50 MCQs on Poverty and Unemployment for UPSC, APPSC, TGPSC and other PSC exams

Underemployment occurs when workers are employed below their capacity – either working fewer hours than desired (visible underemployment) or in jobs below their skill level (invisible underemployment). A PhD holder working as clerk is underemployed. It represents inefficient utilization of human resources.

Self-employed workers constitute approximately 52-55% of India’s workforce as per PLFS data. This includes own account workers employers and unpaid helpers in household enterprises. Agriculture has highest proportion of self-employed. Regular wage/salaried workers constitute only about 21-24%.

Northeastern states and Himachal Pradesh have highest female LFPR in India. States like Himachal Pradesh Sikkim Nagaland and Meghalaya consistently show female LFPR above 50%. Southern states like Andhra Pradesh and Tamil Nadu also have relatively higher female LFPR compared to northern states.

Absolute Poverty is defined in terms of the minimum level of living standards based on basic physical needs like food shelter and clothing. It is measured against a fixed poverty line based on minimum consumption expenditure. This concept was used by the World Bank with $1.90 per day threshold (now $2.15).

The Global MPI is published jointly by the Oxford Poverty and Human Development Initiative (OPHI) and the United Nations Development Programme (UNDP). In India NITI Aayog publishes the National MPI using similar methodology with data from NFHS surveys.

Rangarajan Committee estimated poverty ratio at 29.5% for 2011-12 which was significantly higher than Tendulkar Committee’s estimate of 21.9%. This meant approximately 36.3 crore people were below poverty line as per Rangarajan methodology compared to 27 crore by Tendulkar.

National Career Service Portal launched in 2015 is a one-stop solution providing employment services including job matching career counseling skill development courses and information on government schemes. It connects job seekers employers training providers and career counselors on a single digital platform.

NITI Aayog is the nodal agency for monitoring the Multidimensional Poverty Index (MPI) in India. NITI Aayog has constituted an MPI Coordination Committee (MPICC) and publishes India’s National MPI using NFHS data. The baseline report was published in 2021 using NFHS-4 data.

Disguised unemployment is most prevalent in Indian agriculture due to small and fragmented landholdings and family-based farming. Too many family members work on small farms where fewer workers could produce the same output. This is also called hidden or invisible unemployment.

As per MPI methodology a person is identified as multidimensionally poor if they are deprived in at least one-third (33.33%) of the weighted indicators. Those deprived in 20-33% are considered vulnerable to poverty. Those deprived in more than 50% are in severe multidimensional poverty.

Ministry of Skill Development and Entrepreneurship (MSDE) established in 2014 is responsible for implementing Skill India Mission including PMKVY. National Skill Development Corporation (NSDC) is the implementing agency. The ministry coordinates all skill development efforts across sectors.

MUDRA (Micro Units Development and Refinance Agency) provides loans to small businesses but is primarily a credit scheme not directly an employment generation program. MGNREGA PMEGP and NRLM are direct employment generation and livelihood programs.

Worker Population Ratio is the percentage of employed persons in the total population. It indicates what proportion of population is actually working and contributing to economic output. WPR = (Number of Employed Persons / Total Population) x 100. It is lower than LFPR as it excludes unemployed.

NFSA 2013 covers approximately 75% of rural population and 50% of urban population totaling about 67% (two-thirds) of India’s population. Eligible households receive 5 kg of food grains per person per month at subsidized prices of Rs 3/2/1 per kg for rice/wheat/coarse grains.

India’s poverty line is based on calorie consumption approach. The Planning Commission originally defined poverty line as minimum calorie intake – 2400 calories per person per day in rural areas and 2100 calories in urban areas. Later committees modified this approach with different consumption baskets.

Tendulkar Committee estimated poverty line at Rs 816 per capita per month for rural areas and Rs 1000 for urban areas in 2011-12. This implied daily expenditure of about Rs 27 in rural and Rs 33 in urban areas which was criticized as being too low.

Informal sector employment accounts for approximately 80-90% of total employment in India. The informal or unorganized sector includes self-employed unpaid family workers and workers in unregistered enterprises. Only about 10-20% workers are in formal sector with social security benefits.

Seasonal unemployment occurs in industries and occupations where work is available only during certain seasons. Agriculture in India is highly seasonal with employment during sowing and harvesting seasons but unemployment during off-seasons. Sugar mills brick kilns and ice factories also show seasonal patterns.

India’s demographic dividend window is expected to last until 2055-2060 after which the proportion of elderly will increase. India is relatively late entrant to demographic transition compared to East Asian countries. The challenge is to create productive employment and skill the workforce before window closes.

As per PLFS Annual Report 2023-24 India’s unemployment rate in usual status for persons 15 years and above was approximately 3.2%. Urban unemployment was higher at 5.4% compared to rural at 2.6%. There has been declining trend in unemployment from 6.0% in 2017-18 to 3.2% in 2023-24.

Current Weekly Status determines activity status based on reference period of 7 days preceding the survey date. It captures short-term fluctuations in employment and unemployment. CWS unemployment is typically higher than usual status as it captures weekly variations including seasonal unemployment.

According to NITI Aayog India’s multidimensional poverty declined from 29.17% in 2013-14 to 11.28% in 2022-23. NITI Aayog projected India to reach single-digit poverty levels by 2024. This decline was faster in rural areas where poverty fell from 32.59% to 19.28%.

Usual Status (also called Principal Status) determines activity status based on reference period of 365 days preceding the survey. A person is classified based on major time spent during the year. It captures long-term employment situation. ps+ss means principal status plus subsidiary status.

Cyclical unemployment is caused by business cycle fluctuations – it rises during economic recession when aggregate demand falls and decreases during economic expansion. It is also called demand-deficient unemployment. Keynesian economics focuses on addressing cyclical unemployment through demand management.

MGNREGA focuses on unskilled manual work not skilled employment. Key features include 100 days guaranteed employment demand-driven scheme wages linked to CPI-AL unemployment allowance if work not provided within 15 days one-third women participation and focus on water conservation and rural infrastructure.

Antyodaya Anna Yojana launched in 2000 provides highly subsidized food grains to the poorest of the poor families identified from BPL category. AAY families receive 35 kg of food grains per month at Rs 2 per kg for wheat and Rs 3 per kg for rice. It targets the bottom 5 crore families.

The Rangarajan Committee headed by C. Rangarajan used separate consumption baskets for rural and urban areas unlike Tendulkar’s uniform basket. It estimated higher poverty line of Rs 972 for rural and Rs 1407 for urban areas per capita per month. It estimated 29.5% poverty in 2011-12 higher than Tendulkar’s 21.9%.

As per NITI Aayog’s Discussion Paper on Multidimensional Poverty released in 2024 approximately 24.82 crore (248.2 million) people escaped multidimensional poverty between 2013-14 and 2022-23. This remarkable reduction was attributed to government schemes addressing health education and living standards.

Unemployment Rate is the percentage of unemployed persons among the persons in the labour force (not total population). UR = (Unemployed / Labour Force) x 100. Labour force includes both employed and unemployed. A person is unemployed if seeking or available for work but not employed.

Relative Poverty is defined in comparison to the average standard of living in a society. A person is relatively poor if their income is significantly below the median or mean income of the society. This concept is more relevant in developed countries where absolute poverty is rare.

Structural unemployment occurs due to mismatch between skills of workers and requirements of available jobs. It results from fundamental changes in economy like technological advancement decline of industries or shift in demand patterns. Retraining and skill development are needed to address it.

Skill India Mission including Pradhan Mantri Kaushal Vikas Yojana (PMKVY) was launched on 15th July 2015 (World Youth Skills Day). It aims to train over 40 crore people in different skills by 2022. Ministry of Skill Development and Entrepreneurship implements this mission.

The Tendulkar Committee headed by Suresh Tendulkar shifted from calorie-based to mixed reference period consumption expenditure. It included spending on health and education in the poverty line. It also recommended uniform poverty line basket for rural and urban areas eliminating calorie norm differentiation.

PLFS is conducted by the National Statistical Office (NSO) under Ministry of Statistics and Programme Implementation (MoSPI). It was launched in April 2017 to provide more frequent labor force data than the quinquennial Employment-Unemployment Surveys conducted earlier by NSSO.

Open unemployment refers to a situation where workers are willing and able to work at prevailing wages but cannot find employment. They are visibly without jobs and actively seeking work. This is measured through surveys and is common in urban areas especially among educated youth.

The original poverty line methodology defined by the Planning Commission set minimum calorie requirement at 2400 calories per person per day for rural areas and 2100 calories for urban areas. Rural areas required higher calories due to more physical labor in agriculture and related activities.

GHI uses four indicators: proportion of undernourished in population prevalence of wasting in children under 5 prevalence of stunting in children under 5 and under-5 mortality rate. Literacy rate is NOT used in GHI though it is used in Human Development Index.

PMEGP is implemented by Khadi and Village Industries Commission (KVIC) at national level. At state level it is implemented by State KVIC Directorates State Khadi Boards and District Industries Centres. It provides credit-linked subsidy for setting up micro-enterprises.

The Lakdawala Committee headed by D.T. Lakdawala recommended state-specific poverty lines based on Consumer Expenditure Surveys conducted by NSSO. It suggested using state-level price indices (Consumer Price Index for Industrial Workers for urban and CPI for Agricultural Labourers for rural) instead of national poverty line.

The Periodic Labour Force Survey (PLFS) was launched by NSO in April 2017 to estimate key employment and unemployment indicators at more frequent intervals. It provides quarterly estimates for urban areas and annual estimates for both rural and urban areas replacing the five-yearly Employment-Unemployment Surveys.

Disguised unemployment occurs when more workers are engaged in a job than actually required. The marginal productivity of additional workers is zero or negligible. Removing some workers would not reduce total output. This is common in Indian agriculture where family members work on small farms regardless of actual need.

MGNREGA enacted in 2005 guarantees 100 days of wage employment per year to every rural household whose adult members volunteer to do unskilled manual work. Wages are linked to CPI-AL. If employment is not provided within 15 days unemployment allowance must be paid.

Demographic dividend refers to economic growth potential arising when the proportion of working-age population (15-64 years) is higher than dependent population (children and elderly). India is experiencing this window of opportunity with 65% population in working age. It can accelerate growth if workforce is skilled and employed.

MPI measures poverty across three equally weighted dimensions: Health (nutrition and child mortality) Education (years of schooling and school attendance) and Standard of Living (cooking fuel sanitation drinking water electricity housing and assets). India’s National MPI uses 12 indicators across these dimensions.

Global Hunger Index is published jointly by Concern Worldwide (Ireland) and Welthungerhilfe (Germany). India’s rank has been criticized as being based on unreliable data and methodology. GHI uses four indicators: undernourishment child stunting child wasting and child mortality.

Frictional unemployment is temporary unemployment occurring when workers are transitioning between jobs searching for better opportunities or entering labor force for first time. It exists even in full employment economy as workers take time to find suitable jobs. It is voluntary and short-term.

Bihar had the highest MPI value in NFHS-4 (2015-16) indicating highest multidimensional poverty. However Bihar also showed the largest decline in headcount ratio between NFHS-4 and NFHS-5. Uttar Pradesh had the largest absolute number of poor people with 3.43 crore escaping poverty.

As per PLFS 2023-24 female LFPR in India for persons 15 years and above was approximately 41.7% in usual status showing significant improvement from 23.3% in 2017-18. However it remains much lower than male LFPR of 78.8%. Rural female LFPR is higher than urban female LFPR.

MPI has only three dimensions: Health Education and Standard of Living. Income is NOT a separate dimension in MPI. This is the key difference from monetary poverty measures – MPI captures deprivations that income measures miss like access to sanitation clean fuel and education.

LFPR is the percentage of population (usually 15 years and above) that is in the labour force i.e. either working (employed) or seeking/available for work (unemployed). It indicates the proportion of population actively participating in economic activities. LFPR excludes students homemakers retired persons etc.