Poverty alleviation and employment generation in India are important components of India’s socio-economic development strategy. Understanding the various programmes and strategies implemented to address these issues is essential for aspirants preparing for the RBI Grade B Exam. This blog contains the definitions, types, measurement, and key initiatives undertaken by the Indian government to combat poverty and generate employment.
Definition of Poverty
Poverty is universally recognized as a state where individuals lack the financial resources and essentials to maintain a minimum standard of living deemed acceptable in society. It means not only the absence of income but also the inability to access basic needs such as food, shelter, education, and healthcare.
Different Types of Poverty
Poverty is a multifaceted issue and is categorized into various types:
- Absolute Poverty: Refers to a fixed economic threshold below which individuals cannot meet basic life necessities.
- Relative Poverty: Considers an individual’s economic status in relation to the broader society, focusing on inequality.
- Multi-Dimensional Poverty: Comprises various deprivations that individuals may face, including poor health, lack of education, and inadequate living standards.
Committees Formed for Definition of Poverty Line in India
Over the years, several committees have been constituted to refine the poverty line criteria in India:
- Alagh Committee (1979)
- Lakdawala Committee (1993)
- Tendulkar Committee (2009)
- Rangarajan Committee (2012)
The responsibility of identifying the poor primarily lies with the state governments, ensuring that regional disparities are accounted for in poverty assessments.
Below Poverty Line (BPL)
In India, poverty is primarily measured based on expenditure required to achieve a threshold level of calorie intake. This expenditure threshold defines the poverty line, and individuals or households falling below this line are classified as Below Poverty Line (BPL). The identification of BPL households is important for targeting welfare schemes and resources effectively.
Strategies for Poverty Alleviation
- Rapid Economic Growth: Economic expansion increases GDP, improving the living conditions of the poor by creating better opportunities. This is often referred to as the “Trickle-down Effect,” where the benefits of economic growth eventually reach the lower strata of society.
- Employment Generation through Government Schemes: Several government schemes are launched time to time for generating the employment, some of these are:
- Pradhan Mantri Rozgar Yojana (PMRY): Launched in 1993 to create self-employment opportunities for rural youth.
- Swarnajayanti Gram Swarozgar Yojana (SGSY): Introduced in 1999 to organize BPL families into Self-Help Groups (SHGs) through bank credit and subsidies.
- Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA): Initiated in 2005, it remains one of the largest social welfare programmes globally, providing guaranteed employment to rural households.
- Provision of Basic Amenities through Government Schemes: The government keeps on launching various schemes that provides basic amenities to people. some of the schemes are:
- National Food Security Act
- Deen Dayal Antyodaya Yojana
- National Social Assistance Programme
- PM Rural Development Fellowship
- Direct Benefit Transfer (DBT): Ensures that financial resources reach the needy directly, minimizing leakage and enhancing the efficiency of welfare delivery.
- Public Distribution System (PDS) and Food Corporation of India (FCI): These institutions ensure food security for the poor by distributing subsidized food grains.
- Minimum Support Price for Farmers: Provides financial security to farmers, safeguarding them against market fluctuations and ensuring stable incomes.
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World Bank Recommendations for Poverty Reduction
The World Bank emphasizes several key steps for effective poverty reduction:
- Accelerating Rural Poverty Reduction: Focused interventions in rural areas where poverty is more prevalent.
- Creating More and Better Jobs: Enhancing employment opportunities that offer decent wages and job security.
- Focusing on Women and Scheduled Tribes: Targeted initiatives to uplift marginalized communities.
- Creating Good Locations: Developing infrastructure and amenities in areas to improve living standards and economic prospects.
- Improving Human Development Outcomes: Enhancing education, health, and overall well-being of the poor.
Measuring Poverty
Several indices are used to measure poverty, capturing its multi-dimensional nature:
- Human Development Index (HDI)
- Gender Development Index (GDI)
- Gender Inequality Index (GII)
- Multi-Dimensional Poverty Index (MPI)
These indices help in understanding the various aspects of poverty beyond mere income levels, facilitating comprehensive policy-making.
Employment Generation in India
With over 62% of its population in the working-age group (15-59 years) and more than 54% below 25 years of age, India enjoys a demographic advantage. Unlike the industrialized world, where the labor force is expected to decline by 4% over the next two decades, India’s labor force is anticipated to grow by 32%, presenting both opportunities and challenges.
Challenges in Employment Generation
- Population Growth: Rapid population growth exerts pressure on job creation.
- Modernization: Technological advancements reduce the need for manual labor, leading to unemployment in traditional sectors.
- Inadequate Fund Allocation: Insufficient financial resources hinder effective implementation of employment schemes.
- Lack of Skilled Labor: A mismatch between the skills possessed by the workforce and the demands of the job market limits employment opportunities.
- Education-Employment Gap: A highly educated population without corresponding skills struggles to secure organized sector jobs.
Major Sources of Employment Data in India
- National Sample Survey Organization (NSSO)
- Census of India
- Directorate General of Employment and Training (DGE&T)
- Data from Registration with Employment Exchanges
These sources provide critical insights into employment trends, helping shape policy interventions.
Government Initiatives for Employment Generation
The Indian government has launched several programmes to stimulate job creation:
- Prime Minister’s Employment Generation Programme (PMEGP): Managed by the Ministry of Micro, Small & Medium Enterprises, it encourages self-employment and entrepreneurship.
- Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGA): Guarantees 100 days of wage employment per year to rural households.
- Pt. Deen Dayal Upadhyaya Grameen Kaushalya Yojana (DDU-GKY): Run by the Ministry of Rural Development, it focuses on skill development for rural youth.
- Deendayal Antyodaya Yojana – National Urban Livelihoods Mission (DAY-NULM): Managed by the Ministry of Housing & Urban Affairs, it aims to reduce urban poverty.
- Pradhan Mantri Mudra Yojana (PMMY): Facilitates self-employment by providing collateral-free loans up to ₹10 lakhs to small/micro enterprises and individuals.
- Pradhan Mantri Rojgar Protsahan Yojana: Incentivizes employers by covering their entire contribution towards the Employees’ Provident Fund (EPF) and Employees’ State Insurance (ESI).
- Pradhan Mantri Kaushal Vikas Yojana (PMKVY): Under the Skill India Mission, it aims to skill one crore people, enhancing their employability.
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Issues in Employment Generation
Despite various initiatives, India faces persistent challenges in creating sufficient employment:
- Population Growth: Continual population increase requires sustained job creation efforts.
- Modernization and Automation: Technological changes reduce the need for traditional manual labor, necessitating a shift towards more skilled jobs.
- Funding Constraints: Limited financial resources impede the scalability and effectiveness of employment programmes.
- Skill Mismatch: The gap between the skills provided by the education system and those demanded by the industry leads to high unemployment rates among the educated youth.
- Comparative Disadvantage: Compared to countries like China, India faces a lag in producing skilled workers, affecting its competitiveness in manufacturing and organized sectors.
By grasping the complexities of poverty and employment in India, candidates can better appreciate the policies driving the nation’s progress, a key aspect of the RBI Grade B Syllabus.
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