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Class 12 Economics Chapter 8 Current Challenges Faced by the Indian Economy
Selected Questions & Answers
A. Very Short Answer Type Questions: (Marks for each – 1)
1. Which country has the highest per capita income in the world in terms of US dollars?
Ans: Norway.
Note: In recent global rankings, countries such as Luxembourg, Qatar, or Ireland often record higher per capita income than Norway, depending on the year and method of calculation.
2. Which state in India has the largest number of poor people?
Ans: Orissa (Odisha).
Note: In more recent estimates, Uttar Pradesh has the largest number of poor people in India.
3. What is meant by the poverty line?
Ans: The poverty line refers to the level of income or purchasing capacity that enables a person to buy the minimum basic necessities of life.
4. What percentage of people lived below the poverty line in India in 1999–2000?
Ans: 26.1 percent.
5. According to UNICEF, how many children under the age of five die in India?
Ans: Approximately 2.3 million.
Note: This figure corresponds to older estimates. In recent years, the number has declined significantly according to updated global health data.
6. What percentage of the world’s poor live in India?
Ans: One-fifth.
7. What scheme has the government adopted for elderly people, poor people, and destitute women?
Ans: NSAP scheme.
8. In which year was the Prime Minister’s Gramodaya program started?
Ans: In 2000–2001.
9. Write the name of a self-employment scheme implemented in rural and urban areas.
Ans: Prime Minister’s Gramodaya Yojana.
10. Define poverty.
Ans: Poverty is an economic condition in which a section of society, without any fault of their own, is deprived of the ability to purchase the minimum basic necessities required for survival.
11. “Our achievement (Independence) is only a step, an opening of opportunity to the greater triumphs and achievements that await us…It means the ending of poverty, ignorance, disease and inequality of opportunity.” Who said this, when, and to whom?
Ans: This statement was made by Jawaharlal Nehru in 1947 while addressing the Constituent Assembly of India.
12. Who publishes the data related to poverty?
Ans: The Planning Commission.
Note: The Planning Commission was replaced by NITI Aayog in 2015.
13. What is meant by the head count ratio?
Ans: When the proportion of people living below the poverty line is calculated as the number of poor people in the population, it is called the head count ratio.
14. What is the required calorie intake for a person in urban areas?
Ans: 2100 calories.
15. How many people in the world are unable to meet their basic needs?
Ans: More than 260 million people.
Note: Global estimates of poverty and basic deprivation vary widely depending on the criteria and year used.
16. In which year did the Planning Commission form a study group to estimate the number of poor people?
Ans: In 1962.
17. What is the name of the body formed in 1979?
Ans: Task Force on Projections of Minimum Needs and Effective Consumption Demand.
18. Who first discussed the concept of the poverty line in India during the pre-independence period?
Ans: Dadabhai Naoroji.
19. Give the definition of poverty given by the World Bank.
Ans: According to the World Bank’s World Development Report, poverty is the inability to attain a minimum standard of living..
B. Short Questions and Answers: (Marks for each – 2)
1. Write the names of two poverty alleviation programmes.
Ans: The names of two poverty alleviation programmes are:
a) Sampoorna Grameen Rozgar Yojana.
b) National Food for Work Programme.
2. How many types of poverty are there and what are they?
Ans: Poverty is of two types, namely:
a) Absolute poverty.
b) Relative poverty.
3. What is meant by the “Food for Work” programme?
Ans: In 1977, the Government of India adopted the “Food for Work” programme to provide benefits to landless agricultural labourers. According to this scheme, workers were provided food grains along with wages. These food grains were supplied free of cost by the Central Government to the State Governments.
4. How can the creation of income-generating assets solve the problem of poverty?
Ans: Poverty can be reduced through the creation of income-generating assets because such assets help create employment opportunities. When employment is generated, people’s income, efficiency, education, and even their physical and mental conditions improve. Therefore, the creation of income-generating assets can help solve the problem of poverty.
5. What is the difference between relative poverty and absolute poverty?
Ans: Relative poverty refers to the comparative difference in the income of a person in relation to others. On the other hand, absolute poverty refers to the inability of a person to meet the minimum basic necessities of life.
C. Medium Length Questions & Answers: (Marks for each – 4)
1. Mention four schemes for poverty alleviation in India.
Ans: Four schemes for poverty alleviation in India are:
(a) Jawahar Rozgar Yojana.
(b) Small Farmers Development Agency.
(c) National Social Assistance Programme.
(d) Rural Employment Programme of India.
2. Mention four causes of the poverty problem in India.
Ans: Four causes of the poverty problem in India are:
(a) Population explosion.
(b) Unequal distribution.
(c) Widespread underemployment.
(d) Unemployment problem.
3. Suppose you are a resident of a village. Mention some suggestions for solving the poverty problem there.
Ans: The following measures can be taken to solve the poverty problem in our village:
(a) Improve rural roads and communication routes.
(b) Provide land to landless farmers.
(c) Increase employment by developing small-scale and rural industries.
(d) Provide capital to villagers so that they can engage in income-generating activities.
(e) Arrange facilities for technical education.
4. What are the conditions of poverty proposed by Shaheen Rafi Khan and Damien Killen?
Ans: The conditions of poverty proposed by Shaheen Rafi Khan andDamien Killen are:
(a) Poverty is unemployment.
(b) Poverty is illness and the inability to consult a doctor.
(c) Poverty is the inability to go to school.
(d) Poverty is fear and the struggle to obtain even one meal a day.
(e) Poverty is powerlessness, lack of opportunity for representation, and lack of freedom.
5. Define cyclical poverty and occasional poverty.
Ans: Cyclical Poverty: Sometimes small farmers and seasonal labourers fall into poverty and sometimes they get out of it. These two groups of poor people are called “cyclical poor.” Occasional Poverty: Those people who remain economically well-off most of the time but occasionally fall into hardship are called “occasional poor.” Cyclical poverty and occasional poverty together are also called“temporary poverty.”
D. Essay Type Questions and Answers: (Marks for each – 6)
1. Discuss the major schemes adopted by the Government of India for poverty alleviation.
Ans: The Government of India has adopted various schemes for poverty alleviation. These are:
(a) Food for Work Programme: This programme was started in the 1970s. Under this scheme, labourers who provide labour are given a fixed quantity of food free of cost by the government along with their wages.
(b) National Rural Employment Guarantee Act: Under this Act, those who are willing to work at the minimum wage can report for work in areas where this scheme is implemented. The programme is shared between the central and state governments in the ratio of 50:50. The scheme is implemented through DRDA (District Rural Development Agency).
(c) Annapurna Scheme: This scheme was started in 2000. Through this scheme, elderly people who are not included under the old-age pension scheme are provided ten kilograms of food grains per month free of cost.
(d) Employment Assurance Scheme: Through this scheme, attempts are made to increase the income of people living below the poverty line in rural areas by providing opportunities for manual work.
(e) Jawahar Gram Samridhi Yojana: This scheme was introduced in 1989 to provide employment opportunities to members of families living below the poverty line in rural areas.
2. Discuss the causes of the poverty problem in India.
Ans: The main causes of the poverty problem in India are:
(a) Population explosion: One of the major causes of poverty in India is the excessive growth of population. The production of food grains has not increased in proportion to the population growth, resulting in increased poverty.
(b) Vicious cycle of poverty: Low income, lack of capital, and similar factors among the Indian population continue from generation to generation, causing poverty to persist in a cyclical manner.
(c) Unemployment problem: Unemployment in India has taken a serious form. Due to lack of capital or technical education, unemployed people are unable to engage in any work. As a result, poverty has become more severe.
(d) Low level of productivity: In India, improved technology has not yet been widely used in agriculture. As a result, the rate of increase in production has not grown according to the requirement, which has increased poverty.
(e) Defects in planning: There are many shortcomings in the practical implementation of India’s Five-Year Plans. Many development schemes remain only on paper, and the general public is deprived of the benefits of planning. This affects the country’s economy, and people cannot escape from the vicious circle of poverty.
(f) Rising price level: The high rate of inflation in the Indian economy reduces the real income of low-income people, thereby intensifying the poverty problem.
3. Discuss the measures to be taken for poverty alleviation in India.
Ans: Poverty has taken a severe form in India. The following measures can be adopted to solve this problem:
(a) Implement the land ceiling law effectively and distribute the surplus land among the landless people.
(b) Make the use of improved technology in agriculture accessible and convenient in order to develop agriculture and increase production.
(c) Encourage self-employment by providing suitable financial assistance for the establishment of cottage and small-scale industries in the country.
(d) Establish development centres for carrying out various projects such as animal husbandry, dairy farming, poultry farming, and fishery.
(e) Give equal importance to technical education in schools and colleges along with theoretical education.
(f) Ensure successful implementation of government schemes for poverty alleviation by making them free from corruption.
(g) Free government officials from corruption and create a transparent and clean work culture.
4. Briefly discuss the three-dimensional measures adopted by the government for poverty alleviation.
Ans: Poverty in India has appeared like a severe social disease. To solve this problem, the government has adopted several measures. These measures are three-dimensional:
(a) First, the steps taken by the government for poverty alleviation are growth-oriented. Through these measures, it is expected that there will be rapid growth in Gross Domestic Product and per capita income, and the benefits will reach all sections of society.
(b) Second, from the Third Five-Year Plan onwards, India has adopted several schemes to remove poverty, such as the Food for Work Programme, Rural Employment Generation Programme, Prime Minister’s Rozgar Yojana, Self-employment schemes, etc.
(c) Third, the government aims to provide the minimum basic necessities of life to the people. These include social consumption needs such as supply of food grains at subsidized prices, opportunities for free education, access to health services, and supply of safe drinking water.
