NCERT Notes for Class 12 Economics Chapter 4 POVERTY

Class 12 Economics Chapter 4 POVERTY

NCERT Notes for Class 12 Economics Chapter 4 POVERTY, (Economics) exam are Students are taught thru NCERT books in some of the state board and CBSE Schools. As the chapter involves an end, there is an exercise provided to assist students to prepare for evaluation. Students need to clear up those exercises very well because the questions inside the very last asked from those.

Sometimes, students get stuck inside the exercises and are not able to clear up all of the questions.  To assist students, solve all of the questions, and maintain their studies without a doubt, we have provided step-by-step NCERT Notes for the students for all classes.  These answers will similarly help students in scoring better marks with the assist of properly illustrated Notes as a way to similarly assist the students and answer the questions right

NCERT Notes for Class 12 Economics Chapter 4 POVERTY

Class 12 Economics Chapter 4 POVERTY



  • Poor people are those who lack basic needs of life. Starvation and hunger are the key features of the poorest households.
  • The poor lack basic literacy and skills and hence have very limited economic opportunities.
  • Poor people also face unstable employment. Malnutrition is alarmingly high among the poor.
  • Ill health, disability or serious illness makes them physically weak. They borrow from moneylenders, who charge high rates of interest that lead them into chronic indebtedness.
  • The pattern of development in the five-year plans envisaged the upliftment of the poorest of the poor (Antyodaya)
  • Economists identify the poor on the basis of their occupation
  • ownership of assets


  • In pre-independent India, Dadabhai Naoroji was the first to discuss the concept of a Poverty Line using ‘jail cost of living’.
  • In post-independent India, there have been several attempts to work out a mechanism to identify the number of poor in the country.
  • For the purpose of defining poverty, divide people into two categories; the poor and the non-poor and the poverty line separates the two.
  • Categorising Poverty: There are many ways to categorize povertyalways poor and usually poor, grouped together as the chronic poor (eg. casual workers).
  • Churning poor who regularly move in and out of poverty. (Small farmers and seasonal workers) and the occasionally poor, who are rich most of the time but may sometimes have a patch of bad luck, they together called transient poor.
  • Always poor and usually poor together called chronic poor.
  • churning poor and occasionally poor together called transient poor

The Poverty Line:

  • Poverty line is an imaginary line below which a certain section of the people unable to meet the basic needs of life.
  • The official data on poverty is made available to the public by the Planning Commission. It is estimated on the basis of consumption expenditure data collected by the National Sample Survey Organization (NSSO).
  • There are many ways of measuring poverty. One way is to determine it by the monetary value (per capita expenditure) of the minimum calorie intake.
  • It was estimated that at 2,400 calories for a rural person and 2,100 for a person in the urban area.
  • The government uses Monthly Per Capita Expenditure (MPCE) as proxy for income of households to identify the poor.
  • Economists state that a major problem with MPCE mechanism is that it groups all the poor together and does not differentiate between the very poor and the other poor.
  • The existing mechanism for determining the Poverty Line does not take into consideration of social factors such as illiteracy, ill health, lack of access to resources, discrimination etc.


  • The causes of poverty lie in the institutional and social factors in the life of the poor.
  • The main victims of caste, religious and other discriminatory practices are poor.
  • Poverty can be caused as a result of
  1. social, economic and political inequality
  2. social exclusion
  3. unemployment
  4. indebtedness
  5. unequal distribution of income and wealth.
  • Economical-wide problem consists of
  1. low capital formation
  2. lack of infrastructure
  3. lack of demand
  4. pressure of population
  5. lack of social/ welfare nets.
  • Poverty is also closely related to nature of employment. Unemployment or under employment and the casual and nature of work in both rural and urban areas that compels indebtedness.
  • Indebtedness is one of the significant factors of poverty.
  • Poverty is a multi-dimensional challenge for India that needs to be addressed on a war footing.


  • The Indian Constitution and five year plans state social justice as the primary objective of the developmental strategies of the government.
  • The government’s approach to poverty reduction was of three dimensions.
  1. Growth oriented approach-It is based on the expectation that the effects of economic growth leads to rapid increase in gross domestic product and per capita income would spread to poor sections of society.(Trickle down)
  2. Expanding self-employment and wage employment programmes are being considered as the major ways of addressing poverty.
  3. To provide minimum basic amenities to the people.

Expanding self-employment and wage employment programmes

  • Examples of self-employment programmes are Rural Employment Generation Programme (REGP), Prime Minister’s Rozgar Yojana (PMRY) and Swarna Jayanti Shahari RozgarYojana (SJSRY)
  • SJSRY mainly aims at creating employment opportunities both selfemployment and wage employment in urban areas.
  • Swarnajayanti Gram Swarozgar Yojana (SGSY) has now been restructured as National Rural Livelihoods Mission (NRLM).
  • Food for Work programme.
  • The government has a variety of programmes to generate wage employment for the poor unskilled people living in rural areas.
  • In August 2005, the Parliament passed a new Act to provide guaranteed wage employment to every rural household. It is known as Mahatma Gandhi National Rural Employment Guarantee Act

To provide minimum basic amenities to the people.

  • Programmes under this approach are expected to supplement the consumption of the poor, create employment opportunities, and bring about improvements in health and education.
  • Three major programmes aim at improving the food and nutritional status of the poor are Public Distribution System, Integrated Child Development Scheme and Midday Meal Scheme.
  • Pradhan Mantri Gram Sadak Yojana, Pradhan Mantri Gramodaya Yojana, Valmiki Ambedkar Awas Yojana are started in developing infrastructure and housing conditions.
  • The government also has a variety of other social security programmes to help a certain specific group. eg: National Social Assistance Programme .
  • The government has also introduced a few schemes to provide health insurance to poor Pradhan Mantri Jan-Dhan Yojana (2014)


  • Government introduced various strategies to alleviate poverty but hunger, malnourishment, illiteracy, and lack of basic amenities continue to be a common feature in many parts of India.
  • Due to unequal distribution of land and other assets, the benefits from direct poverty alleviation programmes have been appropriated by the non-poor.
  • High magnitude of poverty, the number of resources allocated for poverty alleviation programmes were not sufficient.
  • Some officials are ill motivated, inadequately trained, corruption prone etc resulted inadequate implementation of the programme.
  • It is very necessary to identify poverty-stricken areas and provide infrastructure such as schools, roads, power, telecom, IT services, training institutions etc. to this area.

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