T4-NCERT-IX-Economics

Unemployment is said to exist when people who are willing to work at the going wages cannot find jobs. 

The workforce population includes people from 15 years to 59 years. 

In case of India we have unemployment in rural and urban areas. However, the nature of unemployment differs in rural and urban areas. In case of rural areas, there is seasonal and disguised unemployment. Urban areas have mostly educated unemployment. 

In case of disguised unemployment people appear to be employed. They have agricultural plot where they find work. This usually happens among family members engaged in agricultural activity. The work requires the service of five people but engages eight people. Three people are extra. These three people also work in the same plot as the others. The contribution made by the three extra people does not add to the contribution made by the five people. If three people are removed the productivity of the field will not decline. The field requires the service of five people and the three extra people are disguised unemployed. 

In fact, every fourth person in India is poor. This means, roughly 300 million (or 30 crore) people in India live in poverty. 

They show that poverty means hunger and lack of shelter. It also is a situation in which parents are not able to send their children to school or a situation where sick people cannot afford treatment. Poverty also means lack of clean water and sanitation facilities. It also means lack of a regular job at a minimum decent level. Above all it means living with a sense of helplessness. Poor people are in a situation in which they are ill-treated at almost every place, in farms, factories, government offices, hospitals, railway stations etc. Obviously, nobody would like to live in poverty. 

One of the biggest challenges of independent India has been to bring millions of its people out of abject poverty. Mahatama Gandhi always insisted that India would be truly independent only when the poorest of its people become free of human suffering. 

Poverty as seen by social scientists 

Since poverty has many facets, social scientists look at it through a variety of indicators. Usually the indicators used relate to the levels of income and consumption. But now poverty is looked through other social indicators like illiteracy level, lack of general resistance due to malnutrition, lack of access to healthcare, lack of job opportunities, lack of access to safe drinking water, sanitation etc. Analysis of poverty based on social exclusion and vulnerability is now becoming very common 

Vulnerability 

Vulnerability to poverty is a measure, which describes the greater probability of certain communities (say, members of a backward caste) or individuals (such as a widow or a physically handicapped person) of becoming, or remaining, poor in the coming years. Vulnerability is determined by the options available to different communities for finding an alternative living in terms of assets, education, health and job opportunities. Further, it is analysed on the basis of the greater risks these groups face at the time of natural disasters (earthquakes, tsunami), terrorism etc. Additional analysis is made of their social and economic ability to handle these risks. In fact, vulnerability describes the greater probability of being more adversely affected than other people when bad time comes for everybody, whether a flood or an earthquake or simply a fall in the availability of jobs! 

At the centre of the discussion on poverty is usually the concept of the “poverty line”. A common method used to measure poverty is based on the income or 

consumption levels. A person is considered poor if his or her income or consumption level falls below a given “minimum level” necessary to fulfill basic needs. What is necessary to satisfy basic needs is different at different times and in different countries. Therefore, poverty line may vary with time and place. Each country uses an imaginary line that is considered appropriate for its existing level of development and its accepted minimum social norms. For example, a person not having a car in the United States may be considered poor. In India, owning of a car is still considered a luxury. 

While determining the poverty line in India, a minimum level of food requirement, clothing, footwear, fuel and light, educational and medical requirement etc. are determined for subsistence. These physical quantities are multiplied by their prices in rupees. The present formula for food requirement while estimating the poverty line is based on the desired calorie requirement. 

The accepted average calorie requirement in India is 2400 calories per person per day in rural areas and 2100 calories per person per day in urban areas. 

Since people living in rural areas engage themselves in more physical work, calorie requirements in rural areas are considered to be higher than urban areas. 

On the basis of these calculations, for the year 2009-10, the poverty line for a person was fixed at Rs 673 per month for the rural areas and Rs 860 for the urban areas. 

higher amount for urban areas has been fixed because of high prices of many essential products in urban centres. 

The poverty line is estimated periodically (normally every five years) by conducting sample surveys. These surveys are carried out by the National Sample Survey Organisation (NSSO). However, for making comparisons between developing countries, many international organisations like the World Bank use a uniform standard for the poverty line: minimum availability of the equivalent of $1 per person per day. 

• Poverty Estimates
  It is clear from the Table 3.1 that there is substantial decline in poverty ratios in India from about 55 per cent in 1973 to 30 per cent in 2009-10.
  
• Vulnerable Groups
  The proportion of people below poverty line is also not same for all social groups and economic categories in India. Social groups which are most vulnerable to poverty are scheduled caste and scheduled tribe households.
  

Some recent studies have shown that except for the scheduled tribe households, all the other three groups (i.e. scheduled castes, rural agricultural labourers and the urban casual labour households) have seen a decline in poverty in the 1990s. 

• Inter-State Disparities
  Poverty in India also has another aspect or dimension. The proportion of poor people is not the same in every state
  

Recent estimates show that in 20 states and union territories, the poverty ratio is less than the national average. On the other hand, poverty is still a serious problem in Orissa, Bihar, Assam, Tripura and Uttar Pradesh. 

In comparison, there has been a significant decline in poverty in Kerala, Jammu and Kashmir, Andhra Pradesh, Tamil Nadu, Gujarat and West Bengal. States like Punjab and Haryana have traditionally succeeded in reducing poverty with the help of high agricultural growth rates. Kerala has focused more on human resource development. In West Bengal, land reform measures have helped in reducing poverty. In Andhra Pradesh and Tamil Nadu public distribution of food grains could have been responsible for the improvement. 

Global Poverty Scenario 

The proportion of people in developing countries living in extreme economic poverty— defined by the World Bank as living on less than $1.25 per day—has fallen from 43 per cent in 1990 to 22 per cent in 2008. 

Number of poors in China has come down from 85 per cent in 1981 to 14 per cent in 2008. 

In Sub-Saharan Africa, poverty in fact rose from 51 per cent in 1981 to 47 per cent in 2008 (see graph 3.3). In Latin America, the ratio of poverty remained the same. It has declined from 11% in 1981 to 6.4 per cent in 2008. Poverty has also resurfaced in some of the former socialist countries like Russia, where officially it was non-existent earlier. Table 3.2 shows the proportion of people living under poverty in different countries as defined by the international poverty line (means population below $1 a day). The Millennium Development Goals of the United Nations calls for reducing the proportion of people living on less than $1 a day to half the 1990 level by 2015. 

Causes of Poverty 

There were a number of causes for the widespread poverty in India. One historical reason is the low level of economic development under the British colonial administration. The policies of the colonial government ruined traditional handicrafts and discouraged development of industries like textiles. The low rate of growth persisted until the nineteen- eighties. This resulted in less job opportunities and low growth rate of incomes. This was accompanied by a high growth rate of population. The two combined to make the growth rate of per capita income very low. The failure at both the fronts: promotion of economic growth and population control perpetuated the cycle of poverty. 

With the spread of irrigation and the Green revolution, many job opportunities were created in the agriculture sector. But the effects were limited to some parts of India. The industries, both in the public and the private sector, did provide some jobs. But these were not enough to absorb all the job seekers. Unable to find proper jobs in cities, many people started working as rickshaw pullers, vendors, construction workers, domestic servants etc. With irregular small incomes, these people could not afford expensive housing. They started living in slums on the outskirts of the cities and the problems of poverty, largely a rural phenomenon also became the feature of the urban sector. 

Another feature of high poverty rates has been the huge income inequalities. One of the major reasons for this is the unequal distribution of land and other resources. Despite many policies, we have not been able to tackle the issue in a meaningful manner. Major policy initiatives like land reforms which aimed at redistribution of assets in rural areas have not been implemented properly and effectively by most of the state governments. Since lack of land resources has been one of the major causes of poverty in India, proper implementation of policy could have improved the life of millions of rural poor. 

Many other socio-cultural and economic factors also are responsible for poverty. In order to fulfil social obligations and observe religious ceremonies, people in India, including the very poor, spend a lot of money. Small farmers need money to buy agricultural inputs like seeds, fertilizer, pesticides etc. Since poor people hardly have any savings, they borrow. Unable to repay because of poverty, they become victims of indebtedness. So the high level of indebtedness is both the cause and effect of poverty. 

Anti-Poverty Measures 

Removal of poverty has been one of the major objectives of Indian developmental strategy. The current anti-poverty strategy of the government is based broadly on two planks (1) promotion of economic growth (2) targeted anti-poverty programmes. 

Since the eighties, India’s economic growth has been one of the fastest in the world. The growth rate jumped from the average of about 3.5 per cent a year in the 1970s to about 6 per cent during the 1980s and 1990s. The higher growth rates have helped significantly in the reduction of poverty. Therefore, it is becoming clear that there is a strong link between economic growth and poverty reduction. Economic growth widens opportunities and provides the resources needed to invest in human development. This also encourages people to send their children, including the girl child, to schools in the hope of getting better economic returns from investing in education. However, the poor may not be able to take direct advantage from the opportunities created by economic growth. Moreover, growth in the agriculture sector is much below expectations. This has a direct bearing on poverty as a large number of poor people live in villages and are dependent on agriculture. 

Although there are so many schemes which are formulated to affect poverty directly or indirectly, some of them are worth mentioning. National Rural Employment Guarantee Act (NREGA) 2005 was passed in September 2005. The Act provides 100 days assured employment every year to every rural household in 200 districts. Later, the scheme will be extended to 600 districts. One third of the proposed jobs would be reserved for women. The central government will also establish National Employment Guarantee Funds. Similarly state governments will establish State Employment Guarantee Funds for implementation of the scheme. Under the programme if an applicant is not provided employment within fifteen days s/he will be entitled to a daily unemployment allowance. Another important scheme has been the National Food for Work Programme (NFWP), which was launched in 2004 in 150 most backward districts of the country. The programme is open to all rural poor who are in need of wage employment and desire to do manual unskilled work. It is implemented as a 100 per cent centrally sponsored scheme and foodgrains are provided free of cost to the states. Once the NREGA is in force, the NFWP will be subsumed within this programme. 

Prime Minister Rozgar Yozana (PMRY) is another scheme which was started in 1993. 

The aim of the programme is to create self-employment opportunities for educated unemployed youth in rural areas and small towns. They are helped in setting up small business and industries. 

Rural Employment Generation Programme (REGP) was launched in 1995. The aim of the programme is to create self- employment opportunities in rural areas and small towns. A target for creating 25 lakh new jobs has been set for the programme under the Tenth Five Year plan. Swarnajayanti Gram Swarozgar Yojana (SGSY) was launched in 1999. The programme aims at bringing the assisted poor families above the poverty line by organising them into self help groups through a mix of bank credit and government subsidy. Under the Pradhan Mantri Gramodaya Yozana (PMGY) launched in 2000, additional central assistance is given to states for basic services such as primary health, primary education, rural shelter, rural drinking water and rural electrification. Another important scheme is Antyodaya Anna Yozana (AAY) about which you will be reading more in the next chapter. 

The results of these programmes have been mixed. One of the major reasons for less effectiveness is the lack of proper implementation and right targeting. 

Moreover, there has been a lot of overlapping of schemes. Despite good intentions, the benefits of these schemes are not fully reached to the deserving poor. Therefore, the major emphasis in recent years is on proper monitoring of all the poverty alleviation programmes. 

The Challenges Ahead 

Poverty has certainly declined in India. But despite the progress, poverty reduction remains India’s most compelling challenge.Certain social and economic groups are more vulnerable to poverty. 

 Poverty reduction is expected to make better progress in the next ten to fifteen years. This would be possible mainly due to higher economic growth, increasing stress on universal free elementary education, declining population growth, increasing empowerment of the women and the economically weaker sections of society. 

The official definition of poverty, however, captures only a limited part of what poverty really means to people. It is about a “minimum” subsistence level of living rather than a “reasonable” level of living. Many scholars advocate that we must broaden the concept into human poverty. 

have been able to feed themselves. But do they have education? Or shelter? Or health care? Or job security? Or self- confidence? Are they free from caste and gender discrimination? 

Is the practice of child labour still common? Worldwide experience shows that with development, the definition of what constitutes poverty also changes. Eradication of poverty is always a moving target. Hopefully we will be able to provide the minimum “necessary” in terms of only income to all people by the end of the next decade. But the target will move on for many of the bigger challenges that still remain: providing health care, education and job security for all, and achieving gender equality and dignity for the poor. These will be even bigger tasks. 

Chapter 4

Food Security in India 

Food security means availability, accessibility and affordability of food to all people at all times. 

Food security depends on the Public Distribution System (PDS) and government vigilance and action at times, when this security is threatened. 

What is food security? 

Food is as essential for living as air is for breathing. But food security means something more than getting two square meals. Food security has following 3 dimensions 

(a) availability of food means food production within the country, food imports and the previous years stock stored in government granaries. 

(b) accessibility means food is within reach of every person. 

(c) affordability implies that an individual has enough money to buy sufficient, safe and nutritious food to meet one's dietary needs. 

Thus, food security is ensured in a country only if (1) enough food is available for all the persons (2) all persons have the capacity to buy food of acceptable quality and (3) there is no barrier on access to food. 

In the 1970s, food security was understood as the “availability at all times of adequate supply of basic foodstuffs” (UN, 1975). 

The most devastating famine that occurred in India was the FAMINE OF BENGAL in 1943. This famine killed thirty lakh people in the province of Bengal. 

But it is disturbing to note that even today, there are places like Kalahandi and Kashipur in Orissa where famine-like conditions have been existing for many years and where some starvation deaths have also been reported. Starvation deaths are also reported in Baran district of Rajasthan, Palamau district of Jharkhand and many other remote areas during the recent years. Therefore, food security is needed in a country to ensure food at all times. 

Who are food-insecure? 

Although a large section of people suffer from food and nutrition insecurity in India, the worst affected groups are landless people with little or no land to depend upon, traditional artisans, providers of traditional services, petty self- employed workers and destitutes including beggars. In the urban areas, the food insecure families are those whose working members are generally employed in ill-paid occupations and casual labour market. 

The social composition along with the 

inability to buy food also plays a role in food insecurity. The SCs, STs and some sections of the OBCs (lower castes among them) who have either poor land-base or very low land productivity are prone to food insecurity. 

A high incidence of malnutrition prevails among women. This is a matter of serious concern as it puts even the unborn baby at the risk of malnutrition. 

According to the National Health and Family Survey (NHFS) 1998–99, the number of such women and children is approximately 11 crore 

Hunger has chronic and seasonal dimensions. Chronic hunger is a consequence of diets persistently inadequate in terms of quantity and/or quality. Poor people suffer from chronic hunger because of their very low income and in turn inability to buy food even for survival. Seasonal hunger is related to cycles of food growing and harvesting. This is prevalent in rural areas because of the seasonal nature of agricultural activities and in urban areas because of the casual labour, e.g., there is less work for casual construction labour during the rainy season. This type of hunger exists when a person is unable to get work for the entire year. 

India is aiming at Self-sufficiency in Foodgrains since Independence. 

After independence, Indian policy makers adopted all measures to achieve self-sufficiency in food grains. India adopted a new strategy in agriculture, which resulted in the ‘Green Revolution’ especially in the production of wheat and rice. 

The success of wheat was later replicated in rice. The increase in foodgrains was, however, disproportionate. The highest rate of growth was achieved in Punjab and Haryana, where foodgrain production jumped from 7.23 million tonnes in 1964–65 to reach an all-time high of 218 million tonnes in 2009–10. Production in Maharashtra, Madhya Pradesh, Bihar, Orissa and the northeastern states continued to stagger. Tamil Nadu and Andhra Pradesh, on the other hand, recorded significant increases in rice yield. 

Food Security in India 

Since the advent of the Green revolution in the early-’70s, the country has avoided famine even during adverse weather conditions. 

India has become self-sufficient in foodgrains during the last thirty years because of a variety of crops grown all over the country. 

The availability of foodgrains (even in adverse weather conditions or otherwise) at the country level has further been ensured with a carefully designed food security system by the government. This system has two components: (a) buffer stock and (b) public distribution system. 

What is Buffer stock? 

Buffer Stock is the stock of foodgrains, namely wheat and rice procured by the government through Food Corporation of India (FCI). The FCI purchases wheat and rice from the farmers in states where there is surplus production. The farmers are paid a pre-announced price for their crops. This price is called Minimum Support Price. The MSP is declared by the government every year before the sowing season to provide incentives to the farmers for raising the production of these crops. The purchased foodgrains are stored in granaries. Do you know why this buffer stock is created by the government? This is done to distribute foodgrains in the deficit areas and among the poorer strata of society at a price lower than the market price also known as Issue Price. This also helps resolve the problem of shortage of food during adverse weather conditions or during the periods of calamity. 

What is the Public Distribution System? 

The food procured by the FCI is distributed through government regulated ration shops among the poorer section of the society. This is called the public distribution system (PDS). Ration shops are now present in most localities, villages, towns and cities. There are about 5.5 lakh ration shops all over the country. Ration shops also known as Fair Price Shops keep stock of foodgrains, sugar, kerosene oil for cooking. These items are sold to people at a price lower than the market price. Any family with a ration card* can buy a stipulated amount of these items (e.g. 35 kg of grains, 5 litres of kerosene, 5 kgs of sugar etc.) every month from the nearby ration shop. 

*There are three kinds of ration cards: 

(a) Antyodaya cards for the poorest of the poor;

 (b) BPL cards for those below poverty line; and

 (c) APL cards for all others 

The introduction of Rationing in India dates back to the 1940s against the backdrop of the Bengal famine. The rationing system was revived in the wake of an acute food shortage during the 1960s, prior to the Green Revolution. In the wake of the high incidence of poverty levels, as reported by the NSSO in the mid-1970s, three important food intervention programmes were introduced: Public Distribution System (PDS) for food grains (in existence earlier but strengthened thereafter); Integrated Child Development Services (ICDS) (introduced in 1975 on an experimental basis) and Food-for -Work** (FFW) (introduced in 1977–78). Over the years, several new programmes have been launched and some have been restructured with the growing experience of administering the programmes. At present, there are several Poverty Alleviation Programmes (PAPs), mostly in rural areas, which have an explicit food component also. While some of the programmes such as PDS, mid-day meals etc. are exclusively food security programmes, most of the PAPs also enhance food security. Employment programmes greatly contribute to food security by increasing the income of the poor. 

Current Status of Public Distribution System 

Public Distribution System (PDS) is the most important step taken by the Government of India (GoI) towards ensuring food security. In the beginning the coverage of PDS was universal with no discrimination between the poor and non-poor. Over the years, the policy related to PDS has been revised to make it more efficient and targeted. In 1992, Revamped Public Distribution System (RPDS) was introducted in 1,700 blocks in the country. The target was to provide the benefits of PDS to remote and backward areas. From June 1997, in a renewed attempt, Targeted Public Distribution System (TPDS) was introducted to adopt the principle of targeting the ‘poor in all areas’. It was for the first time that a differential price policy was adopted for poor and non-poor. Further, in 2000, two special schemes were launched viz., Antyodaya Anna Yojana*** (AAY) and the Annapurna Scheme (APS) with special target groups of ‘poorest of the poor’ and ‘indigent senior citizens’, respectively. The functioning of these two schemes was linked with the existing network of the PDS. 

2 crore families have been covered under the AAY. 

The PDS has proved to be the most effective instrument of government policy over the years in stabilising prices and making food available to consumers at affordable prices. It has been instrumental in averting widespread hunger and famine by supplying food from surplus regions of the country to the deficit ones. In addition, the prices have been under revision in favour of poor households in general. The system, including the minimum support price and procurement has contributed to an increase in food grain production and provided income security to farmers in certain regions. 

However, the Public Distribution System has faced severe criticism on several grounds. Instances of hunger are prevalent despite overflowing granaries. FCI go-downs are overflowing with grains, 

with some rotting away and some being eaten by rats. 

The estimated production of major crops during 2015-16 is as follows:

Food grains 

• Rice  – 103.61 million tonnes
• Wheat – 93.82 million tonnes
• Coarse Cereals  – 38.40 million tonnes
• Maize  – 21.00 million tonnes
• Pulses  – 17.33 million tonnes
• Tur  – 2.55 million tonnes
• Gram  –  8.09 million tonnes

Oilseeds 

• Soya bean  – 9.13 million tonnes
• Groundnut  – 7.18 million tonnes
• Rapeseed & Mustard – 6.84 million tonnes

Cotton  – 30.69 million bales (of 170 kg each)

Sugarcane – 346.39 million tonnes

In July 2012, the stock of wheat and rice with FCI was 82 million tonnes which was much more than the minimum buffer norms of 33 million tonnes.

There is a general consensus that high level of buffer stocks of food grains is very undesirable and can be wasteful. The storage of massive food stocks has been responsible for high carrying costs, in addition to wastage and deterioration in grain quality. Freezing of MSP for a few years should be considered seriously.

The increased food grains procurement at enhanced MSP# is the result of the pressure exerted by leading food grain producing states, such as Punjab, Haryana and Andhra Pradesh.

FCI at present has a wheat stock of 30.2 MT against the norm of 27.5 MT for July 1 2016

FCI at present has a rice stock of 20.0 MT against the norm of 13.5 MT for July 1.

According to latest data, the food grain stock consisting of rice and wheat with FCI and state government-owned agencies at the start of this month was close to 50 million tonne against the buffer norm of 41.1 MT. 

A high-level committee (HLC) for FCI restructuring chaired by former food minister Shanta Kumar in its report submitted earlier this year had observed that “during the last five years, on an average, buffer stocks with FCI have been more than double the buffer stocking norms, costing the nation thousands of crores of rupees loss without any worthwhile purpose being served”.

Increase in MSP has induced farmers, particularly in surplus states, to divert land from production of coarse grains, which is the staple food of the poor, to the production of rice and wheat. The intensive utilisation of water in the cultivation of rice has also led to environmental degradation and fall in the water level, threatening the sustainability of the agricultural development in these states. 

Area of concern

1-Major area of concern is the marked ineffectiveness of PDS, which is apparent from the fact that the average consumption of PDS grain at the all-India level is only 1 kg per person per month. 

As a result the poor have to depend on markets rather than the ration shops for their food needs. 

2-PDS dealers are sometimes found resorting to malpractices like diverting the grains to open market to get better margin, selling poor quality grains at ration shops, irregular opening of the shops, etc. 

3-The rising Minimum Support Prices (MSP) have raised the maintenance cost of procuring foodgrains by the government. 

4-With TPDS of three different prices, any family above the poverty line gets very little discount at the ration shop. The price for APL family is almost as high as open market price, so there is little incentive for them to buy these items from the ration shop. 

Role of cooperatives in food security 

The cooperatives are also playing an important role in food security in India especially in the southern and western parts of the country. The cooperative societies set up shops to sell low priced goods to poor people. For example, out of all fair price shops running in Tamil Nadu, around 94 per cent are being run by the cooperatives. Ex: In Delhi, Mother Dairy ,Amul is another success story of cooperatives in milk and milk products from Gujarat. 

Similarly, in Maharashtra, Academy of Development Science (ADS) has facilitated a network of NGOs for setting up grain banks in different regions. ADS organises training and capacity building programmes on food security for NGOs. The ADS Grain Bank programme is acknowledged as a successful and innovative food security intervention.