Lesson 2. Poverty, Inequality, and Unemployment

This is the central theme of “social development” and is perennially significant. It requires a deep understanding of the definitions, measurements, and trends of poverty (absolute vs. relative), inequality (income and wealth), and unemployment (types: structural, cyclical, disguised). Key here is the knowledge of important committees and their recommendations, such as the Tendulkar Committee, Rangarajan Committee, and the recent Lakdawala Formula, and the shift towards a multi-dimensional understanding of poverty. For unemployment, familiarity with reports like the Periodic Labour Force Survey (PLFS)—its findings on Worker Population Ratio, Labour Force Participation Rate, and Unemployment Rate—is essential. The topic also covers government schemes aimed at addressing these issues, most notably the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), its features, outcomes, and criticisms. Understanding the linkages between economic growth, poverty alleviation, and job creation (the issue of “jobless growth”) is a recurrent question. Concepts like the Gini coefficient, Lorenz curve, and the Palma ratio for inequality, and the multidimensional poverty index (MPI) developed by UNDP and used by NITI Aayog, are frequently tested. Additional Resources: The NITI Aayog’s National Multidimensional Poverty Index reports, the UNDP’s Human Development Reports, and the ILO’s India Wage Reports provide critical context. The PLFS annual reports and the World Inequality Lab’s “World Inequality Report” offer the latest data and sophisticated analysis on distributional aspects of the economy.