Economy · X-Factor Notes
Poverty and Unemployment revision notes for UPPCS Prelims.
High-Yield Revision| Concept | What to remember | Asked in UPPCS |
|---|---|---|
| Absolute Poverty (International) | Defined by the UN in 1995 as a condition characterized by severe deprivation of basic human needs (food, water, sanitation, health, shelter, education, information), depending not only on income but also on access to services. | UPPCS (Pre) 2017 |
| Poverty Line Determination (India) | The basis for determining the poverty line in India is Consumption data (household consumption expenditure). Income data is generally not the basis. Literacy is specifically noted as a method not used to decide the poverty line. | U.P. U.D.A./L.D.A. (Spl.) (Mains) 2010, U.P. Lower Sub. (Pre) 2013, U.P.R.O./A.R.O. (Mains) 2013, U.P. P.C.S. (Pre) 2009 |
| Poverty Estimation Methodology | The current estimation methodology relies on large sample surveys on household consumer expenditure conducted by the NSSO (now NSO). Methods used include Head Count Ratio (HCR), Calorie Intake, and Household Consumption Expenditure. | U.P. P.C.S. (Pre) 2020 |
| Nodal Agency for Poverty Estimation | The Planning Commission was the nodal agency for determining the poverty line. Currently, NITI Aayog performs this role, having replaced the Planning Commission since January 1, 2015. | UPPCS (Pre) 2018, UPPCS (Pre) 2014 |
| Key Poverty Committees | U.P. P.C.S. (Pre) 2020, U.P. U.D.A./L.D.A. (Pre) 2013, U.P. Lower Sub. (Pre) 2013 | |
| Alagh Committee (Task Force) (1977/1979) | Constructed a poverty line based exclusively on nutritional requirements. Determined minimum consumption expenditure based on daily calorie requirements: 2400 kcal (Rural) and 2100 kcal (Urban). 27.5 BPL population | |
| Lakdawala Committee (1989/1993) | It introduced the use of state-specific poverty lines updated through Consumer Price Indices: CPI for Industrial Labourers (CPI-IW) for urban areas and CPI for Agricultural Labourers (CPI-AL) for rural areas. It determined the poverty line based on household per capita consumption expenditure that sustains minimum calorie intake—2400 calories in rural areas and 2100 calories in urban areas. 37.2% BPL population. | |
| Tendulkar Committee (Expert Group) (2005/2009) | Constituted to establish new standards for the estimation of population living below the poverty line. Recommended shifting away from historical calorie norms towards target nutritional outcomes. Suggested a uniform all-India Poverty Line Basket (PLB) across rural and urban areas. Recommended using Mixed Reference Period (MRP) estimates. Estimated the poverty line for 2011-12 as ₹ 816 per capita per month for rural areas (approx. ₹ 26/day) and ₹ 1000 per capita per month for urban areas (approx. ₹ 32/day). 21.9 % BPL population. | |
| Hashim Committee (Expert Group) (2010/2012) | Constituted for the identification of BPL (Below Poverty Line) households in Urban Areas. Methodology was based on a threefold criteria: residential, social, and occupational vulnerabilities. | |
| Rangarajan Committee (Expert Group to Review the Methodology for Estimation of Poverty) (2012/2014) | Set up due to widespread criticism of the Tendulkar Committee approach. Recommended separate consumption baskets for rural and urban areas, incorporating food items (to ensure recommended calorie, protein, and fat intake) and non-food items (like health, education, transport). Raised the poverty line expenditure (at 2011-12 prices) to ₹ 32 per day (rural) and ₹ 47 per day (urban). Monthly per capita consumption expenditure recommended was ₹ 972 in rural areas and ₹ 1407 in urban areas. | |
| Multidimensional Poverty Index (MPI) (2010) | MPI is composed of three dimensions: Health, Education, and Living Standard. It is considered the most suitable index to assess the intensity of poverty in developing countries like India. The MPI was developed in 2010 by the Oxford Poverty and Human Development Initiative (OPHI) with UNDP support. (Sabina Alkire and James Foster). | UPPCS (Pre) 2019, U.P. Lower Sub. (Pre) 2015 |
| Vicious Circle of Poverty | This concept was described by economist Prof. Ragnar Nurkse (in his 1953 book). It argues that underdeveloped countries are poor because they are trapped in a cycle where low productivity leads to small savings, discouraging investment. | UPPCS (Pre) 2014 |
| Types of Poor | Cyclic poor are those who mostly remain non-poor but sometimes become poor, often due to temporary job loss or economic recession/depression. | |
| Poverty Eradication Methods | Methods to eradicate poverty include: More investment in productive activities, Increased savings (leading to higher capital formation), and Population control. |
| Concept | What to remember | Asked in UPPCS |
|---|---|---|
| Poverty Line (Tendulkar Methodology) | As per 2011-12 estimates (released July 2013), the poverty line was set at Rs. 1000 per capita per month (Rs. 32/day) for Urban areas and Rs. 816 per capita per month (Rs. 26/day) for Rural areas. | U.P. U.D.A./L.D.A. (Pre) 2013 |
| Poverty Ratio (HCR) 2004-05 | According to the Tendulkar Committee, the percentage of the population below the poverty line (HCR) in India was 37.2 percent in 2004-05. | U.P. P.C.S. (Pre) 2012, U.P. U.D.A./L.D.A. (Pre) 2013 |
| Concept | What to remember | Asked in UPPCS |
|---|---|---|
| Disguised Unemployment | Generally means the marginal productivity of labour is zero. It is the main characteristic of the Agricultural sector and is largely related to Rural Areas in India. | |
| Usual Status Unemployment | Refers to the number of persons who remained unemployed for a major part of the year (using a reference period of 365 days). This captures long-term open unemployment. | UPPCS (Pre) 2019, UPPCS (Mains) 2005 |
| Concept | What to remember | Asked in UPPCS |
|---|---|---|
| Integrated Rural Development Programme (IRDP) (1980) | Launched nationwide from October 2, 1980. Its main aim was to provide employment to households living below the poverty line in rural areas by providing income-generating assets and access to credit. | |
| Jawahar Rozgar Yojana (JRY) | Launched on April 1, 1989 (during the Seventh Five Year Plan). Objectives included providing employment to youth/unemployed in rural areas and strengthening rural infrastructure; 30% of employment generated was reserved for women in rural areas. |
| Concept | What to remember | Asked in UPPCS |
|---|---|---|
| Chronological Order of Development Measures | The correct sequence of measures introduced is: Per-Capita Income (PCI), Physical Quality of Life Index (PQLI), Human Development Index (HDI). | |
| PQLI (Physical Quality of Life Index) | Developed by Morris David Morris in the mid-1970s. PQLI attempts to measure the quality of life or well-being of a country. |
| Concept | What to remember | Asked in UPPCS |
|---|---|---|
| HDI Components | HDI is a composite index of three dimensions: Life Expectancy, Educational Attainment (Mean years/expected years of schooling), and Standard of Living (measured by per capita GDP/GNI per capita PPP dollars). | |
| HDI Excluded Components | Social Inequality and specific detailed measures like Health and Nutrition (as an aggregate index) and Gross Enrollment Rate |
| Concept | What to remember | Asked in UPPCS |
|---|---|---|
| India HDI Rank (2025 Report) | India ranks 130th among 193 countries. HDI value increased from 0.676 in 2022 to 0.685 in 2023 | |
| First State HDR | Madhya Pradesh was the first Indian State to have its Human Development Report prepared and released (in 1995). | |
| Highest HDI State (India) |
| Poverty Ratio (HCR) 2011-12 |
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| According to the Planning Commission (using Tendulkar methodology), the poverty rate in India in 2011-12 declined to 21.9 percent. |
| U.P. U.D.A./L.D.A. (Pre) 2013 |
| Highest Poverty Concentration (2011-12) | The state with the highest poverty percentage (HCR) was Chhattisgarh (39.93%). The state with the highest total number of poor people was Uttar Pradesh (598.19 lakh). | UPPCS (Pre) 2014, UPPCS (Mains) 2009 |
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| Highest Poverty Ratio (1993-94) | For Bihar, the Planning Commission estimated the BPL percentage to be about 55% in 1993-94. The highest ratio in 1999-2000 was in Odisha (47.1%). | U.P.U.D.A./L.D.A. (Pre) 2002, UPPCS (Pre) 2003, 2005 |
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| Minimum Poverty Ratio (2011-12) | States/UTs with minimum poverty ratio included Goa (5.09%), Kerala (7.05%), and Himachal Pradesh (8.06%). | UPPCS (Mains) 2011, U.P.P.C.S (Pre) 2010 |
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| "Ethiopia of India" | Madhya Pradesh is sometimes called the "Ethiopia of India" due to excessive infantile mortality and malnutrition. | UPPCS (Mains) 2010, U.P.P.C.S (Pre) 2011 |
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| Eleventh Five Year Plan Target | The Eleventh Plan aimed to reduce the poverty ratio (HCR) by 10 percentage points by the year 2012. | U.P. U.D.A./L.D.A. (Pre) 2013 |
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| Measurement Agencies/Methods |
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| The NSSO (National Sample Survey Organisation, now NSO) collects and publishes the unemployment index in India. Methods used include Usual Status, Current Weekly Status (CWS), and Current Daily Status (CDS); the Current Monthly Status is not used. |
| U.P. P.C.S. (Mains) 2014, UPPCS (Mains) 2005, 2016 |
| Unemployment/Poverty Link | The unemployment problem leads to poverty because the number of people living below the poverty line increases (lack of income generation). |
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| Urban Poverty Roots | Roots of urban poverty lie in rural areas. This is because the level of education is normally low in rural areas, leading migrants to take up poor jobs and exacerbate urban deprivation. | U.P. R.O./A.R.O. (Mains) 2013, UPPCS (Mains) 2010 |
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| Educated Unemployment | Kerala is noted as the Indian state with the maximum percentage of educated unemployed persons. |
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| Causes of Unemployment | Rapid growth of population, Lack of skill, and Lack of manpower planning are responsible for persistent unemployment. Growth of per capita income is not responsible. | UPPCS (Mains) 2014 |
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| Swarnajayanti Gram Swarozgar Yojana (SGSY) (1999) | Started in 1999 (April 1). It was a major anti-poverty scheme launched by restructuring six existing schemes: IRDP, TRYSEM, DWCRA, MWS, SITRA, and GKY. It emphasized mobilization of rural poor into Self Help Groups (SHGs) and improving skills. | UPPCS (Pre) 2002, UPPCS (Mains) 2006 |
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| National Rural Livelihood Mission (NRLM) (2011) | Launched in June, 2011, restructuring the SGSY. Seeks to improve livelihood options by strengthening 'self-help groups' and providing skill development. | U.P. Lower Sub. (Pre) 2015 |
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| Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) (2005) | Guarantees employment for 100 days during one year. Renamed MNREGA on October 2, 2009. Positive results include increased purchasing power and reduction in migration to cities. | UPPCS (Mains) 2005, UPPCS (Spl.) (Mains) 2008, UPPCS (Pre) 2015 |
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| Employment Assurance Scheme (EAS) (1993) | Launched on October 2, 1993. Envisaged providing employment guarantee to one man and one woman in a rural family living below the poverty line (a maximum of two adults per family). |
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| Unorganised Workers’ Social Security Act | Passed by Parliament in 2008. | UPPCS (Pre) 2015, UPPCS (Pre) 2012 |
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| National Social Security Fund (NSSF) (2011) | Constituted in 2011 for providing social security to workers in the unorganized sector. It is not an Employment Generation and Poverty Alleviation Programme itself (unlike MGNREGA, NRLM, SJSRY). | U.P. P.C.S. (Mains) 2014 |
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| Minimum Needs Programme | Included in the Fifth Five Year Plan. The concept is synonymous with the Investment in human approach. It aims at reducing inequalities, but is not achieved through liberalization of the economy. | UPPCS (Mains) (Spl.) 2004, UPPCS (Mains) 2006, UPPCS (Pre) 2009 |
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| Self-Help Groups (SHGs) | Md. Yunus (founder of Grameen Bank) pioneered the concept of SHGs and microfinance as an effective tool for poverty alleviation. |
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| UPPCS (Pre) 2019 |
| PQLI Components | The most suitable estimate of the physical quality of life comprises: Infant Mortality Rate and Literacy. The full index value is the average of basic literacy rate, infant mortality, and life expectancy at age one. | UPPCS (Spl.) (Mains) 2004 |
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| Amartya Sen's Approach | Associated with the Capability Approach. He suggested that planning in India should focus more attention to the people than to commodities (i.e., should be people-oriented). | U.P. Lower Sub. (Spl.) (Pre) 2004, UPPCS (Pre) 1999 |
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| HDI Development and Launch | The HDI was developed by economist Mahbub-ul-Haq. It is anchored in Amartya Sen's work on human capabilities. The first Human Development Report (HDR) was introduced in 1990. | UPPCS (Mains) 2006, UPPCS (Pre) 2018 |
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| HDI Publisher | The Human Development Report (HDR) is published by the United Nations Development Programme (UNDP). UNDP was the first to concentrate on the human aspect of development. |
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| HDI Focus Shift | The HDI had the explicit purpose to shift the focus of development economics from national income accounting to people-centered policies. | U.P. U.D.A./L.D.A. (Pre) 2013 |
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| Gross National Happiness (GNH) | Bhutan adopted GNH as an index of the well-being of its citizens in 1972 | UPPCS (Mains) 2009 |
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| U.P. P.C.S. (Pre) 2020, UPPCS (Spl.) (Mains) 2008, UPPCS (Mains) 2009 |
| Improving India's HDI | India’s rank in the HDI would improve if there is increased adult literacy and more children going to school (boosting the education component). | UPPCS (Mains) 2004 |
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| HPI (Human Poverty Index) Introduction | The HPI concept was introduced in the Human Development Report of the year 1997. | U.P.P.S.C. (GIC) 2010, UPPCS (Spl.) (Mains) 2004 |
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| MPI (Multidimensional Poverty Index) Adoption | MPI replaced the HPI in the Human Development Report of the year 2010. | UPPCS (Mains) 2010, U.P. P.C.S. (Pre) 2020 |
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| MPI Dimensions and Focus | MPI uses dimensions of Health, Education, and Living Standard. It covers deprivation in these areas at the household level. | UPPCS (Pre) 2019 |
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| HDI and SDG Relationship | There is a ** positive relationship** between the HDI and Sustainable Development Goals (SDG) ranking of Indian States, because the underlying dimensions of SDG targets are closely related to the health and education aspects measured by HDI. | UPPCS (Pre) 2019, UPPSC Pre-2024 |
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| U.P. Lower Sub. (Pre) 2008, UPPCS (Mains) 2005, U.P.P.C.S (Pre) 2011 |
| Indian HDR Exclusions | The Indian Human Development Report does not include an Unemployment Related Index for each sample village. |
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| UP HDI Ranking (2023 Data) | 34th rank HDI value is approximately 0.609. Bihar: 0.577 Jharkhand: 0.600 | U.P. U.D.A./L.D.A. (Pre) 2013 |
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