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Er. Bhupendra
Er. Bhupendra

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POVERTY IN ECONOMICS

POVERTY
│
├── DEFINITION
│ └─ Minimum needs: Food, Cloth, Shelter, Health, Education
│
├── CAUSES
│ ├─ Low fiscal capacity
│ ├─ Poor education → Unemployment
│ ├─ Large family → Malnutrition
│ ├─ Agriculture risk (Monsoon + APMC)
│ ├─ Low assets → Low savings → Vicious circle
│ ├─ Informal labour
│ ├─ Low female LFPR
│ ├─ Debt trap
│ └─ Corruption / Leakages
│
├── TYPES
│ ├─ Absolute → $2.15 (World Bank, PPP 2017)
│ ├─ Relative → % of Median Income (UK 60%)
│ └─ Multidimensional → MPI
│
├── POVERTY MEASUREMENT
│ ├─ World Bank
│ │ ├─ IPL $2.15
│ │ ├─ Poverty & Shared Prosperity Report
│ │ └─ Head Count Ratio (HCR)
│ │
│ ├─ UNDP MPI
│ │ ├─ 3D (Health, Edu, Living)
│ │ ├─ 10 Indicators
│ │ └─ NOT poverty line (Complementary)
│ │
│ ├─ NITI MPI (2021)
│ │ ├─ Alkire-Foster Method
│ │ ├─ 3D, 12 Indicators
│ │ ├─ + Maternal Health
│ │ ├─ + Bank Account
│ │ └─ One member deprived → whole HH deprived
│ │
│ └─ Tendulkar (2009)
│ ├─ MPCE
│ ├─ ₹816 Rural
│ ├─ ₹1000 Urban
│ └─ Used Urban basket for both
│
├── DESHI METHODS
│ ├─ Alagh → Calories (2400R/2100U)
│ ├─ Lakdawala → Calories + Basic needs
│ ├─ Rangarajan → Higher poverty line
│ └─ SECC 2011
│ ├─ Eligibility tool
│ ├─ 7 Deprivation indicators
│ ├─ Auto Include / Exclude
│ └─ Used in PMAY, PM-JAY
│
├── INEQUALITY
│ ├─ Gini (0=Equality, 1=Inequality)
│ ├─ Lorenz Curve
│ ├─ World Inequality Report
│ ├─ Oxfam CRI
│ ├─ Global Wealth Report (Credit Suisse)
│ ├─ Social Mobility (WEF)
│ └─ Inclusive Wealth Report (UNEP)
│
├── SPECIAL CONCEPTS
│ ├─ Vicious Circle (Supply + Demand)
│ ├─ Period Poverty
│ ├─ Nobel 2019 (Banerjee, Duflo, Kremer)
│ └─ SBI/NITI claim <5% poverty (2024)
│
├── INDICES
│ ├─ MPI → Health + Edu + Living
│ ├─ NITI MPI → + Bank, Maternal, Electricity
│ └─ BNI (Economic Survey 2021)
│ ├─ Water
│ ├─ Sanitation
│ ├─ Housing
│ ├─ Micro-env
│ └─ Electricity + Cooking fuel
│
├── SDG 1 (2030)
│ ├─ Reduce poverty by half
│ ├─ Zero homeless
│ ├─ 100% insurance
│ └─ 100% social protection
│
└── POVERTY REMOVAL
│
├─ MGNREGA (2005)
│ ├─ 100 days guarantee
│ ├─ 60:40 Wage-Material
│ ├─ 100% wage by Centre
│ ├─ No contractor
│ ├─ Social audit
│ ├─ Linked to CPI-AL
│ └─ Women >50%
│
├─ DAY-NRLM / NULM
├─ DDU-GKY
├─ Mission Antyodaya
├─ DISHA Committee
├─ SMILE 75
├─ PMGKRA (Corona)
├─ DBT / E-Rupi

└─ UBI (Concept)

==============================

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Source: 📘 EF6C_HDT_HRD_POVERTY_PCB11.pdf

🔥 PILLAR 6C – POVERTY, INEQUALITY & SCHEMES

(Complete Smart Notes for Prelims)

1️⃣ POVERTY – BASICS

📌 Definition

Lack of money to meet minimum standard of living:

  • Food
  • Clothing
  • Shelter
  • Health
  • Education

2️⃣ CAUSES OF POVERTY (Very Important for PCS Mains + Pre)

  1. Poor fiscal capacity (tax evasion → poor public infra)
  2. Poor education → unemployment
  3. Large family → malnutrition
  4. Agriculture issues (monsoon + APMC)
  5. Low asset base → low savings → low investment
  6. Wasteful expenditure (liquor, rituals)
  7. Debt trap (moneylenders)
  8. Informal labour (no wage protection)
  9. Lack of insurance/social security
  10. SC/ST barriers
  11. Low female LFPR
  12. Misgovernance + LWE
  13. Corruption in schemes
  14. Late LPG reforms vs China

3️⃣ 🔄 Vicious Circle of Poverty

Supply Side:

Low income → low savings → low investment → low productivity → low income

Demand Side:

Low income → low demand → low production → fewer jobs → low income

📌 Classic Prelims Concept

4️⃣ Nobel Prize 2019 (Exam Favourite)

Awarded to:

  • Abhijit Banerjee
  • Esther Duflo
  • Michael Kremer

For: Experimental approach to poverty alleviation

Concept:
Break poverty into small solvable questions (education, vaccination etc.)

5️⃣ POVERTY MEASUREMENT

🌍 A. World Bank (Absolute Poverty)

International Poverty Line:

  • Earlier: $1.90
  • Now: $2.15 (PPP, 2017 base)

📌 Poor if spending < $2.15/day

2011 India: 21.2% poor

🌍 B. Relative Poverty

Less than x% of median income
(UK uses 60%)

🌍 C. UNDP – MPI (Very Important)

Prepared by:

  • UNDP
  • OPHI (Oxford)

3 Dimensions | 10 Indicators

Health:

  • Nutrition
  • Child mortality

Education:

  • Years of schooling
  • School attendance

Living Standard:

  • Cooking fuel
  • Sanitation
  • Drinking water
  • Electricity
  • Housing
  • Assets

📌 India MPI:

  • 2005-06 → 55%
  • 2019-21 → 16.4%

📌 MPI ≠ Poverty Line (Complementary tool)

6️⃣ INEQUALITY

Gini Coefficient

  • 0 = perfect equality
  • 1 = perfect inequality
  • Based on Lorenz Curve

World Inequality Report 2022

  • Top 10% own 60–80% wealth
  • Bottom 50% earn < ₹55,000/year (India)

Oxfam CRI Index

Measures govt commitment:

  • Social spending
  • Progressive taxation
  • Labour rights

India ranked very low.

Period Poverty

Menstrual hygiene → education loss → economic disadvantage

Important Example:

  • Scotland: Free sanitary products law
  • India: 0% GST on sanitary pads
  • Rajasthan: Udaan Scheme

7️⃣ DESHI POVERTY METHODS (Very Important)

🔹 Alagh Committee (1979)

Based on calorie intake:

  • 2400 rural
  • 2100 urban

🔹 Lakdawala Committee (1993)

Calories + clothing + shelter

🔹 Tendulkar Committee (2009) ⭐ MOST IMPORTANT

Based on MPCE

Poverty Line (2011-12):

  • Rural ₹816
  • Urban ₹1000

Poverty Rate:

  • 21.9% India
  • 25.7% Rural
  • 13.7% Urban

Used urban basket for both rural & urban.

🔹 Rangarajan Committee

Family of 5:

  • Rural ₹4860
  • Urban ₹7035

🔹 SECC 2011 (Eligibility Tool)

NOT poverty measurement.
Used for scheme targeting.

3 categories:

  • Automatically excluded
  • 7 Deprivation indicators
  • Automatically included

Used in:

  • PMAY
  • PM-JAY

8️⃣ NITI AAYOG MPI (Very Very Important)

Launched: 2021

Method: Alkire-Foster

12 Indicators

Extra indicators:

  • Maternal health
  • Bank account
  • Electricity

If one member malnourished → whole household deprived.

NITI MPI Data:

2005 → 55%
2013 → 29%
2019 → 14.9%
2022-23 → 11.28%

📌 24.8 crore people lifted in 9 years.

Worst States:

  • Bihar
  • Jharkhand
  • UP
  • MP

Best:

  • Kerala
  • Goa
  • Sikkim

9️⃣ Bare Necessities Index (Economic Survey 2021)

5 Dimensions:

  1. Water
  2. Sanitation
  3. Housing
  4. Micro-environment
  5. Other facilities

Score 0–1
Higher score = better basic facilities

Related Schemes:

  • Jal Jeevan
  • SBM
  • PMAY
  • Ujjwala
  • Saubhagya

🔟 SDG Goal 1 (Target 2030)

  • Reduce BPL by half
  • Zero homelessness
  • 100% insurance coverage
  • 100% MNREGA coverage

1️⃣1️⃣ MGNREGA (Extremely Important)

Launched:

  • 2005 Act
  • 2006 implementation
  • 2008 nationwide

Guarantee:
100 days unskilled labour

Rules:

  • No contractors
  • 60% wage, 40% material
  • 100% wage paid by Centre
  • Social audit mandatory

Women participation > 50%

Important Related:

  • Barefoot Technicians
  • DBT payments
  • Linked to CPI-AL
  • Agriculture asset creation

1️⃣2️⃣ Other Poverty Schemes

  • DAY-NRLM
  • DAY-NULM
  • DDU-GKY
  • Mission Antyodaya
  • DISHA Committees
  • SMILE 75
  • PMGKRA (Corona)
  • UBI (Concept)
  • E-Rupi

🔥 EXAM TRAPS (Very Important)

  1. MPI ≠ poverty line
  2. Tendulkar used urban basket
  3. SECC ≠ poverty measurement
  4. Gini = inequality
  5. Alkire-Foster = NITI MPI
  6. 60:40 ratio in MGNREGA
  7. World Bank line = $2.15

🧠 Ultra Short Revision Table

Concept Key Point
Absolute Poverty $2.15/day
Relative Poverty % of median income
MPI 3 dimensions
Tendulkar ₹816 / ₹1000
NITI MPI 12 indicators
BNI 5 dimensions
Gini 0–1
MGNREGA 100 days

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=================================

===================================================
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Here is exactly what you asked:

  • ✅ 1 PAGE – Ultra Smart Revision Notes
  • ✅ 1 PAGE – MCQ Type Concepts & Traps
  • 📌 Specially filtered for PCS / Daroga / SSC / BPSC Prelims

Source: 📘 Pillar 6C Poverty PDF

🟢 PAGE 1: ULTRA SMART ONE-PAGE NOTES (REVISION SHEET)

🔥 POVERTY – COMPLETE QUICK MAP

1️⃣ Types of Poverty

  • Absolute → World Bank $2.15/day (PPP 2017)
  • Relative → % of Median Income
  • Multidimensional → MPI (Health + Education + Living Standard)

2️⃣ World Bank Poverty Line

  • Earlier: $1.90
  • Now: $2.15 (PPP 2017 base)
  • 2011 India poverty: ~21%

3️⃣ UNDP – MPI (10 Indicators, 3 Dimensions)

Health

  • Nutrition
  • Child mortality

Education

  • Years of schooling
  • School attendance

Living Standard

  • Cooking fuel
  • Sanitation
  • Drinking water
  • Electricity
  • Housing
  • Assets

📌 MPI ≠ Poverty Line (Complementary tool)

4️⃣ NITI MPI (India’s Version)

  • Based on Alkire-Foster Method
  • 3 Dimensions | 12 Indicators
  • Extra: Maternal health + Bank account

2022-23 Poverty: 11.28%
24.8 crore lifted (2013–23)

Worst States: Bihar, Jharkhand
Best: Kerala, Goa

5️⃣ Deshi Poverty Committees (VERY IMPORTANT)

Committee Basis
Alagh (1979) Calories (2400 rural, 2100 urban)
Lakdawala Calories + basic needs
⭐ Tendulkar (2009) MPCE (₹816 rural, ₹1000 urban)
Rangarajan Higher poverty line

📌 Govt still uses Tendulkar data (21.9%)

6️⃣ SECC 2011

  • Not poverty measurement
  • Used for scheme eligibility
  • 7 deprivation indicators
  • Used in PMAY, PM-JAY

7️⃣ Inequality

Gini Coefficient

  • 0 = equality
  • 1 = inequality

World Inequality Report

  • Top 10% own 60–80% wealth

Oxfam CRI

  • Social spending
  • Tax progressivity
  • Labour rights

8️⃣ Bare Necessities Index (ES 2021)

5 Dimensions:

  • Water
  • Sanitation
  • Housing
  • Micro-environment
  • Electricity & cooking fuel

Score: 0–1
Higher = Better access

9️⃣ SDG Goal 1 (2030 Target)

  • Reduce poverty by half
  • Zero homelessness
  • 100% insurance coverage

🔟 MGNREGA (VERY VERY IMPORTANT)

  • 2005 Act
  • 100 days rural employment
  • 60% wage : 40% material
  • No contractor
  • 100% wage paid by Centre
  • Social audit mandatory
  • Linked to CPI-AL

Women participation > 50%

🔴 PAGE 2: MCQ TYPE CONCEPT & TRAPS (Prelims Killer Sheet)

🧠 MOST ASKED TRAPS

1️⃣ MPI includes:

✔ Nutrition
✔ School attendance
✔ Cooking fuel
❌ GDP
❌ Budget deficit

2️⃣ NITI MPI based on?

✔ Alkire-Foster
❌ Amartya Sen directly
❌ World Bank formula

3️⃣ Tendulkar Committee:

✔ Used urban basket for rural
✔ Based on MPCE
❌ Based only on calories

4️⃣ SECC:

✔ Eligibility tool
❌ Poverty measurement
❌ Conducted under Census Act

5️⃣ Gini Coefficient:

✔ Measures inequality
✔ Based on Lorenz Curve
❌ Measures poverty

6️⃣ World Bank Poverty:

✔ $2.15/day
✔ Absolute poverty
❌ Relative poverty

7️⃣ MGNREGA:

✔ 100 days guarantee
✔ 60:40 ratio
✔ No contractor
✔ Social audit

❌ Only agriculture work
❌ 100% funded by Centre

8️⃣ Bare Necessities Index:

✔ Water
✔ Sanitation
✔ Electricity
❌ Income level
❌ GDP

9️⃣ Period Poverty:

✔ Affects education
✔ Menstrual hygiene issue
❌ Related to unemployment rate

🔟 Nobel 2019:

✔ Banerjee, Duflo, Kremer
✔ Experimental poverty approach

⚡ FINAL RAPID FIRE MEMORY FORMULA

📌 Absolute = $2.15
📌 MPI = 3D 10Q
📌 NITI MPI = 3D 12Q
📌 Tendulkar = ₹816/₹1000
📌 Gini = 0–1
📌 MGNREGA = 100 days
📌 BNI = 5 Dimensions

========================

============================================

🔴 1️⃣ World Bank Reports (Prelims Trap)

You should also remember:

  • 📘 Poverty and Shared Prosperity Report
  • 2020 report → Covid may push 150 million into poverty
  • Nigeria overtook India in extreme poverty (2018)

⚠ Many exams ask: “Which report measures global poverty?”

🔴 2️⃣ Relative Poverty Example

  • UK uses 60% of median income
  • Relative poverty ≠ Absolute poverty

Often asked as conceptual MCQ.

🔴 3️⃣ Global Social Mobility Report (WEF)

Very important for inequality section.

Measures:

  • Health access
  • Education access
  • Technology
  • Social protection

2020:

  • Rank 1: Denmark
  • India: 76

This was not in ultra-short sheet earlier.

🔴 4️⃣ Inclusive Wealth Report

Prepared by:

  • UN Environment

Measures:

  • Sustainability
  • Natural capital
  • Human capital

Rare but asked in State PCS.

🔴 5️⃣ SBI & NITI Claim (2024)

Claim:

  • Poverty below 5%

Based on:

  • Consumption expenditure survey

Important for current affairs linkage.

🔴 6️⃣ SECC Technical Points (Often Asked)

✔ SECC 2011 was paperless
✔ Done outside Census Act
✔ Gram Sabha verification
✔ 3 Categories:

  • Automatically excluded
  • Automatically included
  • Deprivation based

🔴 7️⃣ NITI MPI Extra Indicators (Very Important)

Remember these specifically:

  • Maternal health
  • Bank account
  • Electricity
  • Child mortality (under 18)
  • BMI < 18.5

MCQ often comes like:
“Household is deprived if even one member is undernourished.” → ✔ TRUE

🔴 8️⃣ BNI Sub-Indices

Economic Survey also created:

  • Drinking Water Accessibility Index
  • Sanitation Index

This detail was not in 1-page note.

🔴 9️⃣ MGNREGA Micro Facts (VERY IMPORTANT)

✔ Unemployment allowance if job not given in 15 days
✔ Minimum 60% work linked to agriculture
✔ Barefoot Technicians (2015)
✔ DBT model
✔ Women participation > 50%

⚠ Many SSC papers ask 60:40 ratio & funding pattern.

🔴 🔟 Poverty Removal Schemes (Brief but Important)

You must at least recognize names:

  • DAY-NRLM
  • DAY-NULM
  • DDU-GKY
  • Mission Antyodaya
  • DISHA Committees
  • SMILE 75
  • PMGKRA (Corona)
  • E-Rupi
  • UBI concept

Recognition-based MCQs come.

🟢 FINAL VERDICT

Now coverage level:

✔ Poverty types
✔ Absolute vs Relative
✔ World Bank
✔ UNDP MPI
✔ NITI MPI
✔ Inequality Reports
✔ Committees
✔ SECC
✔ BNI
✔ SDG
✔ MGNREGA
✔ Schemes
✔ Micro facts

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