Class 11 Economics Notes Chapter 4 (Poverty) – Indian Econimoc Development Book

Alright class, let's delve into Chapter 4: Poverty, from your 'Indian Economic Development' textbook. This is a crucial chapter, not just for your Class 11 understanding, but also frequently tested in various government exams. Pay close attention as we break down the concepts.

Chapter 4: Poverty - Detailed Notes for Government Exam Preparation

1. What is Poverty?

• Definition: Poverty is a state or condition in which a person or community lacks the financial resources and essentials for a minimum standard of living. It signifies the inability to fulfill basic needs like food, clothing, shelter, education, and healthcare.
• Types of Poverty:
  • Absolute Poverty: Measured based on a minimum subsistence level (poverty line). Individuals below this line are considered absolutely poor. This is the primary measure used in India.
  • Relative Poverty: Measured in comparison to the living standards of others within the same society. It highlights inequality. For example, the bottom 20% of income earners might be considered relatively poor, even if they are above the absolute poverty line.

2. Identifying the Poor:

• Characteristics:
  • Occupation: Primarily landless agricultural labourers, small/marginal farmers, casual labourers (both rural and urban), self-employed in precarious jobs (e.g., street vendors).
  • Assets: Lack of productive assets (land, cattle, machinery). Dwellings are often kutcha (made of mud, thatch).
  • Location: Concentrated more in rural areas, although urban poverty (slums, squatter settlements) is also significant. Regional disparities exist (e.g., higher poverty in states like Odisha, Bihar, MP, UP).
  • Social Groups: Disproportionately affects Scheduled Castes (SCs) and Scheduled Tribes (STs).
  • Household Size & Dependency: Often larger families with a higher dependency ratio (more non-earning members).
  • Health & Education: Suffer from malnutrition, poor health, limited access to education and skills.
  • Indebtedness: Often trapped in cycles of debt, borrowing from informal sources at high interest rates.

3. Measuring Poverty: The Poverty Line

• Concept: A cut-off point (usually in terms of per capita expenditure or income) that divides the population into poor and non-poor.
• Basis in India (Historically):
  • Primarily based on minimum calorie intake: 2400 kcal per person per day for rural areas and 2100 kcal for urban areas (higher rural requirement due to more physical labour).
  • Monetary Value: These calorie norms are converted into monetary value (per capita consumption expenditure) based on prevailing prices of essential goods (food and non-food items). This monetary value is the poverty line.
• Determination: Periodically estimated by the National Sample Survey Office (NSSO), now National Statistical Office (NSO), through consumption expenditure surveys. Planning Commission (now NITI Aayog) used this data to fix the line.
• Committees: Various expert groups/committees (e.g., Lakdawala, Tendulkar, Rangarajan) have revised the methodology over time, leading to different poverty estimates. (Note: While NCERT focuses on the basic concept, be aware of these committees for competitive exams).
• Limitations of Poverty Line:
  • Focuses only on basic consumption, ignoring other dimensions like health, education, sanitation, social discrimination.
  • Groups all the poor together, not differentiating between levels of poverty (e.g., very poor vs. marginally poor).
  • Norms (calorie/expenditure) can be arbitrary and may not reflect current needs or price variations accurately.

4. Causes of Poverty in India:

• Historical Factor: Colonial exploitation under British rule systematically destroyed Indian industries and agriculture, leading to widespread poverty.
• Population Growth: High population growth rate increased the dependency burden and diluted the benefits of economic growth.
• Low Agricultural Productivity: Dependence on monsoons, lack of modern farming techniques, fragmented landholdings kept agricultural output and income low for a large section.
• Unemployment and Underemployment: Lack of sufficient employment opportunities in both industrial and service sectors. Disguised unemployment is rampant in agriculture.
• Unequal Distribution of Income and Assets: Land ownership and other assets are highly skewed, concentrating wealth in fewer hands. The benefits of growth haven't trickled down effectively.
• Social Factors: Caste system, gender discrimination, lack of access to quality education and healthcare perpetuate poverty across generations for certain groups.
• Inflation: Persistent rise in prices, especially of essential commodities, erodes the purchasing power of the poor.
• Indebtedness: Lack of access to institutional credit forces the poor to borrow from moneylenders at exorbitant rates, leading to debt traps.
• Inadequate Infrastructure: Poor infrastructure (roads, electricity, irrigation) hampers economic activity, especially in rural areas.

5. Government Approach to Poverty Alleviation:

India's approach has broadly followed three dimensions:

• (i) Growth-Oriented Approach: Based on the expectation that the benefits of economic growth (increase in GDP and per capita income) would trickle down to the poor. While growth occurred, its benefits were unevenly distributed.
• (ii) Specific Poverty Alleviation Programmes (PAPs): Recognizing that growth alone wasn't sufficient, specific programmes were launched targeting the poor directly. These aimed at creating assets and employment opportunities.
  • Self-Employment Programmes:
    • Rural Employment Generation Programme (REGP)
    • Prime Minister’s Rozgar Yojana (PMRY)
    • Swarna Jayanti Shahari Rozgar Yojana (SJSRY) - Urban
    • Swarnajayanti Gram Swarozgar Yojana (SGSY) - Rural (Later restructured into National Rural Livelihoods Mission - NRLM/Aajeevika)
  • Wage Employment Programmes:
    • National Food for Work Programme (NFWP)
    • Sampoorna Grameen Rozgar Yojana (SGRY)
    • Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), 2005: This is a landmark Act.
      • Guarantees 100 days of wage employment in a financial year to every rural household whose adult members volunteer to do unskilled manual work.
      • Aims to enhance livelihood security, create durable assets, empower rural communities, especially women.
• (iii) Providing Minimum Basic Amenities: Aimed at improving the quality of life through public expenditure on social consumption needs.
  • Public Distribution System (PDS), Targeted PDS (TPDS), Antyodaya Anna Yojana (AAY), Annapurna Scheme (for senior citizens).
  • National Social Assistance Programme (NSAP) - provides pensions for elderly, widows, disabled poor.
  • Pradhan Mantri Gramodaya Yojana (PMGY), Valmiki Ambedkar Awas Yojana (VAMBAY).
  • Programmes focusing on health, education, sanitation (e.g., Swachh Bharat Mission).

6. Critical Assessment of Poverty Alleviation Programmes (PAPs):

• Successes: Poverty levels have declined over time. Some programmes (like MGNREGA, PDS) have provided crucial support. Increased focus on basic amenities.
• Limitations:
  • Implementation Issues: Poor delivery mechanisms, leakages, corruption.
  • Targeting: Difficulty in identifying the truly needy, leading to inclusion (non-poor benefiting) and exclusion (poor left out) errors.
  • Resource Allocation: Amount allocated often inadequate compared to the magnitude of poverty.
  • Lack of Asset Creation: Some programmes created low-quality, unsustainable assets.
  • Lack of Active Participation: Limited involvement of the poor themselves in planning and implementation.
  • Overlapping Schemes: Multiple programmes with similar objectives led to confusion and inefficiency.
  • Structural Barriers: Programmes often failed to address deep-rooted social and economic structures (like land inequality, caste discrimination) that perpetuate poverty.

Conclusion:

While India has made progress in reducing absolute poverty, it remains a significant challenge. Eradicating poverty requires sustained high economic growth, better distribution of income, effective implementation of targeted programmes, empowerment of the poor, and addressing social inequalities.

Multiple Choice Questions (MCQs):

1. The poverty line in India is primarily based on:
   a) Per capita income level
   b) Minimum calorie intake requirement and its monetary equivalent
   c) Housing standards and access to sanitation
   d) Ownership of durable goods

2. Which type of poverty is measured by comparing an individual's standard of living with the rest of society?
   a) Absolute Poverty
   b) Relative Poverty
   c) Cyclical Poverty
   d) Structural Poverty

3. Which of the following is NOT considered a major cause of poverty in India according to the chapter?
   a) High population growth
   b) Colonial exploitation
   c) Unequal distribution of assets
   d) Excessive government subsidies

4. MGNREGA (Mahatma Gandhi National Rural Employment Guarantee Act) guarantees:
   a) 100 days of skilled labour employment to every individual.
   b) 100 days of unskilled manual work to every rural household volunteering for it.
   c) Free food grains to all rural households below the poverty line.
   d) Financial assistance for setting up small businesses in rural areas.

5. The 'trickle-down' theory is associated with which approach to poverty alleviation?
   a) Providing Minimum Basic Amenities
   b) Specific Poverty Alleviation Programmes
   c) Growth-Oriented Approach
   d) Social Security Measures

6. Which organization in India is primarily responsible for collecting data on poverty based on consumption expenditure surveys?
   a) Reserve Bank of India (RBI)
   b) NITI Aayog
   c) National Statistical Office (NSO)
   d) Ministry of Finance

7. The Antyodaya Anna Yojana (AAY) targets:
   a) All BPL families
   b) Senior citizens above 65 years
   c) The poorest among the BPL families
   d) Unemployed youth in urban areas

8. Which of the following is a common criticism of Poverty Alleviation Programmes in India?
   a) Excessive focus on urban poverty
   b) Lack of political will
   c) Poor targeting and leakages
   d) Over-reliance on foreign aid

9. Historically, the calorie intake norm for determining the poverty line was set higher for rural areas compared to urban areas because:
   a) Rural food prices were higher.
   b) Rural people generally engage in more physical labour.
   c) Urban people have better access to nutritious food.
   d) Rural populations are larger.

10. Which factor is considered a social cause of poverty in India?
    a) Inflation
    b) Low agricultural productivity
    c) Caste system and discrimination
    d) High population growth

Answer Key:

1. b
2. b
3. d
4. b
5. c
6. c
7. c
8. c
9. b
10. c

Study these notes thoroughly. Remember, understanding the concepts, causes, and government initiatives related to poverty is essential for your exams. Good luck!