Poverty and Unemployment: TNPSC Group IIA Mains Study Material, Schemes & MCQs

Poverty and Unemployment – TNPSC Notes

Poverty

Poverty according to Thiruvalluvar

"இன்மையின் இன்னாதது யாதெனின் இன்மையின்
இன்மையே இன்னா தது" – Kural 1041

What is more painful than poverty? The pain of poverty itself.

Definition of Poverty

“Poverty refers to a situation when people are deprived of basic necessities of life” – World Bank

Poverty refers to a state of deprivation where people lack food, clothing, shelter, education, employment, income and standard of living.

World Bank Estimation (2015)

A person earning less than $1.90 per day is considered below the poverty line.

UNO Initiatives

• October 17 – International Day for the Eradication of Poverty
• 1996 – International Year for the Eradication of Poverty

Sustainable Development Goal (2015)

• SDG 1: Zero Poverty
• Eradicate extreme poverty, lack of food, clean water and sanitation

Types of Poverty

• Absolute Poverty
• Temporary Poverty
• Primary and Secondary Poverty
• Relative Poverty
• Rural Poverty
• Urban Poverty

Absolute Poverty

Income is insufficient to meet basic necessities.

Temporary / Chronic Poverty

Caused due to natural disasters like drought and monsoon failure.

Primary and Secondary Poverty

• Primary: Income insufficient for food, clothing, shelter
• Secondary: Income sufficient but wasted on non-essentials

Relative Poverty

Comparison of income and living standards among different groups or countries.

Poverty in India

India has more rural poverty than urban poverty.

Global Multidimensional Poverty Index (MPI)

• Launched by UNDP & OPHI
• 10 indicators (Health, Education, Living Standards)

2025 MPI Highlights

• Poverty reduced from 55.1% to 16.4%
• 414 million people moved out of poverty
• India’s MPI value: 0.069

Poverty Estimation in India

Important Committees

• Dadabhai Naoroji – First poverty estimation
• Dandekar & Rath Committee (1971) – Calorie based
• Alagh Committee (1979) – Official poverty line
• Lakdawala Committee (1993)
• Tendulkar Committee (2009)
• Rangarajan Committee (2014)

Tendulkar Committee Poverty Line

• Rural – ₹27/day
• Urban – ₹33/day

Causes of Poverty

• Cultural poverty
• Social inequality
• Rapid population growth
• High education expenditure
• Lack of housing

Measures for Poverty Reduction

• Effective poverty alleviation programmes
• Increase literacy
• Modernise agriculture
• Skill development for youth

Unemployment

Unemployment refers to the inability of a willing and able person to find work.

Unemployment Rate Formula

Unemployment Rate = (Unemployed Workers / Total Workers) × 100

Types of Unemployment

• Voluntary
• Open
• Technological
• Cyclical
• Disguised
• Frictional
• Structural
• Seasonal

Disguised Unemployment

More workers than required, common in agriculture.

Unemployment in India

• Data collected through PLFS
• Unemployment rate reduced to 3.2% (2023-24)

Tamil Nadu – Poverty & Unemployment

• Poverty reduced to 1.43%
• One of India’s top performers

Conclusion

Reducing poverty and unemployment is essential for inclusive economic growth and social stability.

Quick Revision: 20 Important Questions & Answers

1. Who was the first person to formulate a poverty line in India in the book 'Poverty and the Un-British Rule in India'?

Lord Boyd Orr

Dadabhai Naoroji

V.M. Dandekar

Amartya Sen

✅ Explanation: The earliest estimation of poverty was done by Dadabhai Naoroji in his book 'Poverty and the Un-British Rule in India'.

2. According to the World Bank (2015), a person is considered to be below the poverty line if they earn less than:

1.00 American dollar/day

2.50 American dollars/day

5.00 American dollars/day

1.90 American dollars/day

✅ Explanation: According to the World Bank report (2015), a person is said to be below the poverty line when he/she earns less than 1.90 American dollars per day.

3. Which committee recommended moving away from calorie consumption-based poverty calculations to nutritional outcomes?

Tendulkar Committee (2009)

Lakdawala Committee (1993)

Alagh Committee (1979)

Rangarajan Committee (2014)

✅ Explanation: The Tendulkar Committee (2009) recommended moving away from calorie consumption-based poverty calculations and introduced a focus on nutritional outcomes.

4. What is the Sustainable Development Goal (SDG) 1?

Zero Hunger

Zero Poverty

Quality Education

Gender Equality

✅ Explanation: SDG 1 aims to eradicate every form of extreme poverty, including the lack of food, clean drinking water, and sanitation.

5. According to the Tamil Nadu Economic Survey (2024-25), what is the poverty rate of Tamil Nadu in 2022-23?

4.89%

36.4%

1.43%

14.96%

✅ Explanation: Between 2005-06 and 2022-23, Tamil Nadu's poverty rate decreased significantly from 36.4% to 1.43%.

6. Which type of unemployment is characterized by marginal productivity being zero?

Structural Unemployment

Frictional Unemployment

Disguised Unemployment

Cyclical Unemployment

✅ Explanation: Disguised unemployment occurs when more people are employed than necessary (e.g., in agriculture). If some are withdrawn, output does not fall, meaning their marginal productivity is zero.

7. When was the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) passed?

2000

2005

2008

2010

✅ Explanation: The Act was passed in 2005 and the scheme was launched in 2006 to provide a legal guarantee of 100 days of wage employment.

8. Which Tamil Nadu district has the lowest Multidimensional Poverty Index (MPI) as per the 2023 report?

Kanchipuram

Chennai

Coimbatore

Tiruvallur

✅ Explanation: Kanchipuram has the lowest poverty rate at 0.67%, followed by Chennai at 0.96%.

9. What is 'Frictional Unemployment'?

Unemployment due to technological changes

Unemployment during specific seasons

Unemployment due to economic depression

Unemployment when workers shift from one job to another

✅ Explanation: Frictional Unemployment occurs temporarily when a worker is shifting from one job to another or searching for a new job.

10. The 'Pudhumai Penn Scheme' launched in 2022 aims to support:

Rural entrepreneurship

Girls' higher education

Urban housing

Agricultural loans

✅ Explanation: The Pudhumai Penn Scheme (2022) provides financial assistance to support girls' higher education in Tamil Nadu.

11. According to the Rangarajan Committee (2014), the poverty line for Urban areas was set at:

Rs. 32 per day

Rs. 33 per day

Rs. 47 per day

Rs. 50 per day

✅ Explanation: The Rangarajan Committee increased the daily per capita expenditure limit to Rs. 47 for urban areas and Rs. 32 for rural areas.

12. Which Article of the Indian Constitution ensures the 'Right to Work'?

Article 21

Article 19

Article 41

Article 45

✅ Explanation: Article 41 states that it is the duty of the state to provide employment opportunities (Right to Work) for people deprived of it.

13. Which scheme provides a health insurance cover of Rs. 5 lakh per family?

PM Suraksha Bima Yojana

Pradhan Mantri Jan Arogya Yojana (PM-JAY)

PM Jeevan Jyoti Bima Yojana

Aam Aadmi Bima Yojana

✅ Explanation: PM-JAY (Ayushman Bharat), launched in 2018, provides a health insurance cover of Rs. 5 lakh per family.

14. What is 'Cyclical Unemployment' also known as?

Marxian Unemployment

Seasonal Unemployment

Keynes Unemployment

Voluntary Unemployment

✅ Explanation: Cyclical unemployment, caused by trade cycles or economic fluctuations (like depression), is also called Keynes Unemployment.

15. The 'Naan Mudhalvan Scheme' (2022) in Tamil Nadu focuses on:

Skill enhancement for youth

Providing free housing

Marriage assistance

Old age pension

✅ Explanation: The Naan Mudhalvan Scheme was launched in 2022 to provide skill enhancement and training for the youth of Tamil Nadu.

16. Who coined the term 'Poverty Line' in 1945?

Adam Smith

Amartya Sen

Lord Boyd Orr

Mahatma Gandhi

✅ Explanation: Lord Boyd Orr, the first Director-General of the FAO, first coined the term 'poverty line' in 1945.

17. Which Act is mentioned to replace MGNREGA in 2025 with increased work days?

PM-KISAN Act

VB-G RAM G Act

Rural Livelihood Act

Employment Assurance Act

✅ Explanation: The document mentions the 'VB-G RAM G Act, 2025' which replaced MGNREGA and increased work guarantee from 100 to 125 days.

18. What was the calorie consumption standard set by the V.M. Dandekar and N. Rath committee (1971)?

2400 calories

2100 calories

2250 calories

2000 calories

✅ Explanation: This committee suggested that the poverty line be derived from expenditure adequate to provide 2250 calories per day in both rural and urban areas.

19. Which scheme aims to create 3.5+ crore jobs in 2 years as per Budget 2024-25?

Employment Linked Incentive (ELI) Scheme

PM-Vikas Yojana

Stand Up India

PM-Mudra Yojana

✅ Explanation: The Employment Linked Incentive (ELI) Scheme (Budget 2024-25) aims to create 3.5+ crore jobs in 2 years.

20. What is 'Structural Unemployment'?

Unemployment due to lack of willingness to work

Unemployment due to mismatch between skills and jobs

Unemployment in agriculture during off-season

Unemployment due to recession

✅ Explanation: Structural Unemployment occurs due to structural changes in the economy (e.g., introduction of mobile phones reducing demand for cameras), leading to a mismatch in skills.

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