Poverty and Unemployment

1. What are the major problem of development of a country?

Two major problems that the developing countries of the world face are mass poverty and mass unemployment.

2. Define poverty?

Poverty has been defined in a number of ways. The World Bank (1990) has defined poverty as “the inability to attain a minimal standard of living”.

3. What are the types of poverty?

• Absolute poverty and
• Relative poverty

4. What is absolute poverty?

When people do not have adequate food, clothing and shelter, we say they are in absolute poverty.

5. What is relative poverty?

Relative poverty refers to differences in income among different classes of people or people within the same group or among people of different countries.

6. What is temporary poverty?

In countries like India, when there is poor rainfall, the crops fail and the farmers temporarily enter into a poverty sample. But when they are poor for long, then we call it chronic or structural poverty. For example, when agriculturists in many poor countries are dependent upon rain and when agriculture is marked by low productivity, we say farmers are in chronic poverty.

7. What is primary poverty?

Primary poverty refers to “families whose total earnings are insufficient to obtain the minimum necessities for the maintenance of merely physical efficiency”.

8. What is secondary poverty?

“Secondary poverty refers to a condition in which earnings would be sufficient for the maintenance for merely physical efficiency were it not that some portion of it is absorbed by other expenditure, either useful or wasteful such as drink, gambling and inefficient housekeeping.”

9. What is rural poverty?

A majority of the people in rural areas are poor because they do not own assets like land and they work as agricultural labourers; their wages are low and they get work only for a few months in a year.

10. What is urban poverty?

The urban poor, on the other hand, work for long hours but they get low incomes. They are employed mostly in the unorganized or informal sector

11. Who are sub employed?

Sub-employed are those

1) Who work part- time but want full – time work;

2) Family heads working full time who do not earn enough to bring their families over the poverty line and

3) Discouraged workers who no longer seek work.

12. What is the factor for extending poverty?

(1) The average level of national income and

(2) The degree of inequality in its distribution.

13. What is correlated with poverty?

In many countries, poverty is correlated with caste and race. The scheduled caste and tribal people in India and the Blacks in the USA are classic examples

14. What is poverty line?

Poverty Line refers to the minimum income, consumption, or, more generally access to goods and services below which individuals are considered to be poor. The poverty line is the expenditure level at which a minimum calorie intake and indispensable non-food purchases are assured.

15. How is poverty in India calculated?

Dandekar and Rath estimated the value of the diet with 2,250 calories as the desired minimum level of consumption.

While the Planning Commission accepted Rs.20/- per capita per month (i.e. Rs.240/- p.a.),

ccording to P.D.Ojha, the percentage of those below the poverty line in rural sector increased from 52 percent in 1960-61 to 70 percent in 1967- 68.

B.S.Minhas by taking per capita annual consumption expenditure of Rs.240/- as the barest minimum concluded that nearly half of the rural population (50.6 percent) was living below the poverty line in 1968.

P.K.Bardhan’s study concluded that the percentage of rural population below the poverty line increased from 38 percent in 1960-61 to 54 percent in 1968-69.

16. Which commission used the concept of augumented poverty line?

7^th finance commission

17. What are the causes of poverty?

• Unemployment and underemployment: Even during the year in which there are good rains, agricultural labourers do not get work throughout the year.
• Population pressures : Because of population pressure, there are many dependents per every earning member. And there is the problem of disguised unemployment. On a farm, there may be work for only four persons. But six or seven persons may be there on the farm. The marginal productivity of the extra persons is almost zero.
• Indian agriculture is marked by low productivity. So majority of those engaged in agriculture are poor.
• A majority of people in rural areas do not have enough assets, especially land. The main reason for this is the concentration of land in the hands of a few families. The regional variations in the incidence of poverty are also high. And migration of people from rural to urban areas is also one of the causes of urban poverty.

18. Discuss some poverty alleviation programmes?

• Land Reforms Land reforms legislation has been passed by the state governments, which aim at improving the economic conditions of agricultural landless labourers. For instance, with the abolition of the Zamindari system, the exploitation associated with the system has been removed. Tenancy Laws have been passed in most of the states for protecting the interests of the tenants and helping them to acquire possession over the lands they cultivate. Every state has passed the necessary legislation fixing ceiling on agricultural holdings by which the maximum amount of land which a person can hold has been fixed by law. The surplus lands thus acquired were to be distributed to the landless labourers and small peasants.
• Jawahar Gram Samridhi Yojana (JGSY) It was introduced inApril 1999 as a successor to Jawahar Rozgar Yojana on a cost sharing basis of 75 : 25 between the Union and States.
• National Social Assistance Programme (NSAP) It was launched onAugust 15, 1995 to provide social assistance benefits to poor households affected by old age, death of primary bread winner or need for maternity care.
• Employment Assurance Scheme (EAS) It was started on October 2, 1993 in 1778 backward blocks in drought prone, desert, tribal and hill areas. It was expanded to cover all the 5,488 rural blocks of the country. It gave wage employment to the rural poor. In September 2001, it was merged into new Sampoorna Gramin Rozgar Yojana along with Jawahar Gram Samridhi Yojana.
• Pradhan Mantri Gramodaya Yojana (PMGY) It was introduced in the Budget for 2000-2001 with an allocation of Rs. 5,000 crore. Its focus is on health, primary education, drinking water, housing and rural roads. Common Property Rights in grazing lands, wastelands, forests and water resources were made available to the rural people in the past. They have been cancelled in the recent past due to commercialisation and privatisation of these rural community resources in the country. 34
• Swarna Jayanti Shahari Rozgar Yojana (SJSRY) Urban self-employment and urban wage-employment are the two special schemes under it. It substituted in December 1997 various programmes operated earlier for urban poverty alleviation. It is funded on 75: 25 basis between the Union and the States. The expenditure under this scheme was only Rs. 45.5 crore at the revised stage. It was Rs. 39.21 crore in 2001-02 and an allocation of Rs. 105 crore was provided for 2002-03 (Economic Survey, 2002-03, p.217).
• Integrated Rural Development Programme (IRDP) The concept of an Integrated Rural Development Programme was first proposed in the central budget for 1976-77, and a beginning was made in this regard. This programme was intended to assist rural population to derive economic benefits from the development of assets of each area.

19. What is full employment?

Full employment refers to a situation in which all the workers who are capable of working and willing to work get an employment at reasonable wages. It does not imply that all adults have jobs.

20. What is unemployment?

Unemployment refers to a situation in which the workers who are capable of working and willing to work do not get employment.

21. What is the criteria for employed?

A person working 8 hours a day for 73 days of the year is regarded as employed on a standard person year basis.

22. How is unemployment estimated?

• Usual Principal Status unemployment: It is measured as number of persons who remained unemployed for a major part of the year. This measure is more appropriate to those in search of regular employment e.g., educated and skilled persons who may not accept casual work. This is also referred to as ‘open unemployment’. 35
• Weekly Status unemployment: It refers to the number of persons who did not find even an hour of work during the survey week.
• Daily Status unemployment: It refers to the number of persons who did not find work on a day or some days during the survey week.

23. What are causes of unemployment?

• High Population growth:
• Insufficient Rate of Economic Progress
• Absence of employment opportunities in activities other than agriculture
• Seasonal Employment
• Joint Family System
• Increasing turnout of students from Indian Universities
• Slow Developing of Industries

24. What are the measures to solve unemployment?

• A Change in the pattern of investment
• Encouragement to small enterprises as against big enterprises
• Problem of Choice of technique
• Encouragement of New Growth Centres in Small Towns and Rural Areas
• Subsidies on the Basis of Employment
• Reorientation of Educational Policy
• Underemployment in Rural Areas