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✅Class 9: Economics
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✅Class 9: Economics

Chapter 1 - Story of Village Palampur
Palampur Village: A Case Study in Production
  1. Overview
    1. Objective: Understanding production concepts through the story of Palampur, a hypothetical village.
    2. Key Activities in Palampur:
      1. Primary: Farming
      2. Secondary: Small-scale manufacturing, dairy, transport, etc.
    3. Resources for Production:
      1. Natural resources
      2. Man-made items
      3. Human effort
      4. Money
  1. Introduction to Palampur
    1. Location and Connectivity:
      1. Close to Raiganj (3 kms) and Shahpur town.
      2. All-weather road with multiple transport options: bullock carts, tongas, bogeys, motorcycles, jeeps, tractors, trucks.
    2. Demographics:
      1. Approximately 450 families from diverse castes.
      2. Dominant landownership by 80 upper caste families.
      3. SCs (dalits) - one third of population, residing in smaller houses (some made of mud and straw).
    3. Infrastructure:
      1. Housing: Mix of large brick houses (upper castes) and smaller structures (SCs).
      2. Electricity: Powers tubewells and small businesses.
      3. Education: Two primary schools, one high school.
      4. Healthcare: A government-run primary health centre and a private dispensary.
    4. Comparison Prompt: Students are encouraged to compare these facilities with those in a nearby village they are familiar with.
  1. Production Activities
    1. Main Activity: Farming is the predominant production activity in Palampur, similar to other Indian villages.
    2. Non-Farm Activities: These include but are not limited to:
      1. Small manufacturing
      2. Transport
      3. Shop-keeping
    3. Upcoming Sections: The narrative will explore these activities in detail, post an introduction to general production elements.
Note: The story of Palampur serves as a representative model for understanding the dynamics of production, resources, and rural infrastructure, crucial for grasping broader economic concepts.
Organisation of Production
1. Objective of Production:
  • To create goods and services that satisfy human wants.
2. Requirements for Production:
  • 2.1 Land and Natural Resources:
    • Includes all natural resources like water, forests, and minerals.
  • 2.2 Labour:
    • People who perform the work.
    • Ranges from manual laborers to highly educated workers.
  • 2.3 Physical Capital:
    • Various inputs needed at all stages of production.
    • 2.3.1 Fixed Capital:
      • Long-lasting tools, machines, buildings.
      • Examples: farmer's plough, generators, turbines, computers.
    • 2.3.2 Working Capital:
      • Consumable items: raw materials, money for immediate expenses.
      • Examples: yarn for weaving, clay for pottery.
  • 2.4 Human Capital:
    • Knowledge and enterprise to combine land, labour, and physical capital.
    • Crucial for organizing production and improving efficiency.
3. Factors of Production:
  • Combination of land, labour, physical capital, and human capital.
  • Referred to as the building blocks of production.
4. Physical Capital Simplification:
  • For ease of understanding, physical capital will be referred to as 'capital' in subsequent contexts.
5. Practical Application:
  • Example: A Factory Setting (Picture 1.2):
    • Land: Space occupied by the factory.
    • Labour: Workers operating machines, involved in manufacturing.
    • Fixed Capital: Machinery, factory building
 
Farming in Palampur
Land is Fixed
  1. Overview of Farming in Palampur
    1. Main Activity: Farming is predominant, engaging 75% of the working population.
    2. Dependents: Includes farmers and farm labourers.
    3. Limitation: Land for cultivation is fixed; no expansion since 1960.
  1. Land Utilization and Crop Pattern
    1. Land Availability: No new land under cultivation, all existing land fully utilized.
    2. Crops & Seasons:
      1. Kharif (rainy): Jowar and bajra, used as cattle feed.
      2. Intermediate: Potato (Oct-Dec).
      3. Rabi (winter): Wheat, surplus sold in Raiganj market.
      4. Annual: Sugarcane sold in Shahpur, either raw or as jaggery.
    3. Cultivation Strategy: Emphasis on multiple cropping to enhance production.
Is there a way one can grow more from one piece of Land ?
  1. Irrigation and Multiple Cropping
    1. Irrigation Development: Early electricity led to transformation from Persian wheels to electric-run tubewells.
    2. Impact on Farming:
      1. Area Coverage: Tubewells irrigate larger areas, entire 200 hectares cultivated by mid-1970s.
      2. Crop Intensity: Multiple cropping prevalent; minimum two main crops, with potatoes as a potential third.
    3. Significance of Irrigation: Crucial for increasing production, necessitates a focus on expanding the irrigated area.
  1. Modern Farming Methods
    1. Pre-Green Revolution Scenario:
      1. Seeds: Traditional, low yield, less irrigation dependent.
      2. Fertilizers: Natural (e.g., cow-dung).
    2. Green Revolution Innovations:
      1. HYV Seeds: High yielding varieties introduced for wheat and rice.
      2. Requirements: More water, chemical fertilizers, and pesticides.
      3. Result: Larger quantities of foodgrains from the same land.
    3. Adoption in India:
      1. Early Adopters: Farmers of Punjab, Haryana, Western Uttar Pradesh.
      2. Techniques Used: Tubewells, HYV seeds, chemical inputs, farm machinery.
    4. Impact in Palampur:
      1. Wheat Yield: Increase from 1300 kg/hectare to 3200 kg/hectare with HYVs.
      2. Market Surplus: Higher wheat production, more surplus for markets.
 
Will the Land Sustain ?
1. Sustainability of Land: 1.1 Importance of Land: - Land is a critical natural resource. - Essential for farming and agriculture. - Requires careful management due to its finite nature.
1.2 Challenges to Sustainability: - Modern Farming Methods: - Overexploitation of natural resources. - Soil fertility loss associated with the Green Revolution. - Excessive use of chemical fertilizers. - Groundwater Depletion: - Constant use of tubewells for irrigation. - Leads to a significant reduction in the water table. - Environmental Resource Degradation: - Resources like soil fertility and groundwater are developed over years. - Once depleted, they are challenging to restore.
1.3 Need for Environmental Care: - Vital for the future development of agriculture. - Prevention of irreversible damage to essential natural resources.
How is Land Distributed ?
2. Land Distribution in Palampur: 2.1 Overview of Land Ownership: - 450 families in total. - One-third (approx. 150 families) are landless, mainly Dalits. - 240 families own small plots of less than 2 hectares. - 60 families are medium and large farmers with more than 2 hectares. - A few large farmers possess over 10 hectares.
2.2 Challenges Faced by Farmers: - Landless Families: - No land for cultivation. - Struggle for survival and economic stability. - Small Plot Cultivation: - Scattered small plots around the village. - Inadequate income generation. - Large Landowners: - Occupy more than half the area of the village. - Economic disparity in land ownership.
Concepts
1. Factors of Production in Farming
  • 1.1 Land: Basic necessity for production.
  • 1.2 Labour:
    • Small farmers and their families provide their own labour.
    • Medium and large farmers hire farm labourers.
2. Farm Labourers
  • 2.1 Payment: Wages (cash or kind) and vary depending on region, crop, and activity.
  • 2.2 Employment Duration: Can be daily, seasonal, or annual.
  • 2.3 Challenges: Lower than minimum wages due to high competition (e.g., Dala earns Rs 160/day against the government's minimum of Rs 300/day in March 2019).
3. Capital in Farming
  • 3.1 Small Farmers:
    • Rely on borrowing due to lack of capital.
    • Face high-interest rates and distress in loan repayment.
  • 3.2 Medium and Large Farmers:
    • Use savings from previous surplus production.
    • Able to self-finance, reducing debt reliance.
4. Surplus and Market Sale
  • 4.1 Consumption vs. Sale:
    • Part of the produce is for personal consumption, the rest is surplus.
    • Small farmers have minimal surplus; most surplus comes from medium and large farmers.
  • 4.2 Revenue Usage:
    • Savings: For future capital or as loans to other farmers (e.g., Tejpal Singh).
    • Investment: In assets like more tractors, cattle, trucks, or setting up shops.
5. Economic Cycle in Farming
  • 5.1 Role of Surplus: Generates capital for subsequent farming cycles or other ventures.
  • 5.2 Diversification: Profits often reinvested into farming or other non-farming activities.
 
 
Non Farm Activities in Palampur
  1. Introduction
      • Non-farm activities constitute 25% of the work in Palampur, providing diversification beyond traditional agriculture.
  1. Dairy Farming
      • Common family activity.
      • Buffalos are principal dairy animals.
      • Feed includes grass, jowar, and bajra, primarily from the rainy season.
      • Milk sold in nearby village, Raiganj.
      • Involvement of two traders from Shahpur for wider distribution.
      • Presence of collection cum chilling centres indicates a link to more extensive markets.
  1. Small-Scale Manufacturing
      • Less than 50 people engaged, indicating a minimal scale.
      • Simple production methods, often conducted at home or in fields.
      • Predominantly relies on family labour; hiring external labour is rare.
      • Significantly different from urban manufacturing processes.
  1. Trade and Shopkeeping
      • Limited number of traders/shopkeepers.
      • Goods procured from city wholesale markets for local sale.
      • Shops sell diverse items, from groceries to stationery.
      • Proximity to the bus stand advantageous for some families, who open small shops for eatables.
  1. Transportation
      • Fast-developing sector, with increasing workforce over the years.
      • Variety of transport modes: rickshaws, tongas, jeeps, tractors, trucks, bullock carts, and bogeys
      • Services include ferrying people and goods.
      • Vital for connectivity and commerce, linking Palampur to Raiganj and beyond.
Key Themes:
  • Diversification: Families in Palampur engage in various activities aside from agriculture, highlighting economic diversification.
  • Self-Sufficiency: Most non-farm activities rely heavily on family labour, indicating a level of self-sufficiency and independence.
  • Connectivity: The growth in transportation services underscores the increasing connectivity of rural areas to urban markets.
  • Small Scale Operations: The scale of manufacturing and trade is minimal compared to urban standards, reflecting the village’s size and its inhabitants' economic capacity
Summary
  1. Evolution of Farming Practices
      • Enhanced methods increase crop yield per land unit, a critical development given the land's fixed and scarce nature.
      • New farming techniques are capital-intensive, less reliant on land.
      • Medium and large farmers reinvest savings, while small farmers struggle due to insufficient production and lack of surplus.
  1. Dilemma of Small Farmers
      • Constitute 80% of Indian farmers; face capital acquisition challenges.
      • Limited production leads to insufficient surplus, necessitating borrowing and additional work as farm labourers.
  1. Labour Dynamics and Migration
      • Ideal farming methods would use abundant labour, but current practices don't.
      • Limited farm labour opportunities lead to migration to urban areas or transition into non-farm sectors.
  1. Non-Farm Sector: Current Scenario and Potential
      • Currently, only 24 out of 100 rural workers engage in non-farm activities.
      • Non-farm sector variety exists, but individual employment numbers remain low.
  1. Future of Non-Farm Activities
      • Desirable for expansion due to lower land requirements.
      • Capital for start-up potentially from savings or, more commonly, loans.
      • Need for low-interest loans to enable start-ups for those without savings.
      • Market availability crucial for goods and services sale.
  1. Infrastructure's Role in Non-Farm Sector Expansion
      • Current markets in nearby villages, towns, cities (e.g., for milk, jaggery, wheat).
      • Improved connectivity through roads, transport, and telecommunications expected to boost non-farm opportunities.
Key Themes:
  • Innovative Farming: Adoption of advanced farming methods, though beneficial in increasing yield, places pressure on land and resources and widens the economic gap between larger and smaller farmers.
  • Capital Disparity: Small farmers, the majority in India, face capital constraints, impacting their productivity and financial stability.
  • Labour and Migration: With farming not utilizing the abundant labour, there's noticeable migration for better opportunities.
  • Non-Farm Sector Expansion: There's significant potential for growth in non-farm activities, requiring capital, low-interest financing options, and market access, facilitated by improved infrastructure
Important Points
  1. Of the total cultivated area in the country a little less than 40 per cent is irrigated even today. In the remaining areas, farming is largely dependent on rainfall
  1. The standard unit of measuring land is hectare, though in the villages you may find land area being discussed in local units such as bigha, guintha etc. One hectare equals the area of a square with one side measuring 100 metres. Can you compare the area of a 1 hectare field with the area of your school ground?
Chapter 2 - People as Resource
People as Resource
1. Concept Overview: 1.1. People as Resource: This idea refers to the population as an economic asset, not a burden. 1.2. Human Capital: When investments are made in people through education, training, and healthcare, they become human capital, possessing skills and productive knowledge.
2. Population and Productivity: 2.1. Productive Aspect: Viewing people as resources emphasizes their ability to contribute to Gross National Product (GNP). 2.2. Human vs. Physical Capital: Human resources, unlike land or physical capital, can enhance productivity and use other resources effectively.
3. Investment in Human Capital: 3.1. Returns on Investment: Education, training, and healthcare lead to higher incomes and productivity. 3.2. Societal Gains: Benefits of a healthier, more educated population extend to society, not just individuals.
4. Population Perception in India: 4.1. Past Viewpoint: For decades, India’s large population was seen as a liability. 4.2. Shift in Perspective: Through investment in human capital, a large population can become a productive asset.
5. Case Studies: 5.1. Sakal: - Education: Received formal education and a degree in computer programming. - Health: Physically strong, rarely needed medical attention. - Outcome: Secured a job in a private firm, earning a substantial income. 5.2. Vilas: - Education: Lacked formal education. - Health: Suffered from arthritis and couldn't afford medical care. - Outcome: Continued his mother’s work with minimal income.
Note: Sakal’s education improved his quality of labor and productivity, benefiting the economy. Vilas, without access to education or healthcare, remained an unskilled laborer.
6. Returns from Human Resource Investment: 6.1. Future Benefits: Investment in education and healthcare for people can yield high future returns, like higher earnings and societal contributions. 6.2. Parental Impact: Educated parents invest more in their children’s education and health, creating a virtuous cycle. Conversely, disadvantaged parents might perpetuate a cycle of poverty.
7. Global Perspective: 7.1. Example of Japan: Despite lacking natural resources, countries like Japan have thrived by investing heavily in human resources. 7.2. Resource Utilization: Efficient use of available resources, enhanced by educated and healthy people, can make a country wealthy and developed.
Key Takeaways:
  • Human capital is a critical asset that drives a country's productivity and economic growth.
  • Investment in human capital transforms the population from a liability into a resource.
  • The societal benefits of investing in people’s education and health extend beyond individual gains.
  • Real-world examples (e.g., Japan) show that countries can achieve high levels of development by prioritizing human capital, even without abundant natural resources.
Economic Activities by Men and Women
1. Economic Activities Overview: 1.1. Types of Economic Activities: - Primary Sector: Agriculture, forestry, animal husbandry, fishing, poultry farming, mining, and quarrying. - Secondary Sector: Manufacturing. - Tertiary Sector: Trade, transport, communication, banking, education, health, tourism, services, insurance, etc. 1.2. Purpose: Production of goods and services, adding value to national income.
2. Classification of Economic Activities: 2.1. Market Activities: - Involves remuneration. - Includes production of goods or services, including government services. 2.2. Non-Market Activities: - Production for self-consumption. - Consumption and processing of primary products and own-account production of fixed assets.
3. Gender Division in Economic Activities: 3.1. Historical and Cultural Context: - Labor division based on gender. - Women: domestic chores. - Men: fieldwork and earning. 3.2. Economic Recognition: - Household work by women not included in National Income. - Men's work outside recognized and remunerated.
4. Women in the Labour Market: 4.1. Payment for Work: - Women paid when they enter the labor market. - Earnings based on education and skill. 4.2. Challenges for Women: - Lower education and skill levels. - Lower pay compared to men. - Predominantly in sectors with no job security. - Meagre legal protection and basic facilities. 4.3. Women in High Skill Jobs: - High education and skill: paid equally to men. - Sectors: teaching, medicine, administration, scientific and technological fields.
5. Importance of Education: 5.1. Role in Economic Opportunity: - Enhances utilization of economic opportunities. - Major determinant of earnings in the market.
Quality of Population - Education
1. Quality of Population:
  • Depends on: 1.1. Literacy Rate 1.2. Health (indicated by life expectancy) 1.3. Skill Formation
  • Impact:
    • Decides country's growth rate.
    • Literate and healthy population considered an asset.
2. Education's Role:
  • Individual Impact:
    • Opens new horizons.
    • Provides aspirations.
    • Develops life values.
  • Societal Impact:
    • Enhances national income.
    • Cultivates cultural richness.
    • Increases governance efficiency.
3. Educational Developments & Policies:
  • Provisions:
    • Universal access, retention, quality in elementary education, emphasis on girls.
    • Pace-setting schools (e.g., Navodaya Vidyalaya).
    • Development of vocational streams.
  • Investment:
    • Increased from Rs 151 crore (first plan) to Rs 99,300 crore (2020–21).
    • Expenditure on education as % of GDP: 0.64% (1951–52) to 3.1% (2019–20), then declined to 2.8% (2020–21 B.E.).
  • Literacy Rate:
    • Increased from 18% (1951) to 85% (2018).
    • Disparity exists: Gender (male literacy higher by 16.1%), Location (urban higher by 14.2%), State (94% in Kerala vs. 62% in Bihar).
4. Challenges in Education:
  • Primary Education:
    • Expansion to over 7,78,842 schools (2019–20).
    • Issues: Poor quality, high dropout rates.
  • Initiatives:
    • Sarva Siksha Abhiyan: Universal elementary education for ages 6–14 by 2010.
    • Bridge courses, back-to-school camps.
    • Mid-day meal scheme.
5. Higher Education:
  • Gross Enrolment Ratio (GER):
    • 27% for ages 18-23 (2019–20); aligns with world average.
  • Strategies:
    • Increase access and quality.
    • State-specific curriculum, vocationalisation, IT usage.
    • Emphasis on various forms of education: Formal, non-formal, distance, IT education.
  • Growth Over 60 Years:
    • Significant increase in universities and specialized institutions.
    • Enhanced college numbers, student enrolment, teacher recruitment (1951 to 2019–20).
Quality of Population - Health
1. Health's Role in Efficiency:
  • Impact on Work:
    • Health affects potential and illness-fighting ability.
    • Poor health = decreased efficiency and output.
  • Well-being:
    • Health is crucial for overall well-being.
2. National Health Priorities:
  • Policy Objectives:
    • Improve healthcare accessibility.
    • Enhance family welfare and nutritional services.
    • Focus especially on underprivileged populations.
3. Healthcare Infrastructure:
  • Development Over Five Decades:
    • Significant health infrastructure established.
    • Manpower developed for primary, secondary, and tertiary sectors.
  • Public and Private Sectors:
    • Facilities exist in both sectors.
  • Challenges:
    • Many places still lack basic facilities.
4. Medical and Dental Colleges:
  • Statistics:
    • 542 medical colleges.
    • 313 dental colleges.
  • Geographical Disparity:
    • Major concentration in four states: Andhra Pradesh, Karnataka, Maharashtra, and Tamil Nadu.
 
 
Unemployment
1. Definitions and Concepts:
  • Unemployment:
      • Defined as the scenario where individuals willing to work at prevailing wages can't find jobs.
  • Workforce Population:
      • Ranges from ages 15 to 59.
  • Non-workers:
      • Individuals like Sheela (homemaker), Jeetu, and Seetu (children) aren't considered unemployed.
2. Types of Unemployment:
Rural Areas:
  1. Seasonal Unemployment:
      • Common in agriculture.
      • Work available only during certain seasons.
  1. Disguised Unemployment:
      • Appears in family-run agricultural activities.
      • More people working than actually needed.
Urban Areas:
  • Predominantly educated unemployment.
  • Youths with degrees unable to find jobs.
3. Consequences of Unemployment:
  • Economic Impact:
    • Wastage of manpower resources.
    • Individuals become economic liabilities.
  • Social Impact:
    • Leads to despair and hopelessness among youth.
    • Adversely affects quality of life and health.
    • Increases economic overload on working population.
4. Employment Scenario in India:
  • General Trends:
    • Statistically low unemployment rate, but large underemployed segment.
    • Inadequate income despite employment.
    • Predominance of self-employment, especially in agriculture.
  • Sector-wise Analysis:
      1. Agriculture:
          • Traditional labour-absorbing sector.
          • Experiencing reduction in dependence due to disguised unemployment.
      1. Secondary Sector:
          • Small scale manufacturing as major labour source.
      1. Tertiary Sector:
          • Emergence of new services (e.g., IT, biotechnology).
5. Migration for Employment:
  • Surplus labour migrating for jobs.
  • Disguised unemployment in agriculture leads to search for new opportunities.
 
 
Extra Concepts
  1. India’s Green Revolution is a dramatic example of how the input of greater knowledge in the form of improved production technologies can rapidly increase the productivity of scarce land resources. India’s IT revolution is a striking instance of how the importance of human capital has come to acquire a higher position than that of material, plant and machinery
  1. These measures, which have been adopted, have increased the life expectancy to over 69.4 years in 2016. *Infant mortality rate (IMR) has come down from 147 in 1951 to 36 in 2020. **Crude birth rates have dropped to 20.0 (2018) and ***death rates to 6.2 (2018) within the same duration of time. Increase in life expectancy and improvement in childcare are useful in assessing the future progress of the country. Increase in longevity of life is an indicator of good quality of life marked by self-confidence. Reduction in infant mortality involves the protection of children from infection, ensuring the nutrition of both the mother and the child, and childcare.
Chapter 3 - Poverty in India
Understanding Poverty in India
Definition and Perception: Poverty in India is a complex, multifaceted issue. It's not just about not having enough money, but also about not being able to meet basic needs such as food, shelter, education, and healthcare. It's also linked with a person's sense of helplessness and their treatment in society.
Extent: It's a widespread issue, with roughly every fifth person in India living in poverty. This equates to about 270 million people, as of the data from 2011-2012, making India the home of the largest concentration of poor people in the world.
Dimensions of Poverty
Social Scientists' View: Experts don't just consider income and consumption levels when looking at poverty. They also consider factors like education levels, healthcare access, job opportunities, and availability of clean water and sanitation facilities. There's also a focus now on understanding poverty through lenses of social exclusion and vulnerability.
Social Exclusion: This refers to the poor often being stuck in poor surroundings and not getting the same opportunities as others. For instance, certain castes in India historically have been, and in some cases continue to be, shut out from equal opportunities due to systemic issues.
Vulnerability: This is about the likelihood of certain people or communities becoming or staying poor. Factors include the kinds of jobs people have access to, their health status, and how capable they are of dealing with crises like natural disasters or job loss.
Poverty Line Concept
Definition: The poverty line is a certain threshold of income or consumption, below which a person is considered to be living in poverty. This threshold can change based on time and location.
Calculation in India: In India, this line is calculated considering basic needs and specific calorie requirements (which differ between rural and urban areas due to differing lifestyles). For the year 2011-2012, this was set at Rs 816 per person per month in rural areas and Rs 1000 in urban areas.
International Standard: For comparison between countries, organizations like the World Bank use a standard threshold, like $1.90 per person per day.
Anti-Poverty Measures
Government Initiatives: The government has various programs aimed at reducing poverty, which might involve job programs, education initiatives, health services, and more. They also work to improve things like agriculture and infrastructure, which can help lift people out of poverty.
Challenges: There are many hurdles to these efforts, including making sure programs are implemented effectively and actually reach the people who need them most. There's also the bigger task of addressing the root causes of poverty, such as inequality and social exclusion.
Broader Concept of Human Poverty
Aspects: This idea suggests that poverty isn't just about income, but also about quality of life. It includes things like dignity, mental and physical health, and opportunities for personal development.
Significance: It suggests that efforts to reduce poverty need to be holistic, focusing not just on money but also on human rights and opportunities for people to reach their full potential.
Poverty Estimates in India
1.1 Decline in Poverty
  • 1993-94: Approximately 45% below the poverty line.
  • 2004-05: Decreased to 37.2%.
  • 2011-12: Further reduced to about 22%.
  • Projection: Less than 20% in the next few years if the trend continues.
  • Notable reduction: Number of poor declined from 407 million in 2004–05 to 270 million in 2011–12.
  • Average annual decline: 2.2 percentage points from 2004–05 to 2011–12.
Vulnerable Groups
2.1 Disproportionate Poverty
  • Highest in Scheduled Castes (SCs) and Scheduled Tribes (STs).
  • Rural agricultural and urban casual labor households also significantly affected.
2.2 Specific Statistics
  • 43% of Scheduled Tribes below the poverty line.
  • 34% of urban casual workers in poverty.
  • 29% of Scheduled Castes in poverty.
  • Notable concern: Double disadvantage for landless casual wage labor households in SCs and STs.
2.3 Intra-family Inequality
  • Women, elderly, and female infants often have unequal access to family resources.
Inter-State Disparities
3.1 Variations in Poverty Levels
  • Significant state-by-state differences in poverty ratios.
  • Some states, like Madhya Pradesh, Assam, Uttar Pradesh, Bihar, and Odisha, have higher than average poverty levels.
3.2 State-Specific Observations
  • Highest poverty: Bihar (33.7%) and Odisha (32.6%).
  • Significant decline: Kerala, Maharashtra, Andhra Pradesh, Tamil Nadu, Gujarat, and West Bengal.
  • Successful reduction strategies:
    • Punjab and Haryana: High agricultural growth.
    • Kerala: Human resource development.
    • West Bengal: Land reform.
    • Andhra Pradesh and Tamil Nadu: Public food grain distribution
 
Global Poverty Scenario
1. Global Poverty Overview
  • 1.1 Definition: Extreme economic poverty is defined by the World Bank as living on less than $1.90 per day.
  • 1.2 General Trend: There's been a significant reduction from 36% (1990) to 10% (2015) in global poverty.
2. Regional Variations
  • 2.1 Asia:
    • 2.1.1 China:
      • Massive reduction due to economic growth and investments in human development.
      • Poverty rates plummeted from 88.3% (1981) to 0.6% (2019).
    • 2.1.2 South Asia:
      • Notable decline: 34% (2005) to 15.2% (2014).
      • Significant drop in the number of poor: 510.4 million (2005) to 274.5 million (2013).
      • Note: Different poverty line definitions make poverty in India appear higher than national estimates.
  • 2.2 Sub-Saharan Africa:
    • Decreased but still high: 51% (2005) to 40.2% (2018).
  • 2.3 Latin America:
    • Marked decrease: 10% (2005) to 4% (2018).
  • 2.4 Former Socialist Countries:
    • Resurgence of poverty noted, e.g., Russia.
3. United Nations' Goals:
  • 3.1 Sustainable Development Goals:
    • Proposes an end to all forms of poverty by 2030
Key Takeaways:
  • Major strides have been made globally in reducing poverty, but regional disparities exist.
  • Asia shows the most dramatic reduction, primarily due to developments in China and South Asia.
  • Sub-Saharan Africa and former socialist countries are areas of concern due to high/extant poverty levels.
  • The UN's goals set an ambitious target to eradicate poverty universally by 2030
Causes of Poverty in India
1. Causes of Poverty in India:
  • 1.1 Historical Context:
      • 1.1.1 Colonial Impact:
      • Low economic development due to British colonial policies.
      • Ruination of traditional handicrafts and discouragement of industries, e.g., textiles.
  • 1.2 Economic Stagnation:
      • Persistent low growth rate until the 1980s led to:
      • Limited job opportunities.
      • Low income growth rate.
      Compounded by high population growth, resulting in minimal per capita income growth.
  • 1.3 Failure of Economic and Population Policies:
      • Ineffective promotion of economic growth and population control continued the poverty cycle.
2. Partial Advancements:
  • 2.1 Agricultural Sector:
      • The Green Revolution and irrigation spread created jobs but were geographically limited.
  • 2.2 Industrial Sector:
      • Public and private industries created jobs but not enough for all job seekers.
3. Urban Poverty:
  • 3.1 Informal Employment:
      • Lack of proper urban jobs led to informal employment, e.g., rickshaw pullers, vendors.
  • 3.2 Slum Living:
      • Low incomes led to slum residences, extending poverty from rural to urban areas.
4. Income Inequalities:
  • 4.1 Disparities in Wealth:
      • Major factor: Unequal distribution of land and resources.
  • 4.2 Ineffective Policies:
      • Land reforms and other redistributive initiatives poorly implemented by state governments.
5. Socio-cultural and Economic Factors:
  • 5.1 Social Obligations:
      • Even the poor spend significantly on social and religious ceremonies.
  • 5.2 Agricultural Inputs:
      • Small farmers' need for money for seeds, fertilizers, pesticides, etc.
  • 5.3 Indebtedness:
      • Lack of savings leads to borrowing, and inability to repay perpetuates poverty.
6. Indebtedness - A Vicious Cycle:
  • 6.1 Both a Cause and Effect:
      • High levels of indebtedness result from and contribute to continued poverty.
Key Takeaways:
  • Poverty in India is a result of historical, socio-economic, and political factors.
  • The country's colonial past, policy failures, and income inequalities have significantly contributed to the persistent poverty.
  • Attempts at advancement, such as the Green Revolution and land reforms, had limited success due to partial implementation and geographic limitations.
  • Urban migration has extended the reach of poverty, and social obligations exacerbate financial strain.
  • Indebtedness is a critical issue, acting as both a cause and a consequence of poverty
Anti Poverty Measures
1. Introduction 1.1. Poverty eradication is a primary goal of India's developmental strategy. 1.2. Strategy relies on two key aspects: 1.2.1. Promotion of economic growth 1.2.2. Targeted anti-poverty programs
2. Historical Context 2.1. Little improvement in poverty levels and per capita income growth from 1950s to early 1980s. 2.2. Economic growth surged in the 1980s, with an average annual growth rate jumping to about 6%.
3. Link Between Economic Growth and Poverty Reduction 3.1. Economic growth fosters opportunity and resources for human development. 3.2. Enhances education investment, including for girls. 3.3. Direct benefits to the poor are not always guaranteed. 3.4. Agricultural growth has not met expectations, affecting rural poverty.
4. Need for Targeted Anti-Poverty Programmes 4.1. Several schemes have direct or indirect impact on poverty. 4.2. Key initiatives include: 4.2.1. Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), 2005: Employment in rural areas, with focus on women and sustainable development. 4.2.2. Prime Minister Rozgar Yojana (PMRY), 1993: Self-employment for educated unemployed youth. 4.2.3. Rural Employment Generation Programme (REGP), 1995: Self-employment in rural areas, with a significant job creation target. 4.2.4. Swarnajayanti Gram Swarozgar Yojana (SGSY), 1999: Assisting poor families through self-help groups, credit, and government subsidy. 4.2.5. Pradhan Mantri Gramodaya Yozana (PMGY), 2000: Central assistance for basic services in states. 4.2.6. Antyodaya Anna Yojana (AAY): Focus on food security (more details in subsequent chapters).
5. Challenges in Implementation 5.1. Mixed results due to issues like improper implementation and incorrect targeting. 5.2. Overlapping of schemes, with benefits not fully reaching the deserving poor. 5.3. Recent emphasis on better monitoring of programs.
Challenges Ahead
6. The Challenges Ahead 6.1. Poverty has declined, but remains a significant challenge. 6.2. Disparities exist between urban and rural areas, and among states. 6.3. Certain groups are more vulnerable. 6.4. Expectations of significant poverty reduction in the next 10-15 years due to various factors.
7. Broader Concept of Poverty 7.1. Official definitions are often too narrow, focused on subsistence rather than a reasonable living standard. 7.2. Advocacy for a "human poverty" concept, encompassing aspects like education, healthcare, job security, discrimination, and dignity. 7.3. Global development changes poverty definitions, making eradication a moving target. 7.4. Future goals: beyond income, focus on healthcare, education, job security, gender equality, and dignity.
Summary: India's anti-poverty efforts focus on economic growth and targeted programs. Despite growth since the 1980s, poverty remains, particularly in rural areas. Various schemes address employment, self-employment, and basic services, but face implementation challenges. Moving forward, understanding poverty must go beyond income to consider overall human development and dignity.
Chapter 4 - Food Security in India
Introduction to Food Security in India
1. Understanding Food Security:
  • Definition: Ensuring that all people have access to enough high-quality food to lead active, healthy lives.
  • Dimensions:
    • 1.1. Availability: Sufficient food production, imports, and stocks in government granaries.
    • 1.2. Accessibility: Food is easily reachable by everyone.
    • 1.3. Affordability: Individuals can financially afford nutritious and sufficient food.
  • Requirements for Food Security:
    • 1.4. Sufficient food for everyone.
    • 1.5. Economic capacity for all individuals to purchase food.
    • 1.6. Unhindered access to food.
2. Importance of Food Security:
  • Addressing Vulnerability: Especially crucial for poor households that are more susceptible to food production and distribution issues.
  • During Calamities: Essential during natural disasters (earthquakes, droughts, floods, tsunamis) or crop failures that lead to food shortages, price hikes, and potential famines.
  • Historical Context: Reference to the Bengal Famine of 1943 that resulted in significant deaths, highlighting the extreme consequences of food insecurity.
  • Pandemic Impact: E.g., COVID-19 restrictions that affected economic activities, movement, and food security.
3. Evolution of the Concept of Food Security:
  • 1970s Understanding: Initially focused solely on the consistent availability of basic foodstuffs (UN, 1975).
  • Amartya Sen’s Contribution: Added the dimension of “access,” emphasizing the importance of ‘entitlements,’ or the means through which people acquire food (production, market exchange, or social aids).
  • 1995 World Food Summit: Expanded definition to include physical and economic access to safe and nutritious food, recognizing the need for a proactive approach to poverty eradication as a means to improve food access (FAO, 1996).
4. Public Distribution System (PDS) & Government Role:
  • PDS: Critical for food security, ensuring the availability and distribution of essential commodities, especially for the socio-economically disadvantaged.
  • Government Oversight: Necessary for addressing threats to food security, maintaining sufficient food stocks, and managing prices and food quality.
Who are Food Secure ?
1. Groups Vulnerable to Food Insecurity:
  • Rural Areas:
    • 1.1. Landless individuals or those with minimal land.
    • 1.2. Traditional artisans and service providers.
    • 1.3. Petty self-employed workers and destitutes.
  • Urban Areas:
    • 1.4. Families with low-income, ill-paid occupations.
    • 1.5. Workers in seasonal activities or casual labor markets.
2. Social Composition and Food Insecurity:
  • Affected Communities:
    • 2.1. SCs, STs, and lower sections of OBCs: Typically with poor land resources or low land productivity.
    • 2.2. Natural disaster-affected migrants: Searching for work elsewhere.
  • 2.3. High Malnutrition among Women: Affects women's health and the nutrition of unborn children.
  • 2.4. Children under 5 and mothers: Significant segment of the food-insecure population.
3. Geographical Concentration of Food Insecurity:
  • 3.1. Regions: Economically backward states, tribal areas, disaster-prone regions.
  • 3.2. Specific States: Eastern Uttar Pradesh, Bihar, Jharkhand, Orissa, West Bengal, Chattisgarh, parts of Madhya Pradesh and Maharashtra.
4. Hunger and Food Insecurity:
  • 4.1. Chronic Hunger: Due to persistently inadequate diets, often linked to extreme poverty.
  • 4.2. Seasonal Hunger: Linked to food production cycles or employment seasonality.
  • 4.3. Impact: Hunger perpetuates poverty by reducing people's capacity to work and achieve food security.
5. Foodgrain Self-Sufficiency in India:
  • 5.1. Post-Independence Goal: Policies aimed at self-sufficiency in foodgrain production.
  • 5.2. Green Revolution: Focused on increasing wheat and rice production; commemorated by ‘Wheat Revolution’ stamp in 1968.
  • 5.3. Disproportionate Growth in Foodgrain Production: Varies significantly among states.
  • 5.4. Production Data (2015-16):
    • Total foodgrain: 252.22 million tonnes.
    • Wheat (UP and MP): 26.87 and 17.69 million tonnes respectively.
    • Rice (West Bengal and UP): 15.75 and 12.51 million tonnes respectively.
  • 5.5. Growth (2016-17): Increased to 275.68 million tonnes.
Food Security in India ?
1. Food Security in India:
  • 1.1 Green Revolution (early-1970s): Led to self-sufficiency in foodgrains due to diverse crops across the nation.
  • 1.2 Famine Prevention: No famine occurrences, even during adverse weather, due to foodgrain availability.
2. Buffer Stock:
  • 2.1 Definition: Government stock of foodgrains (wheat, rice) procured through the Food Corporation of India (FCI).
  • 2.2 Procurement and MSP:
    • 2.2.1 Purchases made from farmers in surplus states.
    • 2.2.2 Farmers compensated at Minimum Support Price (MSP), announced annually before sowing.
  • 2.3 Storage: Foodgrains stored in granaries.
  • 2.4 Purpose:
    • 2.4.1 Distribution in deficit areas and to the poor at subsidized prices (Issue Price).
    • 2.4.2 Mitigation of food shortage during calamities/adverse weather.
3. Extra Concepts:
  • 3.1 National Health and Family Survey (NHFS) 1998-99:
    • 3.1.1 Around 11 crore women and children in need.
  • 3.2 Ration Cards:
    • 3.2.1 Antyodaya cards: For the poorest.
    • 3.2.2 BPL cards: For those below the poverty line.
    • 3.2.3 APL cards: For all others.
What is Public Distribution System ?
1. Public Distribution System (PDS):
  • Definition: A government-regulated program to distribute essential goods like food grains, sugar, and kerosene at subsidized prices to the poor.
  • Distribution Points: Goods are distributed through ration shops, also known as Fair Price Shops, located across cities, towns, and villages.
  • Scale: Approximately 5.5 lakh ration shops exist across India.
  • Eligibility: Families with a ration card are entitled to purchase a fixed quantity of essentials monthly at prices lower than the market rate.
2. Historical Context:
  • 1940s: Introduction of rationing in India, primarily due to the Bengal famine.
  • 1960s: Revival during acute food shortage periods before the Green Revolution.
  • Mid-1970s: Significant expansion and strengthening after high poverty levels reported by the National Sample Survey Office (NSSO).
3. Key Food Intervention Programmes:
  • Post-1970s Initiatives:
    • Integrated Child Development Services (ICDS): Launched in 1975, focusing on child health and nutrition.
    • Food-for-Work (FFW): Started in 1977-78, providing food in exchange for labor.
  • Current Scenario:
    • Several Poverty Alleviation Programmes (PAPs) are operational, primarily in rural areas, with a significant focus on food security.
    • Programs like PDS and mid-day meals are dedicated food security initiatives.
    • Employment programs contribute to food security by increasing poor families' income.
4. Importance of PDS:
  • Food Security: Ensures that the economically disadvantaged have access to basic food supplies, reducing the impact of food scarcity and price fluctuations.
  • Economic Support: Offers essential goods at subsidized rates, making them affordable for low-income families.
  • Poverty Alleviation: Complements other programs aimed at reducing poverty by addressing one of its core aspects: hunger and food access.
Current Status of PDS in India ?
1. Evolution of the Public Distribution System (PDS):
  • Initial Phase:
    • Universally accessible, without discrimination between poor and non-poor.
  • 1992: Revamped Public Distribution System (RPDS):
    • Introduced in 1,700 blocks focusing on remote and backward areas.
  • 1997: Targeted Public Distribution System (TPDS):
    • Aimed at the 'poor in all areas', initiating a differential pricing system.
  • 2000: Special Schemes:
    • Antyodaya Anna Yojana (AAY): Targeted the 'poorest of the poor'.
    • Annapurna Scheme (APS): Aimed at 'indigent senior citizens'.
2. Features of PDS:
  • Stabilizes prices, making food available at affordable prices.
  • Prevents hunger and famine by transferring food from surplus to deficit regions.
  • Supports farmers through minimum support price and procurement, encouraging foodgrain production.
3. Criticisms of PDS:
  • Prevalence of Hunger: Instances of hunger despite overflowing food stocks.
  • Wastage: Foodgrains in storage suffer from rot and infestation, as shown in Graph 4.2.
  • Overstocking: Food stocks consistently exceed buffer norms, leading to high carrying costs and quality degradation.
  • Policy Impact: Freezing of Minimum Support Price (MSP) suggested due to excessive procurement and storage issues.
  • Environmental Concerns: Shift toward rice and wheat cultivation has environmental repercussions.
4. Consumption Trends:
  • Decline: Per person consumption of rice declined from 2004-05 to 2011-12, both in rural and urban areas.
  • Increase in PDS Usage: Per capita consumption of PDS rice and wheat significantly increased since 2004-05.
5. Issues with PDS Distribution:
  • Malpractices: Incidents of grain diversion, sale of poor-quality grains, irregular shop timings, etc.
  • Unsold Stocks: Poor quality grains often remain unsold, leading to stockpiling at FCI.
  • System Decline: The introduction of TPDS with three different prices reduced the system's attractiveness, especially for families above the poverty line (APL), due to minimal price difference from the open market
Role of Cooperative
  1. General Impact of Cooperatives on Food Security in India:
      • Cooperatives contribute significantly to food security, primarily in southern and western India.
      • They establish shops to offer affordable goods to the economically disadvantaged.
  1. Specific Examples of Cooperatives:
    1. Tamil Nadu:
        • Cooperatives manage approximately 94% of fair price shops.
    2. Delhi - Mother Dairy:
        • Provides milk and vegetables at government-controlled rates.
    3. Gujarat - Amul:
        • A leading cooperative in dairy and dairy products.
        • Instrumental in India's White Revolution.
  1. Role of NGOs and Grain Banks in Maharashtra:
    1. Academy of Development Science (ADS):
        • Coordinates a network of NGOs establishing grain banks.
        • Conducts training programs on food security.
    2. Grain Banks:
        • Emerging across various regions in Maharashtra.
        • Recognized as innovative and successful food security initiatives.
    3. Government Influence:
        • ADS's work with grain banks aims to shape governmental food security policies.
Key Takeaways:
  • Cooperatives are pivotal in bolstering food security in India through various initiatives, from running fair price shops to managing dairy product distribution.
  • NGOs, facilitated by bodies like ADS, play a crucial role in enhancing food security through innovative solutions like grain banks.
  • These collective efforts not only address immediate food security needs but also influence broader governmental policies.
Extra Concepts
1. National Food Security Act, 2013:
  • Objective: Ensure food and nutritional security for the majority of the population at affordable prices, allowing them to live with dignity.
  • Coverage: Targets 75% of the rural population and 50% of the urban population as eligible for food security.
2. Antyodaya Anna Yojana (AAY):
  • Launch Date: December 2000.
  • Initial Aim: Identify and aid one crore (10 million) of the poorest families among the Below Poverty Line (BPL) households.
  • Identification Method: BPL survey conducted by state rural development departments.
  • Subsidy Details:
    • Initially, 25 kg of foodgrains per family at rates of ₹2/kg for wheat and ₹3/kg for rice.
    • Quantity increased to 35 kg/family from April 2002.
  • Expansion:
    • Added 50 lakh (5 million) BPL families in June 2003 and August 2004.
    • Total coverage rose to 2 crore (20 million) families.
3. Concept of Subsidy:
  • Definition: A payment from the government to producers to supplement the market price of a commodity.
  • Effect: Helps maintain low consumer prices and ensures higher income for domestic producers.
4. Challenges in Implementation:
  • Rising Costs: Minimum Support Prices (MSP) for foodgrains are increasing.
  • Operational Costs: Transportation and storage expenses of the Food Corporation of India (FCI) contribute to the rising costs
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