Poverty and Unemployment in India: Committees, Schemes, MGNREGA

Poverty and unemployment are fundamental topics in Indian economy sections of Kerala PSC exams. Questions typically cover poverty line definitions, committee recommendations, types of unemployment, and government schemes. Expect 3-5 marks from this area.

1. Poverty in India: Concepts

Definitions

Concept	Meaning
Absolute poverty	Inability to meet minimum basic needs (food, shelter, clothing)
Relative poverty	Poverty compared to the average standard of living in a society
Poverty line	Minimum income/expenditure level below which a person is considered poor
Head Count Ratio (HCR)	Percentage of population below poverty line
Poverty gap	Difference between poverty line and actual income of the poor
Multidimensional Poverty Index (MPI)	UN measure using health, education, and living standards indicators

2. Poverty Line: Evolution in India

Committee/Method	Year	Criteria
Dadabhai Naoroji	1901	First to discuss poverty line; “Poverty and Un-British Rule in India”
Planning Commission (original)	1962	Based on calorie intake: 2,400 cal/day (rural), 2,100 cal/day (urban)
Alagh Committee (Y.K. Alagh)	1979	Calorie-based poverty line; first official method
Lakdawala Committee	1993	Updated consumption basket; state-specific poverty lines; used till 2004-05
Tendulkar Committee	2009	Shifted from calorie to broader consumption (food + health + education)
Rangarajan Committee	2014	Higher poverty line; more people classified as poor

Tendulkar Committee (2009)

Aspect	Details
Chairperson	Prof. Suresh Tendulkar
Appointed by	Planning Commission
Poverty line (2011-12)	Rs. 816/month (rural), Rs. 1,000/month (urban) — per person
Method	Monthly Per Capita Expenditure (MPCE) — includes food, education, health, clothing
Poverty estimate (2011-12)	21.9% of population below poverty line
Key shift	Moved away from calorie-only norm; included non-food items
States with highest poverty	Chhattisgarh (39.9%), Jharkhand (36.9%), Manipur (36.9%)
Criticism	Poverty line too low; Rs. 27/day (rural) and Rs. 33/day (urban) — unrealistic

Rangarajan Committee (2014)

Aspect	Details
Chairperson	Dr. C. Rangarajan (former RBI Governor)
Appointed by	Planning Commission
Poverty line (2011-12)	Rs. 972/month (rural), Rs. 1,407/month (urban) — per person
Method	Separate food and non-food baskets; food basket based on nutrition norms
Poverty estimate (2011-12)	29.5% of population below poverty line (higher than Tendulkar)
Calorie norm retained	2,155 cal (rural), 2,090 cal (urban) per person per day
Key difference from Tendulkar	Higher poverty line = more people counted as poor

Comparison Table

Feature	Lakdawala	Tendulkar	Rangarajan
Base norm	Calorie only	Consumption basket	Food + non-food norms
Rural poverty line (2011-12)	—	Rs. 816/month	Rs. 972/month
Urban poverty line (2011-12)	—	Rs. 1,000/month	Rs. 1,407/month
Poverty ratio (2011-12)	—	21.9%	29.5%
Number of poor	—	~27 crore	~36 crore
Status	Replaced	Officially used (till 2014)	Submitted but not officially adopted

3. Multidimensional Poverty Index (MPI)

Aspect	Details
Developed by	UNDP and Oxford Poverty and Human Development Initiative (OPHI)
India’s National MPI	Released by NITI Aayog (first in 2021)
Dimensions (3)	Health, Education, Standard of Living
Indicators	12 indicators across 3 dimensions
India MPI (NITI Aayog 2023)	Approximately 11.28% multidimensionally poor (based on NFHS-5 data)
States with lowest MPI	Kerala, Goa, Delhi, Tamil Nadu
States with highest MPI	Bihar, Jharkhand, Meghalaya, UP

4. Types of Unemployment

Type	Definition	Example in India
Structural	Mismatch between skills of workers and jobs available	Engineering graduates unable to find relevant jobs
Cyclical	Due to economic downturns/recessions	Job losses during COVID-19 lockdown
Frictional	Temporary unemployment while switching jobs	Person voluntarily leaving one job to find another
Seasonal	Occurs in specific seasons only	Agricultural labourers unemployed during non-crop season
Disguised	More workers employed than needed; marginal productivity = zero	Indian agriculture — 5 people doing work of 3
Open	Willing and able to work but no job available	Urban educated youth without employment
Underemployment	Employed below full capacity (hours or skill)	PhD holder working as a clerk
Educated unemployment	Educated people unable to find suitable jobs	Common in India among graduates
Technological	Jobs lost due to machines/automation	Handloom workers replaced by power looms

Key Employment Data Sources

Survey/Report	Conducted by	Frequency
Periodic Labour Force Survey (PLFS)	NSO (National Statistical Office)	Annual + Quarterly
Census	Registrar General of India	Decennial
Economic Survey	Ministry of Finance	Annual
Employment-Unemployment Survey	NSSO (now NSO)	Quinquennial (discontinued; replaced by PLFS)

5. Major Poverty Alleviation Programmes

Programme	Year	Key Feature
IRDP (Integrated Rural Development Programme)	1980	Self-employment for rural poor
NREP (National Rural Employment Programme)	1980	Employment generation
JRY (Jawahar Rozgar Yojana)	1989	Merged NREP and RLEGP
PMRY (PM Rozgar Yojana)	1993	Self-employment for educated unemployed
SJSRY (Swarna Jayanti Shahari Rozgar Yojana)	1997	Urban self-employment
SGSY (Swarnajayanti Gram Swarozgar Yojana)	1999	Self-employment through SHGs
MGNREGA	2005 (Act); 2006 (launched)	100 days guaranteed employment
NRLM (National Rural Livelihoods Mission / DAY-NRLM)	2011	Self-employment through SHG model
NULM (National Urban Livelihoods Mission / DAY-NULM)	2013	Urban livelihoods, street vendors
PMGKY (PM Garib Kalyan Yojana)	2020	COVID relief — free food grains

6. MGNREGA (Mahatma Gandhi National Rural Employment Guarantee Act)

Aspect	Details
Full form	Mahatma Gandhi National Rural Employment Guarantee Act
Act passed	23 August 2005 (notified 7 September 2005)
Launched	2 February 2006 (initially in 200 districts)
Extended	April 2008 — all rural districts of India
Guarantee	100 days of unskilled manual work per household per financial year
Right-based	Legal guarantee — demand-driven (worker demands, government provides)
Unemployment allowance	If work not provided within 15 days, daily unemployment allowance must be paid
Wage payment	Within 15 days; through bank/post office accounts
Women	At least one-third of beneficiaries must be women
Work type	Water conservation, land development, road building, flood control
Funding	90% Central Government, 10% State Government (for material costs: 75:25)
Transparency	Social audit mandatory; job cards issued to every household
Ministry	Ministry of Rural Development

Key Features of MGNREGA

Feature	Significance
Demand-driven	Workers apply; government obligated to provide work
Time-bound	Work must be provided within 15 days of application
Worksite facilities	Drinking water, shade, creche (if 5+ children under 6)
No contractors	Work cannot be outsourced to private contractors
60:40 ratio	At least 60% spending on wages, maximum 40% on materials
Gram Sabha	Identifies works to be undertaken
Social audit	Mandatory public audit by Gram Sabha

7. Skill Development Programmes

Programme	Year	Objective
Skill India Mission	2015	Umbrella initiative for skilling
PMKVY (Pradhan Mantri Kaushal Vikas Yojana)	2015	Short-term skill training with certification
DDU-GKY (Deen Dayal Upadhyaya Grameen Kaushalya Yojana)	2014	Skill training for rural poor youth
Startup India	2016	Entrepreneurship promotion
MUDRA Yojana (Micro Units Development and Refinance Agency)	2015	Loans for micro/small enterprises
Stand-Up India	2016	Loans for SC/ST and women entrepreneurs

MUDRA Loan Categories

Category	Loan Amount	Stage
Shishu	Up to Rs. 50,000	Startup phase
Kishore	Rs. 50,001 to Rs. 5 lakh	Mid-stage growth
Tarun	Rs. 5,00,001 to Rs. 10 lakh	Expansion phase

8. Kerala-Specific Information

Aspect	Details
Poverty rate in Kerala	Among the lowest in India (NITI Aayog MPI reports consistently rank Kerala best)
Kerala’s model	High human development despite modest per capita income
MGNREGA in Kerala	One of the top-performing states in implementation
Kudumbashree	Kerala’s poverty eradication and women empowerment programme (1998)
Ayyankali Urban Employment Guarantee Scheme	Kerala’s own urban employment scheme (100 days, modelled on MGNREGA)
Life Mission	Housing for all homeless families in Kerala

Kudumbashree

Aspect	Details
Launched	1998 (by Government of Kerala)
Structure	Three-tier: NHG (Neighbourhood Group) — ADS (Area Development Society) — CDS (Community Development Society)
Members	Over 45 lakh women
Activities	Microfinance, micro-enterprises, collective farming
Significance	One of the largest women’s networks in the world

9. Key Points for PSC

• Dadabhai Naoroji was the first to estimate poverty in India (1901)
• Current official poverty measurement is based on Tendulkar methodology (though Rangarajan was recommended, it was never officially adopted)
• MGNREGA guarantees 100 days of employment per household (not per person)
• MGNREGA is a right-based programme — legally enforceable
• If work is not given within 15 days, unemployment allowance must be paid
• Disguised unemployment is most prevalent in Indian agriculture
• Kerala has one of the lowest poverty rates among Indian states
• Kudumbashree is Kerala’s signature poverty eradication programme
• The PLFS (Periodic Labour Force Survey) is the current official source for employment data
• India’s MPI is published by NITI Aayog (not Planning Commission — which was dissolved in 2015)
• MGNREGA spending ratio: at least 60% on wages, maximum 40% on material
• The act was originally called NREGA; renamed MGNREGA in 2009 (added “Mahatma Gandhi”)