ECONOMIC PROBLEMS

Module 2
List economic problems
• Unemployment
• Poverty
• Discrimination
• Infrastructure
• Overpopulation
• Migration
• Caste (within and outside)
• Income inequality
• Illiteracy
• Unequal wealth distribution
• Rural development
• Trafficking
Exercise
• Calculate the yearly expenditure
• Your dress
• haircut
• Cell phone recharge
• Fees
• Hostel fee
• Extra coaching class
• Cosmetics
• books
• Gifts
• Miscellaneous

• Convert it into monthly

• Convert it to a day
Poverty
• Poverty - inability to secure minimum requirements of life – food, shelter and clothing.
• Poverty status - From the perspective of GDP, food, health, life expectancy, etc
• 11th National Development Plan - More than 300 million people in India are labelled as poor.
• India ranks 118 out of the 180 countries of the world.
• One-third of India’s population lives below the poverty line.
• Most of the poor people in India are based in rural areas.
• Poverty remains a chronic condition for almost 30 per cent of India’s rural population.
• The incidence of rural poverty has declined somewhat over the past three decades as a result of rural to
urban migration but the situation still continues to remain worrisome.
 • Condition
• Lacks financial
assistance
• Basic needs
Poverty
According to World Bank, Poverty is pronounced deprivation in well-being,
and comprises many dimensions. It includes low incomes and the inability
to acquire the basic goods and services necessary for survival with dignity.
Poverty also encompasses low levels of health and education, poor access to
clean water and sanitation, inadequate physical security, lack of voice, and
insufficient capacity and opportunity to better one's life.

Source : https
://www.newindianexpress.com/business/2020/feb/18/only-84-crore-poor-in-india-cl
aims-a-new-study---2105127.html
 Condition in which people
Condition where household
lack the minimum amount of
income is below a necessary
income needed in order to
level to maintain basic living
maintain the average standard
standards (food, shelter,
of living in the society in
housing)
Types which they live

Drewnowski & Scott Peter Townsend

Basic Cultural needs Related to the needs and
demands of a Changing society

Absolute Relative
Generational or
Situational
Chronic
• Unfortunate • Handed by
Event generations
before them
Causes
• Climatic factors • Social customs and traditions
• Demographic factors • Joint family system vs nuclear family system
• Economic factors • Growing indebtedness
• Lack of village industries & industries • Lower growth rate
• Lack of employment opportunities • Unemployment
• Lack of educational system • Political causes
• Caste system • Alcoholism
• Lack of infrastructure development • Dependency on agriculture
• Lack of natural resources • Belief in fate
• Harm by insects (locusts ) • Corruption
David Elesh
• Three causes of poverty
• Individual
Fate Karma • Culture
• Social structure

Motivation lack Failure

poor Destiny
Comparison
Rural India Urban India
• Depressed /Deprived Community • Migration
• Unequal distribution of wealth • Unstable income
• Land ownership • Loan debts
• Source of income (causal labour ) • Income below poverty line
• Debts • Slum population
Effects of Poverty
• Illiteracy
• Child labour
• Sex workers
• Poor standard of living
• Discrimination
• Robbery/theft/stealing
• Hygiene and sanitation
• Social tensions
• Protest
• Youth unrest
• Addiction
• Unemployment
Poverty Alleviation Programs in India

National Food for work programme was launched on November 14, 2004 in 150
most backward districts of the country identified by the Planning Commission in
consultation with the Ministry of Rural Development and State Governments.
Growth oriented approach
• Growth-oriented approach - This approach was the major focus of planning in the 1950s and early 1960s. It
was expected that rapid industrialisation and transformation of agriculture through green revolution will benefit
backward regions as well. The benefits of economic growth has not trickled down to the poor because of the
following reasons:
• Overall growth rate of industry and agriculture was quite low.
• Population growth made per capita income to rise at further low levels.
• The gap between the rich and the poor widened.
• There was lack of political willingness and inability to redistribute lands.
• The green revolution worsened the disparities regionally and between large and small farmers.
• Although various initiatives were taken by the government to improve the growth rate and to reduce poverty
however there is lack of basic amenities and educational facilities in many regions of India particularly those
regions where people are poor.
• Therefore the benefits of growth did not trickle down to the weaker sections of the society.
Poverty Alleviation Programs in India

 Five year plan

 20 point programme
 Integrated Rural Development Programme (IRDP)
 Antyodaya Anna Yojana – Targeting poor population from BPL and cover under TPDS – Hunger free India
 Indira Awaas Yojana
(Rural Housing ) – under Rural Landless Employment Guarantee Programme
(RLEGP) - Jawahar Rozgar Yojana – now independent scheme
 Pradhan Mantri Gramin Awaas Yojana (comprehensive programme) – housing among poor living below
poverty line
 Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) 2005
 Self Help Groups
Poverty Alleviation Programs in India
 SampoornaGramin Rozgar Yojana (SGRY) – to promote additional wage and employment in villages
with food security and improving the nutritional level (merging the on-going schemes of EAS
(Employment Assurance Scheme) and the JGSY (Jawahar Gram Samridhi Yojna)
 Swarnajayanti Gram Swarozgar Yojana (SGSY) - Integrated program that caters to the self-
employment of the rural poor. (merging six schemes)
 Integrated Rural Development Programme (IRDP) – to provide elf-employment to the rural poor through
acquisition of productive assets or appropriate skills which would generate additional income on a sustained basis
to enable them to cross the poverty line.
 Million Wells Scheme (to provide open irrigation wells free of cost to poor, small and marginal farmers belonging
to SCs and STs and free bonded labour)
 Training of Rural Youth for Self-Employment' - (TRYSEM) (15th August 1979, To provide training facilities and
create self- employment among rural unemployed youths)
 Development of Women & Children in Rural Areas (DWCRA) - to facilitate access for poor women to
employment, skill upgradation, training, credit and other support services
 Supply of Improved Toolkits to Rural Artisans (SITRA) – sub scheme of IRDP - supplied with a kit of improved
hand tools within a financial ceiling of Rs.2000, of which the artisans have to pay 10 per cent and the remaining
90 per cent is a subsidy from the Government of India. 
 Ganga Kalyan Yojana (GKY) – irrigation facility
International Day for the
Eradication of Poverty
UNEMPLOYMENT
Meaning and Definition
• Harris and Levenly defined unemployment "as a condition of
one who is able to work but unable to find it‘
• D'Mello has defined unemployment as a"condition in which an
individual is not in a state of remunerative occupation despite
his desire to do so" ( 1969).
• Naba has explained unemployment as a 'condition of
involuntary idleness" (1968).
• The Planning Commission of India has described a person as
'"marginally unemployed' when he/she remains without work for
6 months a year.
TYPES

Types

Voluntary Involuntary
unemployment unemployment

Underemployment
Theory of Employment
• Keynes' theory of employment is based on the principle of effective demand.
The Keynesian theory of employment is also called the theory of income and output. The
point of effective demand, which gives the equilibrium level of employment, also indicates
the equilibrium level of national income and output. Keynesian economics was developed
by the British economist John Maynard Keynes during the 1930s in an attempt to
understand the Great Depression. Keynes advocated for increased government expenditures
and lower taxes to stimulate demand and pull the global economy out of the depression.
• Classical Theory of Employment - according to Pigou, the tendency of the economic
system is to automatically provide full employment in the labour market when the demand
and supply of labour are equal. According to this theory, income and employment are
determined by production function and equilibrium between demand and supply of labour.
Production depends on the level of employment. Level of employment refers to
equilibrium of demand and supply of labour in the economy.
CAUSES
• Uncertainty in agriculture
• Employment to women/marginalised sectors
• Lack of Educational support
• Poor condition of Cottage industries
• Lack of employment policy
• Lack of employment in industries
• Lack of alternative opportunities
• Population
• Educated unemployment
• corruption
• Advanced technology
• Defective economic planning
Effects
• Economic factors
• Poverty
• Income inequality
• Crime
• Corruption
• Waste of human resources
• No proper Implementation of welfare schemes
• Increase dependency burden
• Social factors
• Social tension and unrest
• Loss of human dignity
• Lack of support
Measures to control unemployment
• National Rural Employment Programme (Nrep)
• Rural Landless Employment Guarentee Programme (Rlegp)
• Jawahar Razgar Yojana (JRY) – Self Employment For Educated Youth In Urban
• Training Rural Youth for self employment (TRYSEM)
• Nineth Plan - Generating employment by giving priority to agriculture and rural
development.
• Tenth Plan - To reduce the poverty through income and employment generating   
programmes.
• Prime Minister Rozgar Yojana (PMRY ) – self employment scheme – to provide loans
through banks for self employment (educated unemployed)
International Workers Day
or
Labour Day
Source – Book
• https://ccsuniversity.ac.in/bridge-library/pdf/Social%20Problems%20Ram
%20Ahuja.pdf
Shikha Surendran, hailing from a small village in Kerala's Ernakulam, - her father who told her
that education was "the only way out of poverty".
Gopala Krishna Ronanki, the son of a poor farmer from Andhra Pradesh's
Srikakulam district, cracked the UPSC CSE 2016.
Poorna Sundari

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