Poverty, Unemployment and Human Development — UPSC Indian Economy Notes Ch. 12

Introduction

Despite decades of strong GDP growth, India continues to grapple with poverty, employment quality challenges, and human development gaps — issues measured through evolving methodologies and addressed through a wide array of social welfare and employment schemes.

Measuring Poverty in India

Committee/Method	Key Approach
Lakdawala Committee	Calorie-based poverty line, with separate rural/urban lines, state-specific price adjustments
Tendulkar Committee (2009)	Moved away from a pure calorie-norm to a broader consumption basket including health and education expenditure; provided the official poverty line for some years
Rangarajan Committee (2014)	Revised methodology further, recommending a somewhat higher poverty line than the Tendulkar Committee

💡 Multidimensional Poverty Index (MPI): NITI Aayog's National MPI (aligned with the UNDP's global MPI methodology) measures poverty across three dimensions — health, education, and standard of living — using 12 indicators, moving beyond a purely income/consumption-based definition. India has recorded a significant decline in multidimensional poverty over the past decade per successive NITI Aayog MPI reports.

Measuring Unemployment

Type	Description
Disguised Unemployment	More people employed in an activity (typically agriculture) than actually needed — removing them wouldn't reduce output
Seasonal Unemployment	Employment available only during specific seasons (e.g., agricultural labour between harvests)
Structural Unemployment	Mismatch between workers' skills and available job requirements
Frictional Unemployment	Short-term unemployment while transitioning between jobs
Cyclical Unemployment	Arising from economic downturns/business cycle contractions

India's primary official source for employment data is the Periodic Labour Force Survey (PLFS), conducted by the NSO, which tracks the Labour Force Participation Rate (LFPR), Worker Population Ratio (WPR), and Unemployment Rate (UR) on both a "usual status" and "current weekly status" basis.

Human Development Index (HDI)

Published annually by the UNDP in its Human Development Report; combines three dimensions — life expectancy at birth, education (mean and expected years of schooling), and Gross National Income (GNI) per capita.
India is typically classified in the "Medium Human Development" category, with its HDI rank showing gradual improvement over successive years, though it continues to lag in per-capita income terms relative to some peers.

Key Social Welfare and Employment Schemes

Scheme	Focus
MGNREGA (2005)	Legal guarantee of 100 days of unskilled wage employment per rural household per year — India's flagship rural employment guarantee law
National Food Security Act, 2013	Legal entitlement to subsidised foodgrains for roughly two-thirds of India's population through the Public Distribution System
Ayushman Bharat (PM-JAY)	Health insurance cover for economically vulnerable families — one of the world's largest government-funded health assurance schemes
National Social Assistance Programme	Pension support for elderly, widows, and persons with disabilities from BPL households

✅ UPSC Focus: Tendulkar vs Rangarajan Committee methodology differences · Multidimensional Poverty Index's three dimensions · Types of unemployment and their distinguishing features · PLFS as the key employment data source · HDI's three component dimensions · MGNREGA's 100-day guarantee.

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