UPSC IAS Prelims 2023: Important Questions on Economics – Topic 3 (Poverty & Unemployment): Poverty is a state or condition in which a person or community lacks the financial resources and essentials for a minimum standard of living. Unemployment is another factor causing poverty in India. The ever-increasing population has led to a higher number of job-seekers. However, there is not enough expansion in opportunities to match this demand for jobs. Both the concepts have inter-dependency and are important to be studied for the UPSC Civil Services Prelims and Mains exams. To help the aspirants in their preparation, we have provided the 10 most important questions from the Composition Structure of Indian Economy topic of Economics for UPSC Prelims 2023.
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Ques 1: Which of the following committee is not related to poverty estimation?
(a) Alagh Committee
(b) Balwantrai Mehta Committee
(c) Rangarajan committee
(d) Lakdawala Committee
Ans: b
Explanation:
Alagh Committee (1979) determined a poverty line based on a minimum daily requirement of 2400 and 2100 calories for an adult in Rural and Urban area respectively. Subsequently, different committees; Lakdawala Committee (1993), Tendulkar Committee (2009), Rangarajan committee (2012) did the poverty estimation.
Balwantrai Mehta Committee is related to Panchayati Raj Institutions.
Ques 2: What is unemployment trap?
(a) A situation when unemployment benefits discourage the unemployed to go to work.
(b) A situation where people working informally, without proper job contracts and thus sans any legal protection.
(c) It refers to the time lag between the jobs when an individual is searching for a new job or is switching between the jobs.
(d) It is loss of jobs due to changes in technology.
Ans: a
Explanation:
Unemployment trap is a situation when unemployment benefits discourage the unemployed to go to work. People find the opportunity cost of going to work too high when one can simply enjoy the benefits by doing nothing.
Ques 3: “A category of unemployment arising from the mismatch between the jobs available in the market and the skills of the available workers in the market.” Which type of unemployment is being discussed here?
(a) Cyclical Unemployment
(b) Frictional Unemployment
(c) Structural Unemployment
(d) Disguised Unemployment
Ans: c
Explanation:
Structural Unemployment is a category of unemployment arising from the mismatch between the jobs available in the market and the skills of the available workers in the market. Many people in India do not get job due to lack of requisite skills and due to poor education level, it becomes difficult to train them.
Ques 4: Consider the following statements;
- Poverty line estimation in India is based on income levels.
- Poverty estimation in India is carried out by NITI Aayog’s task force.
Which of the following statements is correct?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
Ans: b
Explanation:
Poverty line estimation in India is based on the consumption expenditure and not on the income levels.
Poverty estimation in India is carried out by NITI Aayog’s task force through the calculation of poverty line based on the data captured by the National Sample Survey Office under the Ministry of Statistics and Programme Implementation (MOSPI).
Ques 5: Which of the following are causes of the Poverty in India?
- Efficient Resource utilisation
- Unemployment
- Colonial Exploitation
- Population Explosion
Select the correct code:
(a) 1 and 2 only
(b) 2, 3 and 4 only
(c) 1, 3 and 4 only
(d) All of the above
Ans: b
Explanation:
There is underemployment and disguised unemployment in the country, particularly in the farming sector. This has resulted in low agricultural output and also led to a dip in the standard of living. Efficient use of these resources can help eliminate poverty.
Ques 6: Consider the following statements with reference to Poverty Alleviation Programs:
- Annapurna Scheme: This scheme was started by the government in 1999–2000 to provide food to people identified as BPL families.
- Pradhan Mantri Kaushal Vikas Yojana: It will focus on fresh entrant to the labour market, especially students who have passed Class XII.
Which of the following statements is correct?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
Ans: d
Explanation:
Annapurna Scheme: This scheme was started by the government in 1999–2000 to provide food to senior citizens who cannot take care of themselves and are not under the National Old Age Pension Scheme (NOAPS), and who have no one to take care of them in their village.
Pradhan Mantri Kaushal Vikas Yojana: It will focus on fresh entrant to the labour market, especially labour market and class X and XII dropouts.
Ques 7: Usual status (US) unemployment is calculated with reference to a period of:
(a) Yearly
(b) Monthly
(c) biannually
(d) Weekly
Ans: a
Explanation:
The Usual Status approach to measuring unemployment uses a reference period of 365 days i.e. one year preceding the date of the survey of NSSO for measuring unemployment. The Usual Status approach of measuring unemployment also looks at the principal activity and subsidiary activity status of the worker.
Ques 8: Relative poverty refers to a situation where:
(a) a person falls behind others
(b) a person is unable to obtain the necessaries for life
(c) a person is below poverty line
(d) a person is poorer than another in the developed World
Ans: a
Explanation:
Relative poverty is when households receive 50% less than average household incomes, so they do have some money but still not enough money to afford anything above the basics. This type of poverty is, on the other hand, changeable depending on the economic growth of the country.
Ques 9: Use of energy requirements (calorie) as a measure of poverty in India was made for the first time by:
(a) Amartya Sen
(b) Dandekar and Rath
(c) Planning Commission
(d) T. N. Srinivasan
Ans: b
Explanation:
Dandekar and Rath in 1971 used a daily intake of 2,250 calories per person to define the poverty line for India. They concluded from this study that 40 percent of rural residents and 50 percent of urban residents were below the poverty line in 1960–61.
Ques 10: Consider the following statements with reference to MNREGA:
- It is an employment scheme that was launched to provide social security by guaranteeing a minimum of 100 days paid work per year to unskilled labour.
- The scheme was launched in 2007.
- This act provides Right to Work to people.
Which of the following statements is not correct?
(a) 1 only
(b) 1 and 2 only
(c) 3 only
(d) 2 only
Ans: d
Explanation:
It is an employment scheme that was launched in 2005 to provide social security by guaranteeing a minimum of 100 days paid work per year to all the families whose adult members opt for unskilled labour-intensive work.