CBSE Class 12 Economics Poverty Worksheet

 

Important Points for Chapter 4 Poverty Class 12 Economics

♦ India had an independent economy before the advent of British rule. Though agriculture was the main source of livelihood for most of people, yet, the economy of the country was characterised by various kinds of manufacturing activities. The objective of policies adopted by the colonial government was to export raw material from India and import manufactured goods from England. The colonial government never made any sincere attempt to estimate India’s national income and per capita income. First scientific estimate was made by V.K.R.V. Rao in 1931-32 during colonial rule.
♦ Agriculture sector on the Eve of Independence— Indian economy under the British colonial rule remained fundamentally agrarian. The main causes of stagnation of agricultural sector were as follows :
Change in Tenurial system and Commercialization of agriculture:

Change in System and Tenure—
(i) Permanent settlement or Zamindari system,
(ii) Ryotwari system and
(iii) Mahalwari system Commercialisation of Agriculture— Main causes were :
(i) Industrial revolution
(ii) Commercial policy of British Government,
(iii) Increase in foreign trade,
(iv) Payment of Land Revenue in cash,
(v) Use of money,
(vi) Development of the means of transportation and communication,
(vii) Expansion of the agricultural market,
(viii) High price of cash crops.

♦ Industrial Sector on the Eve of Independence—
Like agriculture, industrial sector of India could not develop. At the time of independence, the condition of industrial sector was as follows :
(i) De-industrialisation or decline of Indian Handicraft industry,
(ii) One sided modern industrial structure,
(iii) Lack of capital goods industries,
(iv) Limited operation of public sector.

♦ Main characteristics of Industrial Development during British rule—
(i) Development of consumer product industries,
(ii) Rising share of Indian capital,
(iii) Concentration of enterprises in few hands,
(iv) Dominance of foreign capital,
(v) Investment of own capital of capitalists,
(vi) Industrial policy,
(vii) Regional imbalance in industrial development.

♦ Foreign Trade on the Eve of Independence—
India was a trading nation before the advent of colonial rule. But
due to restrictive policies adopted by the colonial government, India’s foreign trade was effected adversely.
Foreign Trade conditions on the eve of independence were as follows :
(i) Export of primary products and import of finished goods,
(ii) Monopoly control of Britain on foreign trade, and
(iii) Drain of Indian wealth.

♦ Demographic conditions on the eve of Independence— First Census of population of British India was made in 1881. At the time of independence, the features of demographic conditions were as follows :
(i) High birth and death rate,
(ii) High infant mortality rate,
(iii) Low life expectancy ratio,
(iv) Low literacy rate,
(v) Low standard of living.

♦ Occupational structure on the eve of independence— Occupational structure refers to distribution of working population across different industries and sectors. During colonial rule, occupational structure did not change much. The state of occupational structure during the British rule was as follows :
(i) Pre-dominance of agricultural sector, and
(ii) Growing regional variation.

♦ Infrastructure on the eve of independence— Under infrastructure, we include all those industries and services which are used to develop other industries. Development of infrastructure during colonial rule was not to provide better facilities to general public but serve the British interest only. We include the following under infrastructure: (i) Railway, (ii) Roads,
(iii) Water and Air transport,
(iv) Communication system.

♦ Indian Economy on the Eve of Independence—
(i) Colonial economy,
(ii) Semi-feudal economy,
(iii) Backward economy, and
(iv) Stagnant economy.

♦ Positive contribution of British rule—
(i) Self-sufficiency in food grain production,
(ii) Better means of transportation,
(iii) Check on famines,
(iv) Shift to monetary economy, and
(v) Effective administration set up.
♦ After independence, India envisaged an economic system which combines the best features of socialism and capitalism — this culminated in the mixed economics model.

♦ Meaning of Planning— Planning is a technique and a means to attain goals. These pre-determined goals are specially formulated by the central planning authority. ♦ Characteristics of Economic Planning—
1. Organisation system, 2. Maximum utilisation of Resources,
3. Applicable on the whole economy,
4. Central planning Authority,
5. Interference by the state,
6. Changes in the economy,
7. Long term process,
8. Pre-determined objectives,
9. Existence of valuation mechanism, 10. Achievement of objectives.

♦ Plan period in India— India has completed 12 Five Year Plans. Time Period of 12th Plan was 2012-2017.
♦ Indian Planning Commission— The Planning Commission of India was established on 15th March 1950, to evaluate the physical, capital and human resources and on this basis programmes for the Plan Development and its evaluation. The Planning Commission of India has now been dissolved in 2015 and replaced with National Institution for Transforming India (NITI) Aayog.
♦ National Development Council (NDC)— As an apex body to planning, it was constituted on 6th August 1952. No plan was implemented without its approval.
♦ Objectives of Planning in India—
(i) Economic growth,
(ii) Modernisation,
(iii) Self-reliance, and
(iv) Economic equity.
♦ Achievements of Indian Plans—
1. Growth - Oriented Development Strategy (1951-65)— In first plan, actual growth rate was higher than targeted. But in second and third plans, it was less than targeted. 2. Equity Oriented Development Strategy (1966-90)— There are two big achievements in the field of self-reliance.
(i) India attained almost self-sufficiency in the field of food grains, and
(ii) due to development of heavy engineering, machinery equipment, iron and steel and other capital goods industries, India become self-sufficient in machinery equipment and other capital goods.

♦ Failures of Economic Planning—
1. Slow progress in per capita and national income,
2. Unemployment,
3. Increase in economic disparity,
4. Economic instability,
5. Failure in agriculture sector,
6. Failure in industrial sector,
7. Failure in resource mobilisation,
8. Dependence on foreign aid,
9. Defective regulatory policy.

♦ Suggestions for the Success of Plans—
1. Widespread mass participation,
2. Control on prices,
3. Co-ordination between public and private sector,
4. Integration between long term and short term programmes,
5. Physical achievements should be basis of success,
6. Encouragement of saving and investment,
7. Control on population growth,
8. Job oriented economic planning,
9. Coordination between capital intensive and consumption oriented industries,
10. Utilisation of human power,
11. Clean administration.

♦ During the colonial rule, there was neither growth nor equity in agriculture sector. The policy makers of independent India had to address these issues which they did through land reforms and promote the use of High Yielding Varieties of Seeds which ushered revolution in Indian agriculture.

♦ Importance of Agriculture in Indian Economy—
1. Main source of employment,
2. Contribution in National Income,
3. Base of industrialisation,
4. Base of economic development,
5. Importance in Foreign Trade,
6. Supply of food grains,
7. Contribution in revenue,
8. Dependence on trade and transport,
9. Capital formation,
10. Rainbow of revolution.

♦ Characteristics of Indian Agriculture—
1. Main source of livelihood,
2. Disguised and seasonal unemployment,
3. Labour intensive agriculture,
4. Excess dependence of agriculture on Monsoon,
5. Small size of land holdings,
6. Low level of productivity,
7. Old and defective agricultural production, 8. Pre-dominance of food crops. 

♦ Land Reforms— Land reforms, primarily, refer to change in the ownership of holdings. It was done with the purpose of increasing agricultural production, the direct intervention of government in agrarian structure.

♦ Need for Land Reforms—
(1). Retrograde agrarian structure and agrarian relation and 2. Small and fragmented agricultural holdings.

♦ Land Reform Measures—
1. Abolition of intermediaries,
2. Tenancy Reforms,
3. Re-organisation of agriculture.

♦ Land Ceiling : It was the policy which recommended the fixation of maximum size of land which would be owned by an individual. The purpose of land ceiling was to reduce the concentration of land ownership in a few hands.
♦ Green Revolution— Green Revolution implies the strategy related to improving production technique and productivity in agriculture.
♦ Features of Green Revolution—
1. High Yielding Varieties of seeds,
2. Extensive use of fertilisers,
3. Expansion of Irrigation facilities,
4. Plant protection,
5. Establishment of different institutions,
6. Agro-service centres,
7. Multiple cropping programme,
8. Mechanisation,
9. Scientific method of agriculture,
10. Development of agricultural land,
11. Improvement of animal husbandry,
12. Fixation of Minimum Support Prices.

♦ Achievements of Green Revolution—
1. Rise in production and productivity,
2. Increase in income,
3. Increase in employment,
4. Rural prosperity,
5. Industry and agriculture relationship,
6. Innovation.

♦ Economic Subsidies— To assure availability of fertilizers to the farmers at reasonable price government is providing subsidy. A current debate is should subsidy continue or we may go without subsidy. Arguments are put forward both in favour and against subsidy.

♦ In the Pre-British period, India was an industrially advanced country. But the British rule systematically destroyed the Indian industries. As a result, at the time of independence, India had a weak industrial base, poorly developed infrastructure and a stagnant economy.

♦ Basic features of India’s industrial development during Plan Period—
(1) Increase in industrial growth rate,
(2) Increase in contribution of industrial sector in GDP,
(3) Rapid development of basic industries,
(4) Strong infra-structural base,
(5) Import substitution,
(6) Establishing enterprises with foreign assistance,
(7) Increase in export of industrial products,
(8) Establishment of financial Institution,
(9) Development of information technology and electronics industries,
(10) Development of small and cottage industries,
(11) Dis-investment in public sector,
(12) Development of food processing industry, and
(13) Emergence of consultancy services.

♦ Problems of Industrial Development in India—
(1) Problem of Energy,
(2) High cost,
(3) Shortage of capital,
(4) Shortage of foreign exchange,
(5) Lack of able entrepreneurs,
(6) Irregular rate of industrial growth,
(7) Unemployment problem ignored,
(8) Industrial Unrest,
(9) Small and medium sector neglected,
(10) Problem of industrial sickness,
(11) Less utilisation of installed capacity,
(12) Regional disparity,
(13) Increase in concentration of economic power,
(14) Failure of public sector enterprises.

♦ Measures to Encourage Industrial Development—
(1) Creation of economic and social infrastructure,
(2) Development of entrepreneurial skill,
(3) To ensure availability of capital,
(4) Financial stability,
(5) Rehabilitation of sick units,
(6) Removal of control,
(7) Human capital formation,
(8) Modernisation,
(9) Improvement in industrial relation,
(10) Professionalisation of management,
(11) Industrial Research.

♦ Industrial Policy— It refers to such formal declaration made by the Government which describes the general policies which will be adopted by the Governments towards the industries.
♦ Industrial Policy Resolution, 1956—
(1) Classification of industries into public and private sectors,
(2) Stress on the role of cottage and small scale industries,
(3) Reduction in regional disparities,
(4) Foreign Capital,
(5) Facilities for labourers.
♦ Industrial Licensing Policy— Industrial licensing is an authority issued by the government organisation to permit the institutions for starting an industry or to start a function. In India it was started in 1952. The basis of this policy was Industries (Development and Regulation) Act 1951, and New Industrial Policy for 1991.
♦ Public Sector Enterprises— A public sector enterprise is that enterprise which is owned and managed by the government.

♦ Characteristics of Public Enterprises—
(1) Public ownership,
(2) Socio-economic objective,
(3) Accountability towards public,
(4) Financing from government funding.
♦ Role of Public Sector in Industrialisation—
(1) Contribution in National Income,
(2) Contribution in Employment generation,
(3) Contribution in Export,
(4) Development of small scale sector,
(5) Development of backward area,
(6) Expansion of Technological base,
(7) Help in achievement of self-sufficiency.

♦ Problems of Public Sector—
(1) Bureaucratic Delays,
(2) Lack of Technical efficiency,
(3) Discriminating policy of organisation,
(4) Lack of incentives,
(5) Inadequate control of Parliament,
(6) Lack of mutual co-operation,
(7) Over capitalisation,
(8) Operational and Managerial inadequacies,
(9) Under utilisation of Production capacity,
(10) Over-sized plants,
(11) Take-over of sick units,
(12) Long gestation period.

♦ Suggestions for Reforms of Public Sector—
(1) Appropriate Pricing Policy,
(2) Test of Efficiency,
(3) Full utilisation of Production Capacity,
(4) Quantitative determination of objectives,
(5) Use of latest techniques,
(6) Precautions in appointment of employees,
(7) Competition,
(8) Other suggestions.
♦ Disinvestment in Public Sector— It refers to the dilution of stake (claims) of the government in the equity of public sector undertaking so as to transfer the ownership rights to private hands.
♦ Small Scale Sector in India—
Cottage Industry— These industries are mostly traditional, producing traditional products by employing traditional methods.
Small Sector Industries— These are defined in relation to capital investment in machines and buildings. Presently, this limit is 5 crores. 

♦ Role of Small Sector in Indian Economy—
(1) Provide Economic equality,
(2) Production of artistic goods,
(3) Protection from clan-struggle,
(4) Need less technology,
(5) Protection from bad effects of urbanisation and industrialisation,
(6) Less dependency on imports,
(7) Important place in country’s exports.

♦ Problems of Small Sector—
(1) Shortage of Capital,
(2) Undeveloped production system,
(3) Problem of raw material,
(4) Lack of organised market,
(5) Competition from large scale units,
(6) Lack of education,
(7) Lack of standardization,
(8) Export neglected,
(9) Dis-interest of consumers,
(10) Non-Receipt of payments in time.

♦ In the first seven plans, trade was characterised by what is commonly called an inward looking trade strategy. Technically, this policy is called Import Substitution Policy. ♦ Role and Importance of Foreign Trade—
1. Advantage of advance technology,
2. Increases consumption capacities,
3. Benefits to participating countries,
4. Increases production capacity,
5. Serves as a transmission belt for capital,
6. Creates fair competition.
♦ Features of India’s Foreign Trade—
1. Increase in the value and volume of trade,
2. Increasing share in the gross national product,
3. Increasing share in the world trade,
4. Changes in the composition of exports,
5. Changes in the composition of import,
6. Export-Import ratio,
7. Changes in the direction of foreign trade,
8. Adverse balance of trade.
♦ Problems of India’s Foreign Trade—
1. Adverse balance of trade,
2. Rapid increase in imports,
3. Comparatively lower growth in exports,
4. Increase in domestic demand,
5. Rising Prices,
6. Increasing foreign debt.
♦ Foreign Trade Policy in India Import substitution in India— It is a process to produce the alternate or close substitute of imported goods in the country itself.
Need for Import Substitution—
1. Scarcity of foreign exchange,
2. Un-favourable balance of Trade,
3. Devaluation of rupee,
4. Scarcity of foreign aid, 5. Shortage of essential commodities,
6. Need for industrial development,
7. Increase in self-sufficiency.
♦ Export Promotion— It is a process in which incentives are provided to old exporter and new entrepreneurs to increase the exportable surplus.

♦ Export Promotion Policies - Pre-Reforms Period—
1. Establishment of various organisations,
2. Export-Import bank,
3. Export processing zones,
4. Special economic zone,
5. Export promotion industrial park,
6. Export promotion capital goods,
7. Adoption of Liberalised Licensing System.

♦ Foreign Trade Policy (2009-14)—
1. DEPB extended till Dec. 2010,
2. Relaxation in export promotion of capital goods,
3. Tax refund scheme for Jewellery sector,
4. Single window scheme,
5. Re-export of unused leather,
6. Export units allowed to sell 90 percent of goods in domestic market,
7. Provision of dollar credits,
8. Addition of new markets and,
9. Zero duty under technology upgrade scheme.

♦ New Economic Policy (NEP) refers to the efforts made through different policy decisions and changes that were made to create competitive environment and increase in productivity and efficiency.
♦ Need for Economic Reforms—
(A) Problems facing Economy—
(i) Unsatisfactory performance of public sector,
(ii) High rate of inflation,
(iii) Increasing debt burden,
(iv) Problem of balance of payment.
(B) Immediate crisis—
(i) Gulf crisis,
(ii) Inadequate Foreign Exchange Reserves.

♦ Main components of New Economic Policy—
(i) New Industrial Policy,
(ii) New trade policy,
(iii) New fiscal policy,
(iv) New monetary policy,
(v) New investment policy,
(vi) Globalisation of finance.

♦ Main Phases of New Economic Policy—
(i) Liberalisation,
(ii) Privatisation, and
(iii) Globalisation.
♦ Meaning of Liberalisation— Liberalisation means removing all unnecessary controls and restrictions like permits, licenses, protectionist duties, etc., imposed by the government. ♦ Measures adopted for Liberalisation—
(A) Soft Liberalisation policy (1985-1991)— The era of liberalisation started with the period of Rajiv Gandhi, the then Prime Minister, in 1985. In this period of modernization, a large number of incentives and exemptions were granted.
(B) Extensive Liberalisation Policy [After 1991 period]—
(i) Liberalised licensing policy,
(ii) Expansion of industries,
(iii) Concession from Monopolies,
(iv) Extending investment limits for small industries,
(v) Free import of machinery and Raw materials,
(vi) Freedom to import technology,
(vii) Freedom to financial institution,
(viii) Reduction in Tax rates.
♦ Meaning of Privatisation— Transfer of ownership from government to private sector of organisations which are presently run and controlled by government.
♦ Measures of Privatisation—
(A) Ownership Measures—
(i) Total Denationalisation,
(ii) Joint venture.
(B) Organisational Measures—
(i) Holding company,
(ii) Leasing,
(iii) Disinvestment.

♦ Factors encouraging privatisation in India—
(i) New Economic reforms programmes,
(ii) Increasing debt burden on government,
(iii) Presence of foreign companies,
(iv) To make Indian companies more competitive,
(v) Broad base for increasing production.
♦ Steps of Indian Economy towards privatisation—
(i) Contraction of Public sector,
(ii) Participation of private sector,
(iii) Abolition of Industrial licensing,
(iv) Improvement by MOU,
(v) Re-organisation of public sector,
(vi) Disinvestment of equity of public sector,
(vii) Establishment of National Renewable fund,
(viii) Removal of investment control on big houses,
(ix) Policy related to sick units,
(x) Sale of shares of public sector undertaking.

♦ Arguments in favour of Privatisation— Reduction in Budgetary Deficit,
(ii) Less political intervention,
(iii) 131Improvement in economic efficiency and technical efficiency,
(iv) Increased accountability,
(v) Globalisation of economy,
(vi) Sources of new job,
(vii) Increase in industrial growth,
(viii) Increase in foreign investment,
(ix) In line with international trade,
(x) Encouragement to new Inventions.

♦ Arguments Against Privatisation—
(i) Concentration of economic power,
(ii) Substitution of monopoly power,
(iii) Lop-sided development of industries,
(iv) Industrial sickness,
(v) Entry of multinationals,
(vi) No safety for the weaker sections,
(vii) Social institutions,
(viii) Corruption.
♦ Globalisation— Globalisation means integrating the economy of the country with the world economy.
♦ Factors fostering Globalisation in India—
(i) Technical changes,
(ii) Competition,
(iii) Liberalisation policies,
(iv) Emergence of United states as a super power,
(v) Experiences of Developing countries,
(vi) Other factors.

♦ Effects of Globalisation—
(A) Favourable Effects—
(i) Increasing share of exports in world trade,
(ii) Favourable effect on Export-Import Ratio,
(iii) Application of high technology,
(iv) Stable and strong exchange rate.
(B) Adverse Effects—
(i) Decrease in Revenue of Indian Industries,
(ii) Increasing share in capital and management by foreign entrepreneurs,
(iii) Increasing Regional disparities,
(iv) Export of Profit.

♦ Suggestions Regarding Globalisation—
(i) Improvement in Competitiveness of Indian producers,
(ii) Alliance with MNCs,
(iii) Self-sufficiency in Technology,
(iv) Facing International protectionism, and
(v) Modernisation of Agriculture and small sector.
♦ Outsourcing— Outsourcing means obtaining goods and services by contract from an outside source.
♦ World Trade Organisation— From January 1, 1995, WTO has been working. It was replaced the GATT. The objective of WTO was free trade in order to help in the growth and development of all member countries. The WTO acts as a permanent watch dog of international trade.

♦ Achievements of LPG Policies—
(i) Rise in GDP growth,
(ii) Rise in Foreign exchange reserves,
(iii) Control of inflation,
(iv) Rise in flow of foreign capital,
(v) Rise in competitiveness of industrial sector,
(vi) Rise in integration with the world economy.
♦ Demonetisation— It is the process of stripping a currency unit from its status as legal tender in the country.
♦ Demonetisation results in change in national currency.
♦ The present currency in circulation is pulled off and new currency is circulated.
♦ Types of Demonetisation
(i) Total Demonetisation
(ii) Partial Demonetisation
♦ Purposes sought by Demonetisation 
(i) Stripping corruption
(ii) Combating inflation
(iii) Curbing counterfeit currency
(iv) Combating tax evasion
(v) Increasing performance of economy
♦ History of Demonetisation in India.
(i) On 12/01 /1946 - all notes of denominations of ₹500 and ₹1000 were demonetised with a time limit of 10 days to exchange demonetised notes. Its purpose was to catch tax evaders.
(ii) On 16/01/1978 - all notes of denominations of ₹1000, ₹5000 and ₹10000 were demonetised with a time limit of 3 days to exchange demonetised notes. Its purpose was to catch corrupt leaders and officials in predecessor governments.
(iii) On 08/11/2016 - all notes of denominations of ₹ 500 and ₹1000 were demonetised with a time limit of 50 days to exchange demonetised notes from banks and some essential service stores.
♦ Demonetisation of 2016
(i) On 8 November 2016, the Government of India announced the demonetisation of all ₹500 and ₹1000 banknotes of the Mahatma Gandhi Series.
(ii) ₹ 500 (new series) and ₹ 2000 notes were introduced.
(iii) 50 days’ time limit given for exchange of demonetised notes.
(iv) Limits were put on exchange per day and withdrawal per day (and week) during this time.
(v) Mixed reaction by public but strongly criticized by Opposition.
♦ Effects of 2016 Demonetisation
(i) Pushed India towards cashless economy
(ii) Raised tax payments
(iii) Brought an end to black money
(iv) Curbed terrorist funding
(v) Curbed effect on growth and revenues of MSMEs 
♦ Goods and Service Tax (GST)
♦ Objectives of GST
(i) To eliminate the cascading impact of taxes on production and distribution cost of goods and services,
(ii) Streamlining indirect tax regime
(iii) Growth of Revenue in States and Union Territories
(iv) Reduction in transaction costs and unnecessary wastages
(v) Elimination of the multiplicity of taxation
(vi) One Point Single Tax
(vii) Reduction in average tax burdens
(viii) Reduction in the corruption
♦ Types of GST laws (i) At a centre level called ‘Central GST (CGST)’

(ii) At the state level - ‘State GST (SGST)’.
♦ Benefits of GST (i) GST provides comprehensive and wider coverage of input credit setoff, you can use service tax credit for the payment of tax on sale of goods etc.
(ii) Many indirect taxes in state and central level have been included by GST. You need to pay a single GST instead of all.
(iii) Uniformity of tax rates across the states.
(iv) Ensure better compliance due to aggregate tax rate reduction.
(v) By reducing the tax burden, the competitiveness of Indian products in international market has increased and there by development of the nation.
(vi) Prices of goods are expected to reduce in the long run as the benefits of less tax burden would be passed on to the consumer.

 

Question. Poverty data collected officially by…
(a) National Sample Survey Organization
(b) National Rural Development Programme
(c) National Statistical Department
(d) National Census Survey
Answer: C

Question. Minimum calorie requirement in rural areas for per day is
(a) 1400 calorie
(b) 2100 calorie
(c) 2400 calorie
(d) 2800 calorie
Answer: C

Question. Who introduced the concept of “Jail Cost of Living”?
(a) Mahatma Gandhi
(b) Dadabhainaroji
(c) Jawaharlal Nehru
(d) Sardar Vallabhai Patel
Answer: B

Question. Self Employment programmes include…
(a) Prime Minister Rojgar Yojana (PMRY)
(b) Sampoorna Grameen Rojgar Yojana (SGRJ)
(c) National Social Assistance Programme (NSAP)
(d) National Food for Work Programme (NFWP)
Answer: A

Question. In which year “National Food for Work” programme was launched?
(a) 2008
(b) 2004
(c) 1999
(d) 2010
Answer: B

Question. The earlier “Food for Work Programme” has now been converted into
(a) Intensive Area Development Programme
(b) Integrated Rural Development Programme
(c) Mahatma Gandhi National Rural Employment Programme
(d) Minimum Needs Programme
Answer: C

Very Short Answer Type Questions

Question. Name the programme initiated by the Government to help the elderly people, poor and destitute woman.
Answer: National Social Assistance Programme (NSAP)

Question. Which standard is used by the concept of absolute poverty to measure number of poor people?
Answer: Poverty Line

Question. Name the two measures of poverty
Answer: 1. Absolute Poverty 2. Relative Poverty

Question. Mention two wage employment programmes initiated by the government?
Answer: 1. Sampoorna Grameen a Rojgar Yojana
2. National Food for Work Programme

Question. Under MNERGA, What is the minimum number of days of employment in a year guaranteed?
Answer: 100 days in a year

Question. What is meant by H.C.R (Head Count Ratio) ?
Answer: When the number of poor is estimated as the proportion of people below the poverty line, it is known as Head Count Ratio.

Short Answer Type Questions

Question. Briefly explain the role of buffer stocks in the context of agricultural marketing.
Answer: The Government of India has adopted the policy of buffer stocks to minimise the fluctuations in the food prices. Buffer stocks serve as shock absorbers in the economy and provide a defence mechanism against the widely fluctuating price levels. Under the buffer stock policy, the government builds up stocks of food through direct purchases from the farmers and releases these stocks for sales in the domestic market when prices are increasing. Buffer stock operations aim at eliminating unduly low prices consequent to bumper crops.

Question. Is there any relationship between unemployment and poverty ? Explain. 
Answer:
(i) Poverty and Unemployment are interdependent on each other. When unemployment prevails people don’t get income.
(ii) As a result, they are not able to get necessities of life and they become poor. 
(iii) Unemployment gives birth to poverty. Therefore, there is a relationship between poverty and unemployment.

Question. Why is it important to develop proper storage facilities in rural areas?
Answer: It is essential to develop proper storage facilities in rural areas so that farmers can wait for better price 149for their products in the market. They are forced to sell their crops at very low prices to traders because of the fear of getting damage from fire, rodents or pests due to lack of proper storage, facility.

Question. Discuss the importance of credit in rural development.
Answer: The importance of credit in rural development are as follows :
(i) Credit for production : In this, all type of credits are included which are used for various farm activities such as credit for seeds, fertilizers, irrigation and fodder. The farmers have credit to borrow to pay the rent of land, wages of the labourers, government tax, etc. All these activities are related to production, Therefore, the credit received to meet their needs is called productive credit. (ii) Credit for consumption : Indian farmers borrow not only for productive works but for consumption also. In this, the credit is received for the following objectives :
(a) For marriage and death.
(b) To repay the old debts.
(c) For the repair, construction and purchase of houses.
(d) For irrigation.

Question. What is the difference between Relative and Absolute Poverty?
Answer: 1. Relative Poverty:
(a) It refers to poverty of people in comparison to other people, regions or nations.
(b) Relative poverty helps in understanding the relative position of different segments of the population.
2. Absolute Poverty:
(a) It refers to the total number of people living below poverty line.
(b) Absolute poverty helps to measure the number of poor people.

Question. Write a short notes on (i) National Food for Work Programme
(ii) National Social Assistance Programme
Answer: (i) National Food for Work Programme (NFFWP):
• It was launched in 2004
• The objective of Intensifying the generation of supplementary wage employment
• It was initially implemented in 150 most backward districts of the country
• The Programme was implemented as a 100 percent Centrally sponsored scheme
• This programme was incorporated in Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) in 2005
(ii) National Social Assistance Programme (NSAP):
• It was initiated by the central government on 15th August 1995 to help a few specific groups
• Under this Programme, elderly people who do not have anyone to take care of them are given pension to sustain themselves
• Poor woman who are destitute and widows are also covered under this scheme

Question. What are the causes of poverty in India?
Answer: These below 8 are the causes of poverty in India:
• Population Explosion
• Low level of economic development
• Agriculture backwardness
• High Illiteracy rate
• High Un-Employment
• High level of Indebtedness
• Income inequalities
• High Inflation

Question. Explain “Mahatma Gandhi National Rural Employment Guarantee Act 2005”
Answer: • It aims at enhancing the livelihood security of people in rural areas by guaranteeing hundred days of wage employment in a financial year to a rural household whose adult members volunteer to do unskilled manual work. 
• The poor who are ready to work at the minimum age can report for work in areas, where this programme is implemented.
• Nearly 5 Crore household got employment opportunities under this Act

Question. Briefly discuss the “Swarnjayanti Gram Swarojgar Yojana”
Answer: • It aims at promoting micro enterprises and to bring the assisted poor families above the poverty line, by organizing them into Self Help Groups (SHGs)
• People who wish to benefit from this scheme are encouraged to form Self Help Groups (SHGs)
• They are encouraged to save some money and lend among themselves as small loans.
• The government provides partial finance assistance to SHGs
• This has now been restructured as National Rural Livelihood Machine (NRLM)

Question. What are the steps taken by the government to remove poverty in India?
Answer: The government’s approach to poverty reduction has three dimensions:
• Growth Oriented Approach
• Poverty Alleviation Programmes
• Minimum Needs Programme

Question. Name some of the Poverty Alleviation Programmes initiated by the government of India
Answer: There are two types of Poverty Elevation Programmes in India.
3. Self-Employment Programmes
• Rural Employment Generation Programme (REGP)
• Prime Minister Rozgar Yojana (PMRY)
• Swarna Jayanti Shahri Rozgar Yojana (SJSRY)
• Swarn jayanti Gram Swarozgar Yojana (SGSY)
4. Wage Employment Programme
• Sampoorna Grameena Rozgar Yojana (SGRY)
• National Food for Work Programme (NFFWP)

Question. What is the criticism against the Poverty Alleviation Programmes (PAPs)
Answer: The Poverty Alleviation Programmes have been found unsatisfactory because of the following reasons
• Lack of Resources
• Un-equal distribution of income and wealth
• Improper implementation
• Lack of active Participation of poor people

Question. Write a short note on “Minimum Needs Programme”
Answer: • It has been initiated from the fifth five year plan
• It aims to provide minimum basic amenities to the people
• To create employment opportunities and bring improvements in health and education
• Three major Programmes that aim at improving the food and nutrition status of the poor
• Public Distribution System (PDS)
• Integrated Child Development Scheme (ICDS)
• Mid-Day meals Scheme

Question. How can creation of income earning assets ad-dress the problem of poverty?
Answer: Creation of income generating assets implies re-sources like land, social networks which encourage empowerment and community services, fixed public assets like wells, clinics, schools, bridges which generate employment. The access to these assets and their use serves as a foundation for earning a livelihood.
Rural households in a traditional Indian society produce their own food and diversify their pro-duction activities in every possible way to ensure earning potential. Giving the land which is viable rising a livelihood for such people.

Question. How has horticulture encouraged Indian rural development?
Answer: Horticulture plays an important role in providing crops for nutrition and food, besides addressing employment concerns. It gives employment to around 19% of the total labour force. It has become a means of improving livelihood for many women and unprivileged classes too. Flower harvesting, nursery maintenance, hybrid seed production and tissue culture, propagation of fruits and flowers and food processing give employment and remunerative options for women in rural areas.

Question. ‘It is not possible to eradicate poverty com-pletely’. Do you agree?
Answer: No, I do not agree, that it is not possible to eradi-cate poverty completely. In the world as a whole there are plenty of resources to produce food but still there is hunger. Poverty in the present day world is more of a question of ill distribution. It is possible to eradicate poverty completely by complete re-distribution of existing resources and incomes.

Question. Explain the role of micro-credit in meeting credit requirement of the poor.
Answer: Micro-credit plays an important role in meeting the credit requirements of the poor. Under micro-credit programmes, farmers get adequate credit at cheaper rates. Micro-credit programme promotes thrift in small proportions by a minimum contribution from each member. From the pooled money, credit is given to the needy members which is repayable in small instalments at reasonable interest rates. Micro-credit programme abandons the need of any kind of collateral. It also helps in women empowerment.

Question. Information technology plays a very significant role in achieving sustainable development and food security, comment.
Answer: (i) Information Technology (IT) plays a very significant role in achieving sustainable development and food security. IT enables to provide and store data related to the post and future conditions providing inputs for policy decision and for adopting various corrective measures. For example, with the help of IT, weather conditions can be forecasted. If, for example, there is a probability of crop failure, then preventive measures can be taken to avoid or mitigate the impact of food insecurity. (ii) Information technology facilitates the storage and dissemination of information on emerging technologies, weather and soil conditions for growing various crops, etc, which ease the decision- making process vis-a-vis production and productivity. (iii) Now-a-days, the farmers can consult Kisan Call Centres and various websites providing valuable information regarding measures to improve farm productivity and quality of farm inputs, seeds, fertilizers and various modern techniques. It acts as a tool for identifying the experts on food security and sustainable development. IT sector also generates employment opportunities in the backward areas via developing ‘info Kiosk’ (i.e. PC with Internet, scanner, etc.) in the rural areas. Thus, it can be said that IT sector plays a vital role in assuring food security and sustainable development in India.

Question. Critically evaluate the role of the rural banking system in the process of rural development in India.
Answer: With the nationalisation of the commercial banks after 1969, the concept of social banking came into existence. It implies extending institutional credit at moderate rate of interests. The National Bank for Agricultural and Rural Development (NABARD) has made a significant progress in the field of rural credit. It cannot be denied that the institutional credit has freed the farmers from the trap of money lenders and mahajans. But, on the other hand, institutional credit is not free from deficiencies. The rural or institutional credit has been invariably associated with security or collateral. Consequently, a substantial number of farmers cannot avail credit. Also, the commercial banks have failed to encourage the habit of thrift among farmers. In addition to this, the leniency on the part of the government to collect taxes was another setback in the rural banking. This further led to the emergence of the feeling among the farmers of not repaying the borrowed amount. This increased the defaulter’s rate and led to financial unfeasibility for the rural banks.

Question. Is accelerated growth a sufficient condition to ensure removal of poverty within a reasonable period?
Answer: Although accelerated growth is a necessary condi-tion to ensure removal of poverty, it is not sufficient condition for removal of poverty. It is very important that accelerated growth should be accompanied by levelling up of income i.e., fruits of growth must flow towards the poorer sections of the society i.e., additional income generated should not be cornered by already rich persons.

Question. What is organic farming and how does it promote sustainable development ?
Answer: (i) Organic farming refers to a system of farming that sustains and enhances the ecological balance. In other words, this system of farming relies upon the use of organic inputs for cultivation. (ii) The traditional farming involves the use of chemical fertilisers, toxic pesticides, etc. that harms the eco-system drastically. So, this type of farming is practiced to produce toxic-free food for the consumers while simultaneously maintaining the fertility of the soil and contributing to ecological balance. (iii) This type of farming enables eco-friendly sustainable economic development.

Question. Explain Prime Minister Employment Generation Programme (PMEGP) for poverty eradication.
Answer: This programme was introduced on August 15, 2008. Two employment generation Programmes have been merged in It : (i) Prime Minister Rozgar Yojna (PMRY).
(ii) Rural Employment Generation Programme (REGP). Main objective : The main objective is to gener-ate new employment opportunities through micro enterprises.

Question. Write about the causes of poverty in India?
Answer: The main causes of poverty in India are as follows:
(i) Slow economic growth rate : Economic growth rate during plan period was only 4.1 % whereas, population growth rate was around 1.9 % per annum. So, real per capita income increased by 1.7 % per annum. As a result, purchasing power of the people declined.
(ii) Increase in population : In India, population is increasing continuously. As a result, despite higher rate of increase in national income, per capita income is not increasing to a desired level.
(iii) Increase in unemployment : Poverty increases with the increase in unemployment. Despite best efforts made by government of India during five year plans, unemployment increased continuously. 
(iv) Backwardness of Indian agriculture : Indian agriculture is backward. So, agriculture productivity in India is lower in comparison to developed countries. As a result, most of the Indian people are living below poverty line.

Question. What are the alternative channels available for agriculture marketing? Give some examples.
Answer: The small and marginal farmers, selling their product through the middlemen, were exploited by these middlemen. The farmers were not given appropriate price for their product. In this context, there arose a need for an alternative marketing channels. Under this channel, the farmers can sell their product directly to the consumers that would fetch them comparatively higher price, thereby getting attractive profits. Some of the examples of alternative agricultural marketing are Apni Mandi in states like Punjab, Haryana and Rajasthan, Hadaspar Mandi in Pune, Rythu Bazars in Andhra Pradesh, Uzhavar Sandies in Tamilnadu. Another alternative channel for agricultural marketing is the contract of direct sales between the farmers and the national and international companies. These companies offer advance payments to the farmers for supplying products at predetermined rates. These alternative agricultural channels raise farmer’s income and simultaneously reduce price risk for the small and marginal farmers.

Question. Write about the various crops and production under diversification of agriculture ?
Answer: Various crops and production under diversification of agriculture are as follows : (i) Food grains : The production of food grains was increasing in India continuously during the plan period. India had a second place in the production of wheat and rice in the world. In 2017-18 the total food grain production in India was 284.83 million tonnes. There is a need to achieve the target of 285.2 million tonnes to remove the poverty. 1 (ii) Commercial crops : In India, the production of commercial crops is also rising continuously India has a second place in producing sugarcane and third place in producing cotton in the world. 1 (iii) Horticulture : There is a continuous increase in the production of fruits and vegetables in India. India has first place in vegetables and second place in producing fruits in the world. After the adoption of new economic policy, horticulture production has increased rapidly. (iv) Floriculture : After new economic policy the production of flowers is rising much. The exports of flowers are also increasing. Flowers worth 78.73 million dollar have been exported in 2017-18.

Question. Mention some obstacles that hinder the mechanism of agricultural marketing.
Answer: Obstacles that hinder the mechanism of agricultural marketing are as follows : (i) More middlemen : There is a large number of middlemen between the farmers and the final consumers. Therefore, the middlemen get the maximum benefit but the farmers get the minimum. (ii) Lack of storage facilities : There is a lack of good storage facilities to the farmers to keep their produce safe. The storage facilities available in villages are very poor. About 10% to 20% of the produce is destroyed by rats. 1 (iii) Bad condition of rural transport : The transport conditions in rural areas are very bad. Most of the rural roads are not metalled. These are useless in rainy seasons. Even the rich farmers are not interested to carry their surplus produce to the mandis. 1 (iv) Lack of knowledge of the market : The farmers don’t have the knowledge of demand and supply of their produce in the market. They depend upon the information supplied by the intermediaries. This information is always in favour of mandis or market. As a result, the farmers cannot get reasonable price for their produce.

Question. What do you mean by rural development? Bring out the key issues in rural development.
Answer: Rural development is a comprehensive term which essentially focuses on action for the development of areas that are lagging behind in the overall development of the village economy. It is a process whereby the standard of living of rural people, especially poor people, rises continuously. Following are the key issues in rural development. (i) Development of the productive resources of each locality. (ii) Development of human resources including literacy, female literacy, education and skill development. (iii) Development of human resources like health, addressing both sanitation and public health. (iv) Honest implementation of land reforms.

Question. Suppose you are a resident of a village, suggest a few measures to tackle the problem of poverty.
Answer: Suggestions to remove rural poverty : (i) Gainful wages and self-employment opportunities for poor class. (ii) Minimum indirect tax on wage goods consumed by workers and progressive taxation on income and wealth. (iii) Ceiling on land holdings and surplus land for landless farmers with required amount of finance. (iv) Minimum wages should be guaranteed by Government to every worker. (v) Stringent measures against exploitation of child and women labour. (vi) Adequate expansion of free social service; health and education for rural and urban poor.
(vii) Increased output of wage goods to be made available for the poor at reasonable prices. (viii) Availability of cheaper credit for poor so as to create self-employment opportunities for them.

Question. What do you mean by institutional sources of credit ? Explain its objectives.
Answer: Agricultural credit is very important for the development of agriculture. Private money lenders were not sufficient to meet the required demand of the farmers. So after independence, multi-agency approach as an institutional credit was adopted in India. Multi-agency approach consists of co-operatives, commercial banks and regional rural banks. It is called national policy also. Main objectives of this policy are as follows : (i) To reduce the importance of money lenders and to abolish them gradually from rural areas. (ii) To reduce regional imbalances.

Question. Why is agricultural diversification essential for sustainable livelihoods ?
Answer: The agricultural diversification implies diversification of crop production and shifting of agricultural workforce to other allied activities such as livestock, poultry, fisheries, etc. and non-agricultural sector. The shift from the crop farming to non-farm employment is essential in order to raise income and to explore alternate avenues of sustainable livelihood. The importance of agricultural diversification can be explained as follows : (i) A substantial portion of Indian farming is dependent on the vagaries of monsoon, making it a risky affair to rely upon solely. Accordingly, the need for diversification is required to enable the farmers to earn from other alternative non-farm occupations. This lessens excess burden on agriculture by reducing disguised unemployment. (ii) The Kharif season opens up ample opportunities for agricultural employment. However, owing to lack of irrigation facilities, the farmers fail to get gainful employment opportunities during the Rabi season. Therefore, the need of diversification arises during the Rabi season.
(iii) Agriculture being over crowded cannot further generate employment opportunities. Therefore, the prospects of the non-farm sectors should be opened up in the rural areas to provide job opportunities, thereby, diverting workforce from the already crowded agricultural sector. The non-farm sector has several segments that possess dynamic linkages. Such linkages enhance the healthy growth of an economy.

Question. Why has rural banking not been able to give adequate credit to farmers?
Answer: Rural banking has not been able to give adequate credit to farmers. This is mainly due to lack of proper infrastructure and instruments to dispense credit to needy farmers. It has also failed to develop a culture of deposit mobilisation, lending to worthwhile borrowers and effective loan recovery. Agriculture loan default rates are also high with high incidence of overdue installments by the farmers.

Question. Explain the trend of institutional credit or features of institutional credit.
Answer: Features of institutional credit are as follows : (i) Institutional credit is more important than non-institutional credit. (ii) After nationalisation in 1969, banks are playing a very important role in household rural credit. In this regard co-operative societies are lagging behind. (iii) Institutional credit agencies are growing rapidly. Therefore, rural households for the credit are shifting towards these institutional agencies from non-institutional agencies. (iv) The interest on non-institutional credit is always higher in comparison to institutional credit. As a result, the burden of interest on the farmers tend to decline.

Question. Explain the steps taken by the government in developing rural markets.
Answer: Following are the steps taken by the government in developing rural markets : (i) The government collects market information relating to agricultural products through different media like radio, television, newspapers, etc. and make it available to farmers. (ii) It has made better transport arrangements to encourage farmers to carry their products to the market. (iii) It has provided warehousing and storage facilities in the villages. (iv) It has promoted co-operative marketing through several ways.

Question. What is meant by ‘food for work’ programme ?
Answer: The National Food for Work Programme was launched in November, 2004 in 150 most backward districts of the country, identified by the planning commission in consultation with the Ministry of Rural Development and the State Governments. The objective of the programme was to provide additional resources apart from the resources available under the Sampoorna Grameen Rozgar Yojana to 150 most backward districts of the country, so that generation of supplementary wage employment and providing of food security through creation of need based economic, social and community assets in these districts are further intensified. The scheme was 100% centrally sponsored and was open to all rural poor who were in need of wage employment and wanted to do manual and unskilled work. The focus of the programme was on work relating to water conservation, drought proofing and land development. Flood control/protection rural connectivity in terms of all-weather roads and any other similar activity for economic sustainability could be included. Food grains were given as part of wages under the NFFWP to the rural poor at the rate of 5 kg per man per day and the remaining portion may be given in cash. More than 5 kg food grains can be given to the labourers under this programme in exceptional cases subject to a minimum of 25 % of wages to be paid in cash. The programme has now been subsumed in National Rural Employment Guarantee Act, which has come in force in 200 identified districts of the country including 150 NFFWF districts.

Question. Enlist some problems faced by farmers during the initial years of organic farming.
Answer: The problem faced by farmers during the initial years of organic farming are : (i) Organic farming requires inputs like organic manure, bio-fertilizers and organic pesticides. Though they are cheaper to obtain, yet farmer find it difficult to get them. (ii) The yield from organic farming is much less than modern agricultural farming. (iii) The price of organic foods is high, so it is difficult to sell them. (iv) Organic products generally have more blemishes and shorter shelf life.

Question. Suppose you are from a poor family and you wish to get help from the government to set up a petty shop. Under which scheme, will you apply for assistance and why?
Answer: The scheme under which one has to apply in rural areas is Swarna Jayanti Gram Swarozgar Yojana (SJGSY). All the earlier self-employment generating programmes has now been re-designed and restruc-tured to improve their effectiveness and merged into a single programme (SJGSY) from 1st April, 1999. The objective of this scheme is to help the poor families to cross the poverty line by providing them income yielding assets through a mix of bank loans and government subsidies. If the shop is to be opened in urban area then one should apply under Swarnajayanti Shahari Rozgar Yojana (SJSRY) which seeks to provide self-employment to urban poor.

Question. It has been realised that agricultural finance is not available in sufficient quantity at right time and at reasonable rate of interest. As an agriculturist, suggest any two measures to make the existing system of agricultural finance serve fully the needs of agriculture effectively.
Answer: As an agriculturist, we would offer following suggestions to improve the existing system of agricultural finance. (i) The supply of finance should be fully institutional-ised and dependence on private or uninstitutional sources for credit should be eliminated. (ii) It should be ensured that finance is used for production. Loans can be given in the form as goods like seeds, fertilisers, etc.

Question. At the time of independence, moneylenders and traders exploited small and marginal farmers and landless labourers by lending to them on high interest rates and by manipulating the accounts to keep them in a debt-trap. A major change occurred after 1969 when India adopted social banking and multi agency approach to adequately meet the needs of rural credit. Can you highlight the major institutional sources of rural credit.
Answer: The main institutional sources of rural credit are: (i) Co-operative credit societies (ii) Commercial banks (iii) Regional rural banks (iv) National Bank for Agriculture and Rural Development (NABARD)

Question. Explain co-operative marketing societies.
Answer: These societies have been set up to improve agricultural marketing, The farmers make such societies themselves. In 1964, National Agricultural Co-operative Marketing Federation of India or NAFED was set up. The main objective of NAFED was to establish the co-ordination among co-operative societies. These societies have made much progress in the states of Punjab, Haryana, Maharashtra, Uttar Pradesh etc. The farmers get the following benefits from them : (i) Free from intermediaries. (ii) Reasonable price of the produce and loans on cheap rate of interest. (iii) Storage facilities (iv) Free from exploitation.

Question. What ii your opinion, is the lasting solution to the problem of poverty in India?
Answer. The lasting solution to the problem of poverty in India is to generate more and more opportunities of gainful employment in the economy. It is only when the people are gainful employed for longer periods of time that they are able to break the shackles (chain) of poverty. Measures such as food security for the people below poverty line or cash grants to the poor people will bring only short period relief from poverty; thjese measures cannot eradicate poverty.

Question. Explain the three-dimensional approaches adopted by government to alleviate poverty in India?
Answer. 
1. Growth-Oriented approach
2. Poverty Alleviation Programmes
3. Meeting Minimum Needs of the Poor

Question. Illustrate the difference between rural and urban poverty. Is it correct to say that poverty has shifted from rural to urban areas? Use the trend in poverty ratio to support your answer?
Answer. The Rural Poor – these include landless agricultural workers, marginal holders and tenants-at-will.
The Urban Poor—these include migrants from the rural areas in search of employment, casual factory workers and self-employed serving largely at street vendors.
Yes, it’s correct that poverty shifted from rural to urban areas, because the urban poor are largely the overflow of the rural poor who had migrated to urban areas in search of alternative employment and livelihood. Rural poor people always move towards urban areas whenever they didn’t find any job or work in any season in agriculture fields.
Shows poverty trends in different years related to poverty.

Long Answer Type Questions

Question. Identify the benefits and limitations of organic farming.
Answer: Benefits : (i) From environmental point of view : Organic farming helps in maintaining environmental health and reduces pollution. It ensures optimum utilization of resources for short term benefits and conserves them for future generations. It helps in improving soil’s physical properties and ultimately agricultural productivity. (ii) From productivity point of view : Organic farming ensures optimum productivity with no demand for costly inputs. It believes in sustainable productivity without any loss in future fertility. Besides, this farming promotes multiple cropping and reduces the risk of crop failure. (iii) From health point of view : Organic farming eliminates the risk of human and animal hazards by eliminating the chances of chemical residues. Products of this farming are nutritionally rich and balanced. (iv) From economic point of view : Organic farming is highly cost effective as it does not involve the use of purchased inputs like chemical fertilizers, pesticides, hormones etc. It ensures greater employment opportunities in small areas. Limitations : In this system, there is no use of chemical fertilizers, pesticides or other mixed inputs. Infact, these factors are harmful for the fertility of soil, human health, cattle wealth and environment.

Question. Illustrate the difference between rural and ur-ban poverty. Is it correct to say that poverty has shifted from rural to urban areas? Use the trends in poverty ratio to support your answer.
Answer: The difference between rural and urban poverty is mainly of the nature of poverty. The poor are identified on the basis of their occupation and ownership of assets. The rural poor work mainly as landless agricultural labourers, cultivators with very small land holdings, landless labourers who are engaged in a variety of non-agricultural jobs and tenant cultivators with small land holdings. On the other hand, the urban poor are largely the overflow of the rural poor who had migrated to urban areas in search of alternative employment and livelihood, labourers who do a variety of casual jobs and the self-employed who sell a variety of things on roadsides and are engaged in various activities. It can be seen from the given table show-ing the trends in poverty ratio which has shifted from rural to urban areas. 

It is evident from the above table that rate of decline in rural poverty is more than the rate of decline in Urban poverty. Moreover, the gap between the rural and urban poverty ratios which was around 18.3% in 1993-94 fell to around 12% in 2011-12, again signifying the shift in poverty from rural to urban areas.

Question. Write the measures to remove poverty in India ?
Answer: Poverty is a chronic malady. It has to be removed by making every kind of effort possible. (i) Control over population : Population control is the need of the hour. If rate of growth of per capita income becomes more than population growth rate, it will help to reduce the poverty. (ii) Higher rate of economic growth : Poverty can only be removed by raising economic growth rate in the country. It will raise the income resulting in increase in consumption expenditure. (iii) Minimum needs programme : Government should try to implement minimum needs programmes effectively. Every person should be provided with basic needs of life. (iv) Reduction in inequalities of income : Poverty removal is also possible through removal of inequalities of income. It will help in transferring income from asset owning persons to non-asset owning persons, known as trickle down effect. It will reduce the gap between rich and the poor. (v) Control over inflation : Government must adopt price control measures so that the standard of living of poor workers is not adversely affected. They must be given due compensation for price rise. 1 (vi) Social security measures : Industrial workers should be provided with adequate social security measures like pension, gratuity, maternity leave etc. It will improve the status of elderly industrial workers.

Question. Why are employment generation programmes important in poverty alleviation in India ?
Answer: The importance of employment generation programmes in poverty alleviation efforts in India are as follows : (i) Direct relationship between employment and poverty alleviation : There exists a positive relationship between employment and poverty alleviation. If government aims at creating new employment opportunities, then more people will be employed that will raise their income and, thus, will pull them above the poverty line. (ii) Higher standard of living : With the increase in income, consequent to the new employment opportunities, poverty ridden people can enjoy higher standard of living and greater accessibility to education, better health facilities, proper sanitation, etc. (iii) Reduce rural-urban migration : Poor people tend to migrate from rural to urban areas in sought of better employment and earning opportunities to these migrants. Failure of this leads to formation of informal sector that makes these people more vulnerable in the urban areas. A positive point of employment generation programmes is that it generates ample employment opportunities in rural areas so as to reduce rural-urban migration. (iv) Creation of durable assets : The employment generation programmes aim at creation of durable assets like watershed development works, water harvesting, irrigation facilities, canal building, construction of roads connecting rural areas to urban areas and construction of dams. All these assets play an important role in the social and economic development of the country. (v) Self-sufficiency and self-reliant areas : The creation of these durable assets protects the poverty-ridden areas from natural calamities such as floods and droughts, thereby facilitating these areas to be self-sufficient and self-reliant.
(vi) Impart and enhance skills : Most of the employment generation programmes help in human capital formation by enhancing knowledge and imparting skills to the unskilled labourers. Such skills increase the employment prospects of the unskilled labourers in the industrial and the service sectors. This not only enhances income-earning capacities of these people but also alleviates poverty simultaneously.

Question. State the various measures to make the existing system serve fully the needs of agriculture.
Answer: Following are the various measures to make the existing system serve fully the needs of agriculture: (i) The supply of finance should be fully institutionalised and dependence on private sources for credit should be eliminated. (ii) The interest rate should be low in general. The banks should charge different rates for different uses. (iii) The basis of credit should not be mortgage of any security. Production or productivity of land should be the basis for the approval of loans. (iv) The conditions of repayment of loans should be different so as to suit different circumstances. (v) It should be ensured that finance is used for production. Loans can be given in the form of goods like seeds, fertilisers, etc. (vi) There should be adequately trained and devoted personnel to manage the financial institutions. The persons should have full knowledge of agriculture and interest of farmers. The person should be able to guide the farmers how to use he loan systematically.

Question. Write about the problems of agricultural marketing ?
Answer: Problems of agricultural marketing are as follows: (i) Distress sales : Most of the farmers are poor and indebted. They can’t wait to get higher prices. They want to clear their debts. So, they are compelled to sell their surplus produce to the rural moneylenders or traders at lower prices. It is called distress sale. It makes the conditions of the farmers weak. (ii) More middlemen : There are a large number of middlemen between the farmers and the final consumers. Therefore, the middlemen get the maximum benefit but the farmers get the minimum. (iii) Lack of storage facilities : There is a lack of good storage facilities to the farmers to keep their produce safe. The storage facilities available in villages are very poor. About 10% to 20% of the produce is destroyed by rats. (iv) Bad condition of rural transport : The transport condition in rural areas is very bad. Most of the rural roads are not metalled. These are useless in rainy seasons. Even the rich farmers are not interested in carrying their surplus produce to the mandis. (v) Malpractices : In mandis, the farmers take the services of brokers. The brokers and ‘arthatiya’ bargain through a coded language. The brokers are always in contact with the arthatiya. So, the brokers are always in favour of arthatiya when the price is fixed. (vi) Lack of knowledge of the market : The farmers don’t have the knowledge of demand and supply of their produce in the market. They depend upon the information supplied by the intermediaries. This information is always in favour of mandis or market. As a result the farmers can’t get reasonable price for their produce.

Question. The three dimensional attack on poverty adopted by the government has not succeeded in poverty alleviation in India. Comment.
Answer: In order to alleviate poverty, government has adopted the following three dimensional approaches: (i) Trickle down approach : This approach is based on the expectation that the positive effects of economic growth will be trickled down or benefit all sections of the society and also the poor people. (ii) Poverty alleviation approach : This approach aimed at the creation of income-earning assets and employment generation opportunities. (iii) Providing basic amenities : This approach aimed at providing the basic amenities like proper medical and health care facilities, better education, proper sanitation etc. to the poor people. The basic amenities positively affect health, productivity, income earning opportunities and, there by, alleviate poverty. A thorough analysis of the three dimensional approach yields the following conclusions : (i) Although there has been a reduction in the percentage of absolute poor in some of the states but still the poor people lack basic amenities, literacy and nourishment Secondly, there has not been significant change in the ownership of income-earning assets and productive resources. (ii) Land reforms do not have high successful records that further added to the inequality of income from land. 1 (iii) Improper implementation of poverty alleviation programmes by ill-motivated and inadequately trained bureaucrats further worsened the situation. Corruption along with the inclination towards interest of elites led to an inefficient and misallocation of scarce resources.

Question. Write down the causes of rural indebtedness in India ?
Answer: The main causes are as under : (i) Poverty : In fact, annual income of the farmers is very low. So, they always live below poverty line. They have to borrow money for many purposes. (ii) Unproductive expenditure : Most of the farmers borrow to celebrate social customs like marriages, religious festivals, etc. Births and deaths also lead to unproductive expenditure. (iii) Litigation : The farmers borrow for litigation also. Litigation is always very expensive which adds to the problem of indebtedness. (iv) To make improvement on land : The farmers mostly borrow to make improvement on land. It is a positive thinking but it needs to be done by saving and not by borrowing. (v) Inherited debt : It is called ancestral debt also. A farmer also inherits the debts of his father along with the land. It contributes a lot in rural indebtedness. (vi) Illiteracy : The farmers are illiterate. The moneylenders encourage the farmers to borrow. They make a plan to mortgage their land. They charge higher rate of interest. The farmers are unable to repay the debt. Ultimately they take away the land of the farmers.

Question. Write about the government efforts to improve agricultural marketing ?
Answer: Government efforts are as follows : (i) To set up regulated markets : Regulated markets have been set up to improve the marketing of agricultural produce. In it, there is a control of market committee on the sale of agricultural produce. As a result, the malpractices have come to an end in the mandis. (ii) Storage facilities : Government had set up Central Warehousing Corporation in 1957. The main objective is to run and construct godowns and warehouses for the storage of agricultural produce. For the same purpose, the state governments have also set up State Warehousing Corporations. Godowns have been established at mandi level and village level. In the beginning of the 10th plan, the storage capacity of all the agencies was 702 lakh tonnes. (iii) Grading and Standardisation : Agricultural Produce (Grading and Marketing) Act was implemented in 1937. Under this act, government has established grading stations for goods like flour, ghee, eggs. etc. AGMARK stamp of the department of agricultural marketing is marked 153on the graded goods. There is a wide market of AGMARK goods. These goods are sold at higher prices. (iv) Quality control : Government has set central control quality laboratory at Nagpur. Eight other regional laboratories have also been established in various parts of the country. The main objective is to test the quality and purity of agricultural goods. In this way, quality control is being given due importance. (v) Provision of finance : Financial facilities have been developed in rural areas. Many public agencies are providing sufficient financial facilities to the farmers. (vi) Marketing surveys : Government has undertaken market surveys of different goods from time to time. It has published its report also. These surveys find out the problem relating to the marketing of agricultural goods. They play a very important role to solve these problems also.

Question. Explain the role of non-farm employment in promoting rural diversification?
Answer: The non-form areas of employment are essential with a view to raise income and exploring alternative avenues of sustainable livelihood besides agriculture. The following are the importance of non-farm employment opportunities in promoting rural diversification : (i) A substantial portion of Indian farming is dependent on the vagaries of monsoon, making it is a risky affair to rely upon solely. Hence, non-farm employment opportunities are to be explored to enable the farmers to earn from alternative non-farm occupations. This will lessen the excess burden on agriculture by reducing disguised unemployment. (ii) The Kharif season opens up ample opportunities for agricultural employment. However, due to lack of irrigation facilities, the farmers fail to get gainful employment opportunities during the Rabi season. Therefore, absence of opportunities in agricultural sector should be compensated in non-farm sectors. (iii) Agriculture being overcrowded cannot further generate employment opportunities to the farmers, Therefore, the prospects of the non-farm sectors should be opened up in the rural areas to provide job opportunities, thereby, diverting workforce from the already crowded agricultural sector. (iv) The non-farming sector has several segments that have dynamic linkages. Such linkages enhance the healthy growth of the rural areas. (v) The non-farm sector provides employment opportunities for the whole year as compared to the farming occupation. So, it helps to eradicate poverty from the rural areas. (vi) Most of the output of non-farm sectors acts as input for the large scale industries. For example, agro processing industries, food processing industries, leather industry, tourism, etc. This has two-fold benefits. First, the large scale industries can specialise in their final output by relying on the processed inputs from the non-farm sectors. Secondly, such dependence of the large scale industries provides impetus to the non-farm sectors reducing the urban-rural regional disparities.

 

 

1. Define absolute poverty.

 

2. -------- poor is the poor in comparison with other’s income

 

3. Mahatma Gandhi national rural employment guarantee Act passed in

a) 1991    b) 2004    c ) 2005   d) 2015

 

4. The churning poor are the people whose income lies:

A. Usually lies above the poverty line.

B. Regularly move in and out of the poverty line.

C. Always lies below the poverty line.

D. Usually lies below the poverty line.

 

5. Giving reasons state whether the following statement is true or false. “The concept ‘Poverty line’ clearly differentiates between the very poor who need immediate care from the government and the other poor”. (True/False)

 

6. Name the economist who estimated poverty in pre independent India

 

7. Identify the pair of matching item from the following.

A. Head Count Ratio     The number of poor estimated as the proportion of total population

B. Churning Poor          People who may sometimes get little more income above the poverty line.

C. Planning commission   Introduced the concept of poverty line in India for the first time

D. Poverty Gap Index      An alternative method of estimation of poverty introduced by Dr. Amartya Sen.

 

8. Which of the following programme address the problem of elderly men and widows?

a) ICDS   b) Jan Dhan Yojna   c) National social Assistance    d) PMRY

 

9. ------------- is an example of microcredit programme

 

 

10.Compare the basic nature of ‘Rural Poverty’ and ‘Urban Poverty’.

 

11. How did the ‘British Rule’ contribute to poverty in India?

 

12.What are the major problems involved in the mechanism of fixing poverty line?

 

13. Is there any relationship between unemployment and poverty? Explain.

 

14. State the major causes of poverty both at individual level and at general level?

 

15. Write a short note on Food for work programme.

 

 

16.Despite a verity of programmes and schemes to alleviate poverty: hunger,malnourishment, illiteracy, etc. continue to be a common feature in many parts of India. Explain the reason. Explain the three dimensional attack on poverty in India.