Poverty, Unemployment and Inequality in India: Poverty Line Committees, Types of Unemployment, MPI and Schemes for SSC

Poverty, unemployment and inequality are the main development challenges of India. SSC economy asks about the committees on the poverty line, the types of unemployment, the surveys and the anti-poverty programmes. This guide on poverty, unemployment and inequality in India for SSC covers all of these in tables, with practice questions and FAQs.

Poverty: Basic Concepts

Committees on the Poverty Line

Multidimensional Poverty Index (MPI)

• The global MPI is published by the UNDP and the Oxford Poverty and Human Development Initiative (OPHI); it measures poverty on health, education and standard of living.
• NITI Aayog released India’s National MPI (2021, 2023) using three dimensions and 12 indicators; according to the 2023 report, the multidimensional poverty in India fell from 24.85% in 2015–16 to 14.96% in 2019–21.
• The states with the lowest poverty according to the NITI report include Kerala, Goa and Sikkim; the highest were Bihar, Jharkhand and Uttar Pradesh.

Types of Unemployment

• Disguised and seasonal unemployment are the main types in rural India; educated unemployment is common in urban areas.
• The Periodic Labour Force Survey (PLFS), started in 2017–18 by the National Statistical Office, gives the labour force participation rate and the unemployment rate.
• Unemployment is measured on the usual status (principal and subsidiary), current weekly status and current daily status basis.

Inequality Measures

Anti-Poverty and Employment Programmes

Tricks to Remember

• Tendulkar = 2009 = 21.9% (2011–12); Rangarajan = 2014 = 29.5%.
• Alagh = calorie norms (2,400 rural and 2,100 urban).
• Disguised unemployment = zero marginal productivity.
• Gini 0 = equality; Gini 1 = full inequality.
• MGNREGA = 100 days; 2005.

Quick Tips

• Learn each poverty committee with one fact.
• Remember the types of unemployment with examples.
• Remember that disguised unemployment has zero marginal productivity.
• Remember the range of the Gini coefficient.

Quick Revision Points

• Tendulkar Committee: 2009; Rangarajan Committee: 2014.
• Disguised unemployment is the main type in agriculture.
• PLFS is released by the NSO.
• Gini coefficient lies between 0 and 1.
• MGNREGA was launched in 2005.

Practice Questions With Answers

1. Which committee estimated the poverty ratio at 21.9% for 2011–12?
   Answer: Tendulkar Committee
2. Which type of unemployment has zero marginal productivity?
   Answer: Disguised unemployment
3. What does a Gini coefficient of 0 mean?
   Answer: Perfect equality
4. Which survey measures unemployment in India?
   Answer: Periodic Labour Force Survey
5. Which curve shows income inequality?
   Answer: Lorenz curve
6. Which scheme guarantees 100 days of wage employment?
   Answer: MGNREGA
7. Which body publishes India’s National MPI?
   Answer: NITI Aayog
8. Which committee set the calorie norms of 2,400 and 2,100?
   Answer: Alagh Task Force
9. Which unemployment arises in the off-season in agriculture?
   Answer: Seasonal unemployment
10. Which scheme replaced SGSY?
    Answer: National Rural Livelihood Mission

How to Practise This Chapter

Practise 10 questions every day and write the steps on paper. Then attempt timed sets from our practice papers and the previous year papers page. See all topics on the Indian Economy notes page, read the previous topic Economic Reforms 1991 and Industrial Policy and the next topic Insurance, Pension and Financial Inclusion.

Frequently Asked Questions

What is the poverty line?

The minimum level of income or consumption needed to meet the basic needs.

Which committee defined the poverty line using the calorie norms?

The Alagh Task Force in 1979.

What was the poverty ratio according to the Tendulkar Committee?

21.9% for 2011–12.

What is the MPI?

The Multidimensional Poverty Index, which measures poverty in health, education and living standards.

What is disguised unemployment?

A situation where more workers are employed than needed, so that removal of some does not reduce output.

What is the PLFS?

The Periodic Labour Force Survey conducted by the NSO.

What is a Lorenz curve?

A curve that shows the distribution of income.

What is the Gini coefficient?

A measure of inequality that lies between 0 and 1.

What is MGNREGA?

A scheme that provides 100 days of guaranteed wage employment to rural households.

What is educated unemployment?

The unemployment of persons who have a degree or diploma.

Is this topic asked in SSC?

Yes. Poverty and unemployment are standard economy questions.

What is structural unemployment?

Unemployment due to the mismatch of workers’ skills with the available jobs.