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POVERTY & INEQUALITY
Contents1. PovertyOther Ways of Categorizing the Poor-Poverty Estimation in Pre-independent IndiaPoverty Estimation in Independent IndiaAbout Multidimensional Poverty IndexIndia specific Findingso India’s MPI value reduced from 0.283 in 2005-06 to 0.123 in 2015-16.Limitations of MPIEconomic ReasonsHistorical ReasonsSocial ReasonsGovernment PoliciesMiscellaneous ReasonsMajor areas of concern which prevent successful implementation of these programs are-1.9.1. Nobel Prize in EconomicsWhat are Randomised Control Trials?How RCTs Work?2. InequalityA. Gini Coefficient/ Gini IndexShortcomings of Gini CoefficientsB. Atkinson’s inequality measure (or Atkinson’s index)C. Hoover index (also known as the Robin Hood index, Schutz index or Pietra ratio)D. Theil index and General Entropy (GE) measuresA. Decile dispersion ratio (or inter-decile ratio)B. Palma RatioC. 20/20 Ratioinequality existing in India-Inequality in World2.6.1. Inequality and Economic GrowthInequality is good for the GrowthInequality is bad for Growth2.6.2. Inequality and PovertyOther Impacts of InequalityOxfam has given following recommendations to reduce Income Inequality in India-3. Previous Years UPSC Mains Questions4. Previous Years GS Mains Questions1. The idea of Universal Basic income has gained appeal in recent months. Enumerating the challenges in its implementation, discuss whether it can be a potent tool to reduce leakages in the system and address inequality in the economy.Answer:Challenges in its implementation2. Briefly highlight the parameters used by the government to determine the extent of poverty in India. Examine the relationship of economic growth and poverty alleviation in the post-reforms era.Answer:Impact of economic reform on poverty:Issues with poverty measurementWay forward3. Despite the potential of Special Employment Programmes in alleviating poverty, their impact has largely been limited. Comment. Also discuss how they can be made more effective.Answer:Shortcomings:Shortcomings:Steps to make programs more effective:4. Discuss Financial Inclusion as a mean to Inclusive Growth? Also identify the associated issues.Answer:5. Most rural poor are excluded from the ambit of the formal financial system, which raises their dependence on informal sources as well as exposure to financial distress. In this context, explain why formal sector lending, especially to farmers, is so limited. Also suggest some steps that need to be taken to increase access to formal credit in rural areas.Answer: ♤ The declining share of small loans (less than 2 lakh).Reasons for limited formal nature of credit to farmerscould also be due to rising costs of cultivation, inflationary pressures, and more people moving out of farming ♤ A part of credit under priority lending and interest subvention scheme being diverted to agribusiness, input dealers etc.Steps required to be taken6. Examine the advantages of direct cash transfer of subsidies over other mechanisms of disbursing them. In this context, bringing out the role of JAM Trinity, identify the challenges in its implementation and suggest possible solutions to address them.Answer:AdvantagesRole of JAMChallenges in implementationFirst mileMiddle mileLast mileWay forward7. Suggest some measures to make implementation of Targeted PDS more effective. Approach:Answer:8. Starvation in the midst of plenty; this reflects the sorry state of affairs associated with the issue of food security today. In light of this statement, what role does buffer stock play in promoting food security? Comment on the Institutional Setup for the management of buffer stocks and bring forward challenges as well as solutions associated with the same.Answer:9. Financial inclusion is a pre requisite for inclusive growth in India. What do you understand by the term financial inclusion? What are the challenges to achieve financial inclusion in India? Examine the various models of financial inclusion in India.Answer:Financial Inclusion and Inclusive growthChallenges in achieving Financial InclusionBusiness correspondent Model:Bank led Model:10. Instead of running piecemeal schemes that do not address the specific challenge of poverty-ridden households it is better to use concrete tools such as SECC. In light of the above statement, explain how SECC data can be utilized to address multi- dimensional aspects of poverty.Answer:11. Rising income inequality is a widespread concern for advanced as well as emerging economies. Illustrate how inequality impedes economic growth. Also, examine the steps taken by India to tackle income inequality.Answer:Economic Growth and Income Inequality:Examining steps taken by India to reduce Income inequality:
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