What is Poverty?

The state of being inferior in quality or insufficient in amount.

Poverty is lack of shelter, food, clothes.

 TWO TYPES OF POVERTY
RELATIVE POVERTY
Under Relative poverty the
economic conditions of
different regions or
countries is compared. The
capital income and the
national income are the two
indicators of relative
poverty. According to the
UNO those countries are
treated poor whose per
capita income is less than
US $725 per annum.
ABSOLUTE POVERTY
Absolute poverty refers to
the measure of poverty ,
keeping in view the per
capital intake of calories
and minimum level of
consumption .
Absolute poverty measures
poverty in relation to the
amount of money necessary
to meet basic needs such as
food, clothing, and shelter
EXPENDIURE METHOD INCOME METHOD
 Swarna Jayanti Gram Swarozgar Yojana (SGSY)
Sampoorna Gramin Rozgar Yojana (SGRY)
Pri e Mi isters Rozgar Yoja a PMRY
Swarnajayanti Shahari Rozgar Yojana (SSRY)
Pradhan Mantri Gramodaya Yojana (PMGY)
National Rural Employment Guarantee Act (NREGA)
POVERTY IN THE WORLD
 Poverty in the States of India
O e half of I dia s poor is lo ated the three
states of Uttar Pradesh, Bihar, and Madhya
Pradesh
Maharashtra, West Bengal and Orissa account
for 22.5% of poverty
 Unemployment in India

Unemployment occurs when a person who is actively

searching for employment is unable to find work.
Unemployment is often used as a measure of the health of
the economy. The most frequently cited measure of
unemployment is the unemployment rate. This is the number
of unemployed persons divided by the number of people in
the labour force.
 Types of Unemployment
Seasonal Unemployment
Normally when we talk of employed people we mean those who
have work throughout the year. But this may not possible for all. In
agriculture, work is seasonal even though agricultural activities are
performed throughout the year. During the peak agricultural
seasons (when the crop is ready for harvesting) more people are
required for work. Similarly in the sowing, weeding and
transplantation period more labor is required.
Voluntary Unemployment
People who are unwilling to work at prevailing wage rate and
people who get a continuous flow of income from their property or
any other sources and need not to work, such people are
voluntarily unemployed.
 Frictional Unemployment
Unemployment attributable to the time required to match production
activities with qualified resources. Frictional unemployment essentially
occurs because resources, especially labor, are in the process of moving
from one production activity to another. Employers are seeking workers
and workers are seeking employment, the two sides just haven't
matched up.

Causal Unemployment
Cyclical unemployment is based on a greater availability of workers than
there are jobs for workers. It is usually directly tied to the state of the
economy. Lower demand for products due to lack of consumer
confidence , disinterest, or reduction in consumer spending results in
the workforce cutting back on production
 Disguised Unemployment
It is a situation in which a person appears to be employed, but
enough work is not available. Too many workers are engaged
in doing in a small job.

Unemployment Rate in India

From 1983 till 2011, Unemployment rates in India averaged 9
percent reaching an all time high of 9.4 percent in December
2010 and a record low of 3.8 Percent in December 2011. In
India, the unemployment rate measures the number of
people actively looking for a job as a percentage of the labor
force.
5.20 2012
4.90 -2013
Causes and factors of Unemployment
Over population.
Seasonal nature of certain works.
Economic fluctuations
Extensive Automation and use of IT which has
replaced man power.
Skill Gap
Ineffective education system
 INFLATION
Inflation is the rate at which the general level of prices for goods and
services is rising and, consequently, the purchasing power of currency is
falling. Central banks attempt to limit inflation, and avoid deflation, in
order to keep the economy running smoothly.
Hyper Inflation: Hyperinflation is an extremely rapid period of inflation,
usually caused by a rapid increase in the money supply. Usually due to
unrestrained printing of fiat currency

Types:
Demand pull inflation this occurs when the economy grows quickly and
starts to o erheat Aggregate demand (AD) will be increasing faster
than aggregate supply.

Cost push inflation this occurs when there is a rise in the price of raw
materials, higher taxes, etc.
Wage Push Inflation
Rising wages tend to cause inflation. In effect this is a combination
of demand pull and cost push inflation. Rising wages increase cost
for firms and so these are passed onto consumers in the form of
higher prices. Also rising wages give consumers greater disposable
income and therefore cause increased consumption. In the 1970s,
trades unions were powerful in the UK. This helped cause rising
nominal wages; this was a significant factor in causing inflation.

Imported Inflation.
A depreciation in the exchange rate will make imports more
expensive. Therefore, the prices will increase solely due to this
exchange rate effect. A depreciation will also make exports more
competitive so will increase demand.
 HUMAN DEVELOPMENT
Hu a de elop e t is a pro ess of ide i g
peoples choices as well as raising the level of well-
ei g a hie ed
At all levels of development, the three essential
choices for people are
to live a long and healthy life
to acquire better knowledge
To have access to resources needed for a decent
standard of living.
ESSENTIAL COMPONENTS
OF HUMAN DEVELOPMENT

1. EQUITY

2. SUSTAINABILITY

3. PRODUCTIVITY

4. EMPOWERMENT
 Human Development Index

Human Development Index (HDI)

Dimensions Long and healthy life Knowledge Decent standard of living

Dimensions Life expectancy index Education index GDP index

index

Indicator Life expectancy at birth Adult literacy rate GDP per capita (PPP US$)

Gross enrollment ratio

Concept was introduced by YALE UNIVERSITY in 1990

 Calculating the HDI

HDI = 1/3( life expectancy index ) + 1/3 (education index)+1/3(GDP index)

Dimension index = actual value minimum value
(LEI,EI,GDPI) maximum value minimum value
Goal post for calculating the HDI
Indicator maximum value minimum value
Life expectancy at birth (years ) 85 25
Adult literacy rate (%) 100 0
Combined gross enrolment ratio (%) 100 0
GDP per capita ( PPP US $) 40,000 100
 IMPORTANCE OF HUMAN
DEVELOPMENT
1. IMPROVES PRODUCTIVITY
2. BETTER UTILISATION OF RESOURCES
3. CONTROLS POPULATION GROWTH
4. SAFEGUARDS PHYSICAL ENVIRONMENT
5. IMPROVES THE QUALITY OF LIFE
6. ENCOURAGES RESEARCH AND DEVELOPMENT
7. DEVELOPMENT OF AGRICULTURE AND
INDUSTRY
8. CHANGE IN ATTITUDE
9. HIGHER RETURNS
 High
Development
Moderate Development
Human Development Index-
Low Development
 Rural Development
Rural development is a strategy designed to
improve the economic and social life of rural
poor.
It is a process, which aims at improving the well
being and self realization of people living
outside the urbanized areas through collective
process.
Rural Development is all about bringing change
among rural community from the traditional
way of living to progressive way of living. It is
also expressed as a movement for progress
The United Nations defines Rural Development
as:
Rural Development is a process of change, by which the efforts
of the people themselves are united, those of government
authorities to improve their economic, social and cultural
conditions of communities in to the life of the nation and to
e a le the to o tri ute fully to atio al progra e.
 OBJECTIVES OF RURAL
DEVELOPMENT
1. To develop farm, home, public service and
village community.
2. To bring improvement in producing of crops
and animals living condition.
3. To improve health and education condition
etc. improvement of the rural people.
4. To improve villagers with their own efforts.
5. To improve village communication.
 Major Challenges for Rural Transformation
Untapped Unemployment, Under-
Lack of Conducive Low employment and seasonal
Environment for Emerging
Contributio employment , Low
Entrepreneurship Opportunitie
n in GDP Productivity in agriculture
s for & allied sectors
livelihood

Low Inadequate Low coverage and

Large segment dependent on
Agriculture, Small & Marginal Farmers , Productivity Social assistance under
Low capacity to invest, low output in Rain fed Security NSAP: National
Agriculture System Social Assistance
Programme

Lack of Financial Low level of skill &

Inclusion, Inaccessibility Inadequacy Poverty education, Low
to credit, High lending of Credit Trap Productivity &
rate by MFI and informal unsustainable Income
source of finances

Weak Local Institutions,

Poor connectivity and Poor low public participation
Lack of Delivery
marketing Infrastructure, Infrastructure and democratic
Lack of power & other Mechanism decentralization
facilities
 Problems of Growth
Corruption and policy paralysis
Economic uncertainty
Over population
Deficit
Illiteracy
More Import less export
Skill Gap
 Price Policy
Dumping
Anti dumping
Penetration
Skimming