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10 Indian Economy — Common Notes 🕒 Updated 2026-10-17 ✅ Facts verified till 2026-10-17
Common Notes SSC CGL · CHSL · Police · Bank · Railway · State PSC Chapter 10

👥 Poverty, Unemployment & Human Development

Poverty line and committees, multidimensional poverty, types of unemployment, PLFS, labour codes, the VB-G RAM G Act, HDI and measures of inequality (updated to October 2026).

📌 1. Poverty & the Poverty Line

  • Absolute poverty = basic needs not met; relative poverty = lower income compared with others.
  • The first discussion of poverty in India: Dadabhai Naoroji (Poverty and Un-British Rule in India). Poverty estimates were earlier given by the Planning Commission.
CommitteeYearKey point
Y. K. Alagh Task Force1979Calorie norm: rural 2400, urban 2100 per day
Lakdawala Committee1993State-wise poverty lines, state price indices
Tendulkar Committee2009Consumption basket (incl. education, health) instead of calories; poverty 21.9% in 2011-12
Rangarajan Committee2014Poverty 29.5% in 2011-12
  • National Multidimensional Poverty Index (MPI) — NITI Aayog: 3 dimensions (health, education, standard of living), 12 indicators. Estimate: about 24.82 crore people left multidimensional poverty between 2013-14 and 2022-23.
  • Global MPI: UNDP and Oxford (OPHI). As per the World Bank, extreme poverty in India (3 US dollars a day, 2021 PPP) was 5.3% in 2022-23.

📌 2. Unemployment

TypeMeaning
DisguisedMore people than needed; marginal productivity zero — mainly in agriculture
SeasonalNo work for part of the year — farming, tourism
StructuralMismatch of skills due to change in structure/technology
FrictionalShort gap while moving between jobs
CyclicalDue to recession in the business cycle
Educated unemploymentEducated people without suitable work
  • Periodic Labour Force Survey (PLFS) — NSO, MoSPI; since 2017-18; monthly estimates since January 2025 (current weekly status, CWS).
  • Unemployment rate = unemployed ÷ labour force × 100; labour force = employed + those seeking work.
  • Four Labour Codes — Code on Wages 2019, Industrial Relations Code 2020, Code on Social Security 2020, Occupational Safety, Health and Working Conditions Code 2020 — effective from 21 November 2025, replacing 29 central labour laws.
  • VB-G RAM G Act 2025 (Viksit Bharat – Guarantee for Rozgar and Ajeevika Mission (Gramin)): in force from 1 July 2026, repealing MGNREGA 2005; guarantees every rural household 125 days of unskilled wage work per financial year (100 days under MGNREGA).

📌 3. Human Development & Inequality

  • Human Development Index (HDI): UNDP, since 1990; conceived by Mahbub ul Haq and Amartya Sen.
  • HDI's three dimensions: long and healthy life (life expectancy at birth), knowledge (mean and expected years of schooling), standard of living (GNI per capita at PPP). Value from 0 to 1.
  • Gini coefficient: 0 = perfect equality, 1 = perfect inequality; the Lorenz curve shows income distribution.
  • Kuznets curve: inequality first rises then falls as an economy develops (inverted U).
  • Demographic dividend: a growth opportunity when the working-age (15-64) share of population is high.
⚠️ Exam Traps:
  • In disguised unemployment a person seems to work, but marginal productivity is zero.
  • Tendulkar (2011-12) = 21.9%; Rangarajan (2011-12) = 29.5% — do not swap.
  • MGNREGA no longer applies — from 1 July 2026 the VB-G RAM G Act, 125 days.
  • Gini coefficient 0 = perfect equality (not 1).
💡 Memory Tip: HDI = health + education + income; MPI = health + education + living standards.

📌 4. Practice MCQs

📝 Practice MCQs (prepared by SF Prep — not PYQs)
Q1. What daily calorie norm did the Alagh Task Force (1979) use for rural areas? Practice
(A) 2100
(B) 2200
(C) 1800
(D) 2400
Correct answer: (D)
Rural 2400 and urban 2100 calories per day.
Q2. What was India's poverty ratio in 2011-12 per the Tendulkar method? Practice
(A) 21.9%
(B) 29.5%
(C) 37.2%
(D) 11.3%
Correct answer: (A)
The Tendulkar method gives 21.9% for 2011-12; the Rangarajan method gives 29.5%.
Q3. Which committee reported on poverty estimation in 2014? Practice
(A) Tendulkar Committee
(B) Lakdawala Committee
(C) Alagh Task Force
(D) Rangarajan Committee
Correct answer: (D)
The C. Rangarajan Committee reported in 2014; Tendulkar in 2009.
Q4. Who releases the National Multidimensional Poverty Index in India? Practice
(A) NITI Aayog
(B) RBI
(C) World Bank
(D) Finance Commission
Correct answer: (A)
NITI Aayog releases the national MPI; the global MPI is by UNDP and OPHI.
Q5. What are the three dimensions of the Multidimensional Poverty Index? Practice
(A) Income, jobs, housing
(B) Health, education, standard of living
(C) Agriculture, industry, services
(D) Population, literacy, sex ratio
Correct answer: (B)
The MPI uses 12 indicators (national MPI) under health, education and standard of living.
Q6. Too many people on a farm, with zero marginal productivity, is an example of: Practice
(A) Frictional unemployment
(B) Cyclical unemployment
(C) Disguised unemployment
(D) Open unemployment
Correct answer: (C)
Removing some workers would not cut output — that is disguised unemployment.
Q7. Temporary unemployment while moving from one job to another is: Practice
(A) Structural
(B) Seasonal
(C) Frictional
(D) Disguised
Correct answer: (C)
Frictional unemployment is short-lived and exists even in a healthy economy.
Q8. Unemployment caused by recession in the business cycle is called: Practice
(A) Seasonal unemployment
(B) Disguised unemployment
(C) Frictional unemployment
(D) Cyclical unemployment
Correct answer: (D)
In the downturn of the business cycle falling demand cuts jobs.
Q9. Which survey gives India's official unemployment data? Practice
(A) Periodic Labour Force Survey (PLFS)
(B) National Family Health Survey
(C) Economic Census
(D) ASER survey
Correct answer: (A)
NSO's PLFS has run since 2017-18 and gives monthly estimates since January 2025.
Q10. From when did the four Labour Codes take effect? Practice
(A) 1 April 2020
(B) 21 November 2025
(C) 1 July 2026
(D) 8 August 2019
Correct answer: (B)
All four codes took effect on 21 November 2025, replacing 29 central labour laws.
Q11. How many central labour laws did the four Labour Codes replace? Practice
(A) 29
(B) 44
(C) 15
(D) 4
Correct answer: (A)
The four codes on wages, industrial relations, social security and occupational safety merged 29 laws.
Q12. How many days of work per year does the VB-G RAM G Act 2025 guarantee rural households? Practice
(A) 100 days
(B) 150 days
(C) 125 days
(D) 200 days
Correct answer: (C)
In force from 1 July 2026, the Act replaced MGNREGA (100 days) with a 125-day guarantee.
Q13. Who publishes the Human Development Index (HDI)? Practice
(A) World Bank
(B) IMF
(C) WHO
(D) UNDP
Correct answer: (D)
The UN Development Programme (UNDP) has published the HDI in the Human Development Report since 1990.
Q14. The HDI concept is associated with: Practice
(A) Adam Smith and Ricardo
(B) Mahbub ul Haq and Amartya Sen
(C) Keynes and Hicks
(D) Marshall and Pigou
Correct answer: (B)
Pakistani economist Mahbub ul Haq developed the HDI with Amartya Sen.
Q15. Which of these is NOT a dimension of HDI? Practice
(A) Life expectancy
(B) Sex ratio
(C) Years of schooling
(D) GNI per capita (PPP)
Correct answer: (B)
HDI = health (life expectancy) + knowledge (schooling) + living standard (GNI); not sex ratio.
Q16. A Gini coefficient of 0 means: Practice
(A) Perfect inequality
(B) No income
(C) Perfect equality
(D) High poverty
Correct answer: (C)
Gini 0 = everyone has equal income; 1 = one person has all income.
Q17. The curve that shows income inequality graphically is the: Practice
(A) Laffer curve
(B) Phillips curve
(C) Demand curve
(D) Lorenz curve
Correct answer: (D)
The farther the Lorenz curve from the equality line, the greater the inequality; the Gini coefficient comes from it.
Q18. Whose idea is it that inequality first rises then falls with development (inverted U)? Practice
(A) Simon Kuznets
(B) Arthur Laffer
(C) A. W. Phillips
(D) Max Lorenz
Correct answer: (A)
The Kuznets curve shows the inverted-U link between development and inequality.
Q19. As per the World Bank, what was extreme poverty in India in 2022-23 (3 US dollars a day, 2021 PPP)? Practice
(A) 15.5%
(B) 21.9%
(C) 11.3%
(D) 5.3%
Correct answer: (D)
On the World Bank's revised 3 dollars a day line, it was 5.3% in 2022-23.
Q20. Demographic dividend is linked to: Practice
(A) A high share of working-age (15-64) population
(B) A high share of elderly population
(C) A very high birth rate
(D) Falling urbanisation
Correct answer: (A)
When working-age people are many and dependants few, a growth opportunity arises.

📝 Practice questions

Indian Economy — Practice MCQs (Bilingual) Ch 10: Poverty, Unemployment & Human Development

Practice MCQs SF Prep द्वारा तैयार (PYQ नहीं)। तथ्य RBI, MoSPI, बजट दस्तावेज़ों, PIB व अन्य आधिकारिक स्रोतों से अक्टूबर 2026 तक जाँचे गए।