In Class IX students come across Economics which is an important subject not just from the exam point of view but also from the perspective of a citizen. It’s very crucial to be aware of what’s happening in the economic sector of our country. Economics is a wide and complex subject, in Class IX students only learn about the basics of the economy such as market, poverty, health, education, globalization & measures to improve them. This forms their foundation for further economics studies.
Q1. Describe how poverty line is estimated in India.
Ans: A common method used to measure poverty is based on income or consumption levels. A person is considered poor if his or her income or consumption level falls below a given minimum level necessary to fulfill consumption needs.
(a) While determining the poverty line in India, a minimum level of food requirement, clothing, footwear, fuel and light educational and medical requirement etc are determined for subsistence. These physical quantities are multiplied by their price in rupees.
(b) The present formula for food requirement while estimating the poverty line is based on the desired calorie requirement.
(c) Food items such a cereals, pulses; vegetables, milk, oil, sugar etc together provide these needed calories. The need of calories depends on age and the work done by a person.
(d) The accepted average calorie requirement in India is 2400 calories per person per day in rural areas and 2100 calories per person per day in urban areas.
(e) The calorie requirement of the people in rural areas is higher than that of the people living in urban areas because they do more physical work as compared to urban people.
(f) On the basis of these calculations for the year 2011-12, the poverty line for a person was fixed at Rs. 816 per month for the rural areas and Rs.1000per month for the urban areas.
Despite less calorie requirement, the higher amount for urban areas is because of the high prices of many essential products in urban centers.
Q2. Do you think the present methodology of poverty estimation is appropriate?
Ans: No, the present methodology of poverty estimation is inappropriate because it takes into account only the basic needs of food, clothing, fuel, etc. But the quality of these basic necessities is the lowest quality available, which is not appropriate.
(a) The amount which is fixed as the poverty line does not include the margin for price fluctuations and price rise which is constantly occurring.
(b) The poverty line should include some correction for inflation and to take care of the market fluctuations.
Q3. Describe the poverty trends in India since 1973.
Ans: There was a substantial decline in poverty ratios in India from about 55 % in 1973 to 36 % in 1993.
(a) The proportion of people below the poverty line further came down to about 26 % in 2000.
(b) If the trend continues, people below poverty line may come down to less than 20 % in the next few years.
(c) Although the percentage of the people living under poverty declined in the earlier two decades (1973-1993) the number of poor remained stable around 320 million for a fairly long period.
(d) The latest estimates indicate a significant reduction in the number of poor to about 260 million.
Q4. Discuss the major reasons for poverty in India.
Ans: The various causes of poverty in India are Colonial Economic Policies
(a) One historical reason of poverty in India is the low level of economic development under the British colonial administration
(b) The policies of the colonial government ruined traditional handicrafts and discouraged developments of industries and textiles.
(c) The low rate of growth persisted until the 1980s. This resulted in fewer job opportunities and low growth rate of incomes.
(d) The government failure on both fronts, i.e.Promotion of economic growth and population control perpetuated the cycle of poverty
Not Enough Jobs in Industries
The Industries set up in the public and private sector provided jobs to many people but the number of job seekers was far more than tile jobs available and a large number of people remained unemployed leading to poverty.
Revolution and Employment
(a) The Green Revolution enabled multiple cropping or growing of 2 to 3 crops in, year, which created demand for labor in the agriculture sector. However, the Green Revolution was limited mainly to Punjab, Haryana and Western Uttar Pradesh and provided limited opportunities of work.
(b) The poor farmers could not buy inputs for farming and landholdings were small. Thus their production was low and the poor peasant families could hardly survive.
(c) The poor, especially in rural areas had to take loans for farming inputs and many times were unable to repay the loan. Thus they fell into a debt trap, leading to a worse situation.
(d) Another cause of poverty has been the huge income inequalities. One of the major reasons for this is the unequal distribution of land and other resources.
(e) Many communities like the Dalits, scheduled castes and scheduled tribes had traditionally been deprived of education, land and social status. Consequently, they have not been able to raise their standard of living in the absence of education, land and other resources.
(f) To fulfill social obligations and observe religious ceremonies, people in India including the very poor, spend a lot of money. They hardly have any savings, so they borrow money and are unable to repay the loans because of low income, thus falling into a debt trap leading to extreme poverty.
(g) Small farmers need money to buy agricultural inputs like seeds fertilizers, pesticides etc tor which they have to take loans which they are unable to repay, thus tailing into a debt trap leading to extreme poverty.
Q5. Identify the economic and social groups which are most vulnerable to poverty in India.
(a) The social groups which are most vulnerable to poverty are scheduled caste and scheduled tribe households.
(b) Similarly, among the economic groups, the most vulnerable groups are the rural agricultural labour households and urban casual labour households.
Q6. Give an account of interstate disparties of poverty in India.
Ans: (a) The proportion of poor people is not the same in every state.
(b) Government has made many efforts to reduce poverty by following various programmers but the success rate of reducing poverty is different in different states.
(c) In 20 states and union territories, the poverty ratio is less than the national average.
(d) Poverty is still a serious problem in Orissa, Bihar, Assam, Tripura and Uttar Pradesh.
(e) Orissa and Bihar continue to be the two poorest states with poverty ratios of 47% and 43 % respectively.
(f) There has been a significant decline in poverty in Kerala, Jammu & Kashmir, Andhra Pradesh, Tamil Nadu, Gujarat & West Bengal.
(g) States like Punjab and Haryana have traditionally succeeded in reducing poverty with the help of agricultural growth rates.
(h) In West Bengal, land reform measures have helped in reducing poverty.
(i) In Andhra Pradesh and Tamil Nadu, public distribution of food grains has been responsible for the reduction of poverty
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