparities, industrial development was
not significant)
 Specific poverty alleviation 1970 = Food for Work Prog
programmes approach Self -Employment Prog = Rural Employment Generation Prog.(REGP),
Prime Minister's Rozgar Yojna (PMRY),
(During Third five year plan) Swarna Jayanti Shahari Rozgar Yojna(SJSRY)
Wage -Employment Prog= MGNREGA 2005,
Earlier, financial assistance was given to the individuals.
Change in the approach of govt. in self- Now govt. is encouraging them to form SHGs and save money and lend among
employment prog since 1990 themselves. Later, through banks, the govt. provides partial financial assistance to
them.
Swaranjyanti Gram Swarozgar Yojna (SGSY) is one such prog, now restructured as
National Rural Livelihood Mission (NRLM)
Employment Generation by MGNREGA Nearly to 5 crore households in 2013-14
2005
 Minimum Needs Programme It includes public expenditure on =
(From Fifth five year plan) Provision of food grains at subsidised rates, Education, Health,
Water supply and Sanitation etc.
(which could improve standard of living of people)
Three major prog. that aims at improving 1. Public Distribution System (PDS)
the food and nutritional status of poor 2. Integrated Child Development Scheme
3. Midday Meal Scheme
Programmes for the development of * Pradhan Mantri Gram Sadak Yojna
infrastructure and housing conditions * Pradhan Mantri Gramodaya Yojna
* Valmiki Ambedkar Awas Yojna
Programme for elderly people who do not National Social Assistance Programme (NSAP)
have any care-taker, poor women who are (15th Aug. 1995)
widows and destitute
Schemes to provide health insurance to Pradhan Mantri Jan- Dhan Yojna
poor people (beside developing saving habits among poor, the scheme intends to transfer all
benefits of govt. schemes and subsidies to poor.
Account holders are entitled to Rs. 1 lakh accident insurance and Rs. 30,000 life
insurance cover.
Many farmers has reported to have
committed suicides in Andhra Pradesh and *Shift from traditional to commercial farming
Maharashtra. Why? *Decline in govt. investment in agri. sector
* Competition with large Global firms.
*Crop failure, pest attack and drought
* Debt at high rate of interest etc.
POVERTY ALLEVIATION PROGRAMMES - CRITICAL ASSESSMENT
 Percentage of absolute poor in some states is now below the national average.
 Despite many strategies adopted by govt. for poverty alleviation, hunger, malnourishment, illiteracy, lack of basic amenities is
still a common feature in many states.
 No radical transformation
 Govt. policies are not helpful for people living on or just above poverty line.
Assessment by various scholars - 3 areas of concern
 Unequal distribution of land and other assets
 These programmes depend mainly on govt. and bank officials for their implementation . These officials
are ill-motivated, inadequately trained, corruption prone.
 Wastage and inefficient use of resources.
Short Answer Type Ques ( 1mark)
1. NRLM stands for
a)National Rural Livelihood mission b)National Rural Livelihood movement
c)National road livelihood mission d)Nation Rural Livelihood Mission
2. National Rural Employment Guarantee schemes became operative from
a)2003 b)2004 c)2005 d) 2006
3. The gap between large and small farmers was widened by
a)Green Revolution b)White Revolution c) Operation flood d)Industrial Revolution
4. An example of self employment programme is
a) PDS b)Integrated Child Dev. scheme c)Mid day meal d)Rural employment generation prog
5. Self-help groups get money through the prog named
a)Prime minister Rozgar Yojna b)Gram Samridhi Yojna
c)Sampoorna Grameen Rojgar Yojna d)Sawaran Jayanti Gram Swarozgar Yojna
6. Min. calorie intake required for measuring poverty in urban areas is
a) 2100 cal b)2200 cal c)2300 cal d)2400cal
7. An example of Chronic poor is
a)Seasonal workers b) Casual workers c)Small farmers d) self employed people
8. Pradhanmantari Gramodaya Yojna was launched
a)For the promotion of Education b)For the promotion of health facilities
c)To provide financial assistance to educated unemployed d)to provide assistance to producers
9. Sum of individual poverty is known as
a) General poverty b)Absolute poverty c)Relative poverty d) Aggregate poverty
10. The poverty line does not consider
a) Income b)Assets c)Illiteracy c) Calorie intake
11. _______________ is about removing the obstacles to the things that a person can do in life, such as illiteracy ,
Ill health, lack of access to resources or lack of civil and political freedom. (Ans. Development)
12. Official data on poverty is made available to the public by the ____________. (Ans. NITI Aayog)
13. Those who regularly move in and out of poverty like small farmers are known as
a) Chronic poor b) Churning poor c) Occasionally poor d)Major poor
14. UWSP (Urban Women Self -Emp. Prog.) and USEP (Urban self-Emp. Prog.) are the 2 components of which yojana?
a) Valmiki Ambedkar Awas Yojana b) Indira Awas Yojana
c) Antodaya Ann Yojana d) Swarna Jayanti Shahri Rozgar Yojana
15. 5 states account for 70% of India’s poor which of the following are not one of them,
a) Bihar b) Andhra Pradesh c) Uttar Pradesh d)Kerala
16. Valmiki Ambedkar Awas Yojana was launched in the year,
a) 2001 b) 1999 c) 2005 d)2011
17. By which year the government was aiming to meet the Millennium Development Goals including the rate of global poverty?
a) 2017 b) 2013 c) 2015 d) 2009
18. Under the food for work programme, the wages to the workers can be paid in,
a) In the form of food b) In the form of cash
c)Neither cash nor food d) Partly in cash and partly in food
19. Which of the following state reduced its people below poverty line to 17% during 1973-2010?
a) Bihar b) West Bengal c) Uttar Pradesh d) Tamil Nadu
20. Which programme is restructured as 'National Rural Livelihood Mission'?
a) National Food for work Prog b) Swaranjayanti Gram swarozgar Yojna
c) Rural Employment Generation Prog. d) Prime Minister's Rozgar Yojna
 LONG ANSWER TYPE QUES -
NCERT
1.Suppose you are from a poor family and you wish to get help from the govt. to set up a petty shop. Under which scheme will you
apply for assistance and why?
(Hint: Under Rural Employment Generation Programme (REGP).Under this prog. one can get financial assistance in the form of
bank loan to set up a shop)

2.The following table shows the average monthly expenditure per person on items of consumption in India and Delhi slums in terms
of percentage. ‘Rice and wheat’ in rural areas at 25 per cent means that for every 100 rupees spent, Rs 25 goes towards the
purchase of rice and wheat alone. Read the table further and answer the questions that follow.


 i) Compare the percentage of expenditure on food items among different groups and their priorities.
 ii)Do you think households in slums are depending more on cereals and pulses?
 iii)On which item do people living in different areas spend the least? Compare them.
 iv)Do you think that slum dwellers have given more emphasis to meat, fish and eggs?

OTHER IMP. QUES.

1. Why majority of population still resides in rural areas in India?
2. "Though India has considerably increased its saving and investment rate since independence, yet this is not adequate enough to
give such a high rate of growth that is needed to eradicate poverty." What can be done to solve this problem?
(Hint: Increase in investment , population control, create more employment opportunities etc.)
3. Analyse the diagram.

4. "Poverty in India has taken deep roots due to two major factors i.e. low level of economic development and wide inequalities in
income distribution and asset ownership." Added to these two , mention the third important factor that has perpetuated poverty in
India and how? (Hint: Rising Population.)