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Contents
Synopsis
During the 2000’s there was decline in poverty as was indicated by the Government data. However, now multiple data point to a rise in poverty and unemployment.
Context
Source: The Hindu
- Consumption expenditure survey (CES) is conducted and released every 5 years by NSO
- 2017-2018 data was not released, and the next set will be released in 2022.
- But based on the recent NSO’s PLFS (periodic labour force survey), the unemployment rate has reached a 45-year high and also the poverty levels.
Measurement of Poverty
- Prior to 2011, PLFS (periodic labour force survey) data was also used to estimate poverty.
- Household monthly per capita expenditure data was also collected based on Mixed Recall Period methodology.
- In 2011, the government decided to raise the poverty line as per the recommendations of the Tendulkar committee.
Rise in poverty figures
- In absence of CES data, PLFS data can be used to estimate poverty.
- NSO’s CES data 2017 (leaked) showed that rural consumption had fallen by 8% and since over 65% of the population is rural, poverty is estimated to be increased.
- The absolute number of poor had risen from 217 Mn(2012) to 270 Mn(2019). (first time since history of CES)
Reasons for increased poverty
- Demonetization and GST reforms struck a heavy blow to the unorganized sector & MSME.
- Household savings declined, Private investment fell from 31% to 28%
- Public expenditure was constrained by fiscal consolidation
- Exports fell, in absolute terms
- There was a rise in unemployment and real wages did not increase.
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