Test: Class 9 Economy NCERT Based - 2 - UPSC MCQ

The employment structure is characterised by self-employment in the primary sector. The whole family contributes in the field even though not everybody is really needed. So there is disguised unemployment in the agriculture sector.

But the entire family shares what has been produced. This concept of sharing of work in the field and the produce raised reduces the hardship of unemployment in the rural sector.

But this does not reduce the poverty of the family, gradually surplus labour from every household tends to migrate from the village in search of jobs.

Another feature of high poverty rates has been the huge income inequalities.

One of the major reasons for this is the unequal distribution of land and other resources.

Despite many policies, we have not been able to tackle the issue in a meaningful manner.

Major policy initiatives like land reforms which aimed at redistribution of assets in rural areas have not been implemented properly and effectively by most of the state governments.

Since lack of land resources has been one of the major causes of poverty in India, proper implementation of policy could have improved the life of millions of rural poor.

Many other sociocultural and economic factors also are responsible for poverty. In order to fulfil social obligations and observe religious ceremonies, people in India, including the very poor, spend a lot of money.

Prime Minister Rozgar Yozana (PMRY) is another scheme which was started in 1993.

Swarnajayanti Gram Swarozgar Yojana (SGSY) was launched in 1999.

Under the Pradhan Mantri Gramodaya Yojana (PMGY) launched in 2000, additional central assistance is given to states for basic services such as primary health, primary education, rural shelter, rural drinking water and rural electrification.

Mahatma Gandhi National Rural Employment Guarantee Act, 2005 aims to provide 100 days of wage employment to every household to ensure livelihood security in rural areas.

It also aimed at sustainable development to address the cause of draught, deforestation and soil erosion. One-third of the proposed jobs have been reserved for women.

The scheme provided employment to 220 crores person days of employment to 4.78 crore households.

The share of SC, ST, Women person days in the scheme are 23 per cent, 17 per cent and 53 per cent respectively.

The average wage has increased from 65 in 2006–07 to 132 in 2013–14. Recently, in March 2018, the wage rate for unskilled manual workers has been revised, state wise, the range of wage rate for different states and union territories lies in between ` 281 per day (for the workers in Haryana) to 168 per day (for the workers of Bihar and Jharkhand).

Over a period of thirty years lasting up to the early eighties, there was little per capita income growth and not much reduction in poverty. Official poverty estimates which were about 45 per cent in the early 1950s remained the same even in the early eighties.

Since the eighties, India’s economic growth has been one of the fastest in the world. The growth rate jumped from the average of about 3.5 per cent a year in the 1970s to about 6 per cent during the 1980s and 1990s. The higher growth rates have helped significantly in the reduction of poverty.

Therefore, it is becoming clear that there is a strong link between economic growth and poverty reduction. Economic growth widens opportunities and provides the resources needed to invest in human development.

This also encourages people to send their children, including the girl child, to schools in the hope of getting better economic returns from investing in education.

However, the poor may not be able to take direct advantage from the opportunities created by economic growth. Moreover, growth in the agriculture sector is much below expectations. This has a direct bearing on poverty as a large number of poor people live in villages and are dependent on agriculture.

Poverty in India also has another aspect or dimension. The proportion of poor people is not the same in every state.

Although state level poverty has witnessed a secular decline from the levels of early seventies, the success rate of reducing poverty varies from state to state.

Recent estimates show while the all India Head Count Ratio (HCR) was 21.9 percent in 2011-12 states like Madhya Pradesh, Assam, Uttar Pradesh, Bihar and Odisha had above all India poverty levels.

Bihar and Odisha continue to be the two poorest states with poverty ratios of 33.7 and 32.6 percent respectively. Along with rural poverty, urban poverty is also high in Odisha, Madhya Pradesh, Bihar and Uttar Pradesh.

In comparison, there has been a significant decline in poverty in Kerala, Maharashtra, Andhra Pradesh, Tamil Nadu, Gujarat and West Bengal.

States like Punjab and Haryana have traditionally succeeded in reducing poverty with the help of high agricultural growth rates.

Kerala has focused more on human resource development. In West Bengal, land reform measures have helped in reducing poverty. In Andhra Pradesh and Tamil Nadu public distribution of food grains could have been responsible for the improvement.

Food is as essential for living as air is for breathing. But food security means something more than getting two square meals.

Food security has following dimensions (a) availability of food means food production within the country, food imports and the previous years stock stored in government granaries. (b) accessibility means food is within reach of every person. (c) affordability implies that an individual has enough money to buy sufficient, safe and nutritious food to meet one's dietary needs.

Thus, food security is ensured in a country only if (1) enough food is available for all the persons (2) all persons have the capacity to buy food of acceptable quality and (3) there is no barrier on access to food.

Hunger is another aspect indicating food insecurity. Hunger is not just an expression of poverty, it brings about poverty.

The attainment of food security therefore involves eliminating current hunger and reducing the risks of future hunger.

Hunger has chronic and seasonal dimensions. Chronic hunger is a consequence of diets persistently inadequate in terms of quantity and/or quality.

Poor people suffer from chronic hunger because of their very low income and in turn inability to buy food even for survival.

Seasonal hunger is related to cycles of food growing and harvesting. This is prevalent in rural areas because of the seasonal nature of agricultural activities and in urban areas because of casual labourers, e.g., there is less work for casual construction labourers during the rainy season. This type of hunger exists when a person is unable to get work for the entire year.

Buffer Stock is the stock of foodgrains, namely wheat and rice, procured by the government through the Food Corporation of India (FCI).

The FCI purchases wheat and rice from the farmers in states where there is surplus production. The farmers are paid a pre- announced price for their crops. This price is called Minimum Support Price (MSP).

The MSP is declared by the government every year before the sowing season to provide incentives to farmers for raising the production of these crops. The purchased food grains are stored in granaries.

Public Distribution System (PDS) is the most important step taken by the Government of India (GoI) towards ensuring food security.

In the beginning, the coverage of PDS was universal with no discrimination between the poor and the non-poor. Over the years, the policy related to PDS has been revised to make it more efficient and targeted.

In 1992, Revamped Public Distribution System (RPDS) was introduced in 1,700 blocks in the country. The target was to provide the benefits of PDS to remote and backward areas. From June 1997, in a renewed attempt, Targeted Public Distribution System (TPDS) was introduced to adopt the principle of targeting the ‘poor in all areas’.

It was for the first time that a differential price policy was adopted for the poor and non-poor.

AAY was launched in December 2000. Under this scheme one crore of the poorest among the BPL families covered under the targeted public distribution system were identified. Poor families were identified by the respective state rural development departments through a Below Poverty Line (BPL) survey.

Twenty-five kilograms of foodgrains were made available to each eligible family at a highly subsidised rate of ` 2 per kg for wheat and ` 3 per kg for rice. This quantity has been enhanced from 25 to 35 kg with effect from April 2002.

The scheme has been further expanded twice by additional 50 lakh BPL families in June 2003 and in August 2004. With this increase, 2 crore families have been covered under the AAY. In 2009, the scheme was expanded to cover all BPL families and HIV Positive persons.

PDS dealers are sometimes found resorting to malpractices like diverting the grains to the open market to get better margin, selling poor quality grains at ration shops, irregular opening of the shops, etc.

It is common to find that ration shops regularly have unsold stocks of poor quality grains left. This has proved to be a big problem. When ration shops are unable to sell, a massive stock of foodgrains piles up with the FCI.

In recent years, there is another factor that has led to the decline of the PDS. Earlier every family, poor and non-poor had a ration card with a fixed quota of items such as rice, wheat, sugar etc.

These were sold at the same low price to every family. The three types of cards and the range of prices that you see today did not exist. A large number of families could buy foodgrains from the ration shops subject to a fixed quota.

These included low income families whose incomes were marginally higher than the below poverty line families. Now, with TPDS of three different prices, any family above the poverty line gets very little discount at the ration shop. The price for APL families is almost as high as the open market price, so there is little incentive for them to buy these items from the ration shop.