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Poverty & Unemployment (Part – II)

📆 October 19, 2024

Total Questions: 54

21. Who has determined the poverty-line, Rs. 32/- per day, per person consumption expenditure for rural area and Rs. 47/- per day, per person consumption for urban area in India? [Chhattisgarh P.C.S. (Pre) 2016]

Correct Answer: (b) Prof. C. Rangarajan Committee
Solution:Due to widespread criticism of Tendulkar Committee approach as well as due to changing times and aspirations of people of India, another committee for poverty estimation was set up in 2012 under the Chairmanship of Prof. C. Rangarajan. Rangarajan committee submitted its report in June 2014. It recommended separate consumption basket for rural and urban areas which include food items that ensure recommended calorie, protein and fat intake and non- food items like clothing, education, health, housing and transport. This committee raised the daily per capita expenditure to Rs. 47 for urban and Rs. 32 for rural from Rs. 32 and Rs. 26 respectively (as recommended by Tendulkar Committee) at 2011-12 prices for the poverty line. Monthly per capita consumption expenditure of Rs. 972 in rural areas and Rs. 1407 in urban areas is recommended as the poverty line at all India level. However, the government did not take a call on the report of the Rangarajan Committee.

22. Which of the following is measured by the Lorenz curve? [U.P.P.C.S. (Pre) 2018]

Correct Answer: (d) Inequality of income
Solution:The Lorenz curve is a graphical representation of income inequality developed by American economist Dr. Max O. Lorenz in 1905. The Lorenz curve plots percentiles of the population on the horizontal axis according to income or wealth and cumulative income or wealth percentage on the vertical axis. It shows the proportion of income earned by any given percentage of population. The straight line at the 45° angle shows perfectly equal income distribution, while curve line shows the actual distribution of income. The extent to which the curve sags below perfect equality (diagonal) line indicates the degree of inequality of distribution.

23. Measures of distribution of income: [Chhattisgarh P.C.S. (Pre) 2018]

Correct Answer: (b) Lorenz Curve
Solution:The Lorenz curve is a graphical representation of the distribution of income or of wealth. It was developed by Dr. Max O. Lorenz in 1905 for representing inequality in wealth distribution.

24. Which of the following statements is/are correct regarding Gini coefficient? [Jharkhand P.C.S. (Pre) 2023]

I. It measures the level of income inequality in the society.

IL. Higher the Gini coefficient, lower the inequality.

III. It can be derived using the Lorenz curve.

Select the correct answer from the options given below:

Correct Answer: (b) I and III only
Solution:The Gini coefficient, also known as the Gini index or Gini ratio, is a measure of statistical dispersion intended to represent the income inequality, the wealth inequality, or the consumption inequality within a nation or a society. It was developed by Italian statistician and sociologist Corrado Gini. The Gini coefficient measures the inequality among the values of a frequency distribution, such as levels of income. The coefficient of the Gini index ranges from 0 (or 0%) to 1 (or 100%), with 0 representing perfect equality and 1 representing perfect inequality. It means higher the Gini coefficient, higher the inequality. It can be derived using the Lorenz curve. The Gini coefficient is equal to the area below the line of perfect equality minus the area below the Lorenz curve, divided by the area below the line of perfect equality. Hence, statements I and III are correct, while statement II is incorrect.

25. The idea of 'Cultural Poverty' was given by: [U.P.P.C.S. (Pre) 2020]

Correct Answer: (a) Oscar Lewis
Solution:The idea of 'Cultural Poverty' (or Culture of Poverty) was given by the American anthropologist Oscar Lewis. Lewis described the culture of poverty as a way of life, clusters of traits of some of poor people, that develop as an adaptation to living in poverty in a capitalist society, and from then are passed through generations.

26. The concept of 'Vicious Circle of Poverty' is related to: [U.P.P.C.S. (Pre) 2014]

Correct Answer: (b) Nurkse
Solution:Economist Prof. Ragnar Nurkse in his book, 'Problems of Capital Formation in Underdeveloped Countries' which was originally published in 1953, described the concept of "Vicious Circle of Poverty'. He argues that underdeveloped countries are poor because they are trapped in vicious circle of poverty. Vicious circle of poverty through both the demand and supply side forces, discourage the investment capacity of the country. Supply side of vicious circle indicates that in underdeveloped countries, productivity is so low that it is not enough for capital formation. There is small capacity to save resulting from low level of income which is a reflection of low productivity due to the lack of capital, and the lack of capital is a result of the small capacity to save. On the demand side, due to low income there is low consumption demand and this induces low level of investment. Low level of invest-ment causes low level of capital formation which again result in low level of productivity. Ultimately all these cumulative forces results in low level of income.

27. The cyclic poor are those: [J.P.S.C. (Pre) 2016]

Correct Answer: (b) Who continuously shuffle between being poor and non-poor
Solution:Cyclical poverty refers to poverty that may be widespread throughout a population, but the occurrence itself is of limited duration. This could be caused by temporary job loss and food scarcities due to natural phenomenon or by fluctuations in the business cycle, with mass unemployment during periods of depression or series recession. Thus,  the cyclic poor are those who continuously shuffle between being poor and non-poor.

28. Which of the following fixes the poverty line in India? [U.P.P.C.S. (Pre) 2018]

Correct Answer: (d) Planning Commission
Solution:Planning Commission was the nodal agency for determining the poverty line at National and State levels in India. From 1 January, 2015 NIT1 Aayog replaced the Planning Commission and now it is the nodal agency for fixing the poverty line in India.

29. Which among the following in India is the nodal agency for estimation of poverty at the national and state level? [U.P.P.C.S. (Pre) 2014]

Correct Answer: (d) Planning Commission
Solution:Planning Commission was the nodal agency for determining the poverty line at National and State levels in India. From 1 January, 2015 NIT1 Aayog replaced the Planning Commission and now it is the nodal agency for fixing the poverty line in India.

30. The Lakdawala Committee (1993) is related to: [Jharkhand P.C.S. (Pre) 2023]

Correct Answer: (b) poverty estimation
Solution:In 1993, an expert group constituted to review methodology for poverty estimation, chaired by DT Lakdawala, made the following suggestions: (1) Consumption expenditure should be calculated based on calorie consumption as earlier; (ii) State specific poverty lines should be constructed and these should be updated using the Consumer Price Index of Industrial Workers (CPI-IW) in urban areas and Consumer Price Index of Agricultural Labourers (CPI-AL) in rural areas; and (iii) Discontinuation of 'scaling' of poverty estimates based on National Accounts Statistics.
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