Poverty is a state in which a person or community lacks the financial resources and essentials for a minimum standard of living. Economists categorize poverty into two types:

• Absolute Poverty: A condition where household income is below a necessary level to maintain basic living standards (food, shelter, housing). It is measured against a fixed poverty line.
• Relative Poverty: A condition where people lack the minimum amount of income needed in order to maintain the average standard of living in the society they live in. It is a measure of income inequality, usually represented via the Gini Coefficient and the Lorenz Curve.

Key Poverty Estimation Committees

Poverty estimation in India is officially conducted by the NITI Aayog (formerly Planning Commission) using data compiled by the National Statistical Office (NSO). Historically, several committees have defined the criteria:

Unemployment occurs when a person who is actively searching for employment is unable to find work. It is a critical indicator of economic health. The different forms of unemployment are mapped below:

Flowchart outlining structural, disguised, seasonal, cyclical, and frictional unemployment types.

Key Types of Unemployment

• Disguised Unemployment: A phenomenon where more people are employed than actually needed. The marginal productivity of extra labor is zero. It is highly prevalent in India's agricultural sector.
• Structural Unemployment: Arises from a mismatch between the jobs available in the market and the skills of the available workers. Often caused by technological advancements or systemic shifts in the economy.
• Seasonal Unemployment: Occurs when people are unemployed during certain seasons of the year when demand for labor is low (e.g., agricultural laborers between sowing and harvesting seasons, agro-processing factory workers).
• Frictional Unemployment: Also known as search unemployment, it is the time period between when a worker leaves one job and finds another. It is voluntary and temporary.
• Cyclical Unemployment: Results from business cycle fluctuations. It rises during recessions and falls during economic expansions. (Common in developed economies, less typical for India's structural issues).
• Technological Unemployment: Loss of jobs caused by technological changes (e.g., automation, introduction of AI).

Unemployment Measurement Metrics

The NSO uses three reference periods to estimate unemployment in its Periodic Labour Force Survey (PLFS):

1. Usual Status (US): Reference period is 365 days preceding the date of survey. Measures chronic/long-term unemployment.
2. Current Weekly Status (CWS): Reference period is 7 days preceding the date of survey. A person is considered employed if they worked for at least 1 hour on any day during the reference week.
3. Current Daily Status (CDS): Reference period is each day of the 7 days preceding the survey. Most granular indicator, capturing underemployment.

To alleviate poverty, build infrastructure, and generate employment, the Government of India operates several flagship schemes frequently tested in the SSC CGL exam:

• MGNREGA (Mahatma Gandhi National Rural Employment Guarantee Act, 2005): Guarantees at least 100 days of demand-driven wage employment in a financial year to every rural household whose adult members volunteer to do unskilled manual work. One-third of proposed jobs are reserved for women.
• Pradhan Mantri Jan Dhan Yojana (PMJDY - 2014): A financial inclusion campaign providing bank accounts, overdraft facilities (up to Rs. 10,000), and Rupay debit cards with built-in accident insurance.
• Pradhan Mantri MUDRA Yojana (PMMY - 2015): Provides collateral-free refinancing loans up to Rs. 10 lakh to micro-business units. Loans are categorized into three stages:
  • Shishu: Loans up to Rs. 50,000.
  • Kishor: Loans from Rs. 50,001 to Rs. 5 Lakh.
  • Tarun: Loans from Rs. 5,00,001 to Rs. 10 Lakh.
• Pradhan Mantri Kisan Samman Nidhi (PM-KISAN - 2019): Direct benefit transfer providing an income support of Rs. 6,000 per year in three equal installments of Rs. 2,000 directly into the bank accounts of all landholding farmer families.
• Atal Pension Yojana (APY - 2015): Pension scheme targeted at unorganized sector workers, offering guaranteed pension of Rs. 1,000 to Rs. 5,000 per month starting at age 60, based on contributions.