Q.What is poverty? How is relative poverty different from absolute poverty? (1+3=4)
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Poverty dynamics refers to how poverty rises or falls over time and why it can re-emerge even after a period of progress. Explaining the slow growth and re-emergence of poverty in Pakistan means identifying the structural weaknesses that made its earlier gains fragile and reversible.
Several reasons stand out. First, Pakistan's growth was built on unstable foundations: much of it depended on foreign aid, remittances from workers abroad, and good harvests, none of which is a durable engine of development — when aid or remittances fell or harvests failed, growth stalled and poverty returned. Second, agriculture, a large part of the economy, relied on volatile crop output and irregular rains, so rural incomes swung sharply. Third, political instability and frequent changes in policy direction — swinging between nationalisation and denationalisation — deterred steady investment and created uncertainty. Fourth, the Green Revolution's gains were unevenly distributed, concentrating land and income in the hands of a few. Fifth, low and inadequate investment in education, health and human capital left much of the population unable to move into productive, well-paid work. Sixth, a growing debt burden and heavy defence spendi …
Poverty is the inability to afford a basic minimum standard of living; absolute poverty uses a fixed benchmark, relative poverty compares across income groups.
What is poverty? (1 mark): Poverty refers to a state in which an individual or household is unable to fulfil even the basic minimum needs necessary for survival and a decent standard of living — sufficient food/calorie intake, clothing, shelter, and access to basic services like health and education.
Relative poverty vs Absolute poverty (3 marks):
| Basis | Absolute poverty | Relative poverty |
|---|---|---|
| Measurement | Measured against a FIXED minimum level of income/consumption (the "poverty line"), irrespective of how others in society are living | Measured in terms of the DISTRIBUTION of income/consumption across different sections of society (e.g., comparing the income share of the poorest 20% with the richest 20%) |
| What it shows | The number or percentage of people who fall below the minimum subsistence standard | The degree of INEQUALITY between different income groups in society |
- CBSE 2025Set MARCH1 markMCQQ.In India, the current poverty estimate is based on the methodology recommended by(a) Alag Committee(b) Lakdawala Committee(c) V.M. Dandekar and N. Rath Committee(d) Tendulkar Expert Group
›Reveal solutionSolution
Current poverty estimates are based on the Tendulkar Expert Group methodology — option (d).
A frequently asked one-mark question in Kerala Plus One (DHSE) Economics. Several committees have refined how India measures poverty: the Dandekar–Rath study and the Alagh (1979) and Lakdawala (1993) committees defined the poverty line largely on calorie-based nutritional norms. The Tendulkar Expert Group (2009) revised this to include spending on food, education, health, tran …
- CBSE 2023Set 58/3/11 markMCQQ."Multiple reasons for economic slowdown and re-emergence of poverty in Pakistan may be enumerated." Identify which of the following might not be one of them.(i) Rising dependence on foreign loans(ii) Stable macroeconomic indicators(iii) Unstable agricultural growth Alternatives :(a) (i),(ii) and(iii)(b)(ii) and(iii)(c)(i) and(iii)(d) Only (ii)
›Reveal solutionSolution
Economic slowdowns and poverty re-emergence stem from problems in the economy; stable macroeconomic indicators signal health, not distress, so (ii) is not a reason for slowdown. Answer: (d) Only (ii).
When we ask what causes an economic slowdown and rising poverty, we're looking for factors that harm growth, destabilize the economy, or drain resources. Each candidate needs to be tested against this logic.
Start with (i) Rising dependence on foreign loans. Heavy borrowing from abroad creates multiple pressures: debt-servicing obligations divert government revenue away from development spending, currency depreciation risk grows as external liabilities mount, and policy autonomy shrinks when lenders impose conditionalities. Pakistan's experience through the 1990s and 2000s showed exactly this pattern—high debt burdens crowded out investment in infrastructure and social sectors, directly contributing to slower growth and persistent poverty. This is clearly a reason for slowdown.
Now consider (iii) Unstable agricultural growth. In an economy where a large share of the population depends on agriculture for livelihood (as in Pakistan, where agriculture employs roughly 40–45% of the workforce), erratic farm output translates into volatile incomes, food insecurity, and fluctuating demand for industrial goods. Poor monsoons, inadequate irrigation, or policy neglect can cause sharp year-to-year swings. When agriculture stumbles, rural purchasing power collapses, dragging down the entire economy and pushing marginal households back into poverty. This too is a genuine cause of slowdown. …
- CBSE 2023Set MARCH1 markMCQQ.Who used 'Jail Cost of Living' to discuss poverty line is Pre-independent India ?(a) V.K.R.V. Rao(b) Jawaharlal Nehru(c) Dadabhai Naoroji(d) R.C. Desai
›Reveal solutionSolution
The correct option is (c) Dadabhai Naoroji, who pioneered the idea of a poverty line in pre-independent India by taking the 'jail cost of living' as a minimum subsistence benchmark.
Measuring poverty needs a poverty line — a cut-off level of consumption/income below which a person is poor. In colonial India, Dadabhai Naoroji made one of the earliest such estimates using the subsistence cost of feeding a prisoner (the 'jail cost of living') as the yardstick for the minimum a person needs.
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- CBSE 2022Set MARCH1 markMCQQ.Who used "Jail cost of living" to calculate poverty ?(a) William Digby(b) Manmohan Singh(c) Dadabhai Naoroji(d) Amartya Sen
›Reveal solutionSolution
Dadabhai Naoroji used the 'jail cost of living' to work out an early poverty line.
The idea of a poverty line began with early estimates of the minimum subsistence needed to survive. Dadabhai Naoroji, one of India's first nationalist economists (famous for his 'drain of wealth' theory), used the 'jail cost of living' — the cost of the minimum diet prescribed for prisoners — as a reference for estimating the subsistence level of the population. This is studied in the Kerala Plus One (DHSE) economics treatment of poverty.
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- CBSE 2022Set ANNUAL1 markMCQQ.The term used to divide people as poor and non-poor is called(a) proverty index(b) poverty ratio(c) poverty line(d) All of the above
›Reveal solutionSolution
The poverty line is the benchmark that separates the poor from the non-poor based on a minimum acceptable standard of living.
The poverty line is a monetary threshold representing the minimum consumption expenditure (covering a prescribed calorie intake, and basic non-food needs like clothing, footwear, fuel, education, and healthcare) considered necessary to satisfy the basic minimum needs of a person. Anyone with consumption/income below this line is classified as poor; anyone above it is classified as non-poor. It is estimated periodically using data from large consumer expenditure surveys (e.g., by bodies such as …
- CBSE 2021Set ANNUAL1 markMCQQ.The minimum calorie intake in rural areas in defining poverty line is(a) 2600 calories(b) 2400 calories(c) 2100 calories(d) 2000 calories
›Reveal solutionSolution
India's rural poverty line is set at a minimum calorie norm of 2,400 calories per person per day (2,100 for urban areas).
India has historically defined its poverty line using a minimum calorie-intake-based method, converted into a monetary expenditure level that would allow a person to afford that minimum nutritional requirement, along with some non-food essentials. Because rural residents, on average, perform more physically demanding work and have historically had this slightly higher calorie norm applied to them, the poverty line calorie norm for rural India is set higher, at 2,400 calories per person per day, compared to 2,100 calories per person per day for urban India (whe …
- CBSE 2021Set ANNUAL1 markMCQQ._____ poverty refers to poverty in relation to different classes, regions or countries.(a) Absolute(b) Relative
›Reveal solutionSolution
Relative poverty refers to poverty measured by comparison — between income classes, regions, or countries — rather than against a fixed minimum subsistence standard, which is what absolute poverty measures.
Poverty is conventionally studied in two senses:
- Absolute poverty — the number of people living below a defined "poverty line," a fixed minimum level of income or consumption (calorie-based, in India's case) needed for basic subsistence, irrespective of how others are faring.
- Relative poverty — poverty seen through comparison of living standards across different classes, regions, or countries — e.g., the poorest 20% of a population compared with the richest 20%, or one state's poverty compared with another's, or one country's poverty compared with another's. …
- CBSE 2020Set ANNUAL1 markMCQQ.The data on poverty is made available to the public by(a) Planning Commission(b) National Commission(c) State Commission(d) District Commission
›Reveal solutionSolution
The expected option is (a) Planning Commission.
Historically (and as per this syllabus), the Planning Commission was the official body responsible for estimating and publishing poverty figures for India, based on data on household consumption expenditure collected by the National Sample Survey Office (NSSO), using poverty-line methodologies (e.g. the Lakdawala and later the Tendulkar methodology).
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- CBSE 2020Set ANNUAL1 markQ.Define poverty line.
›Reveal solutionSolution
Poverty line = the minimum consumption/income benchmark for classifying a person as poor.
The poverty line is a benchmark figure of per capita income or consumption expenditure that is considered the minimum necessary to fulfil basic needs — traditionally, a minimum level of calorie intake (e.g. 2,400 kcal/day in rural areas and 2,100 kcal/day in urban areas in India's older methodology), along with a provision for some essential non-food expenditure (clothing, shelter, etc.). Anyone whose income/consumption expenditure falls below …
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