POVERTY ALLEVIATION & EMPLOYMENT

GENERATION
DESCRIPTIVE ANSWER WRITING

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In this document, we have put 5 questions.

• For first 2 questions both the structure and answer has been provided. To understand more about
structure and answer and how do they relate to each other, you need to watch the videos for
Descriptive Answer Writing for Motivation.
• For next 2 questions, we have provided you with structure using which you can easily frame the
answers. We are not providing you the answers because there are no perfect answers as such. It is
structure which is most important. In the structure, the content part is not just a mere outline, but it
has been put in detail to make it easy for you.
• The last question is a practice exercise for you for which we shall not be providing any structure. Its
for you to work upon. You must develop the ability to make a structure and mere reading the
structures/answers will not help.

Q.1) Discuss the impact of growth on poverty alleviation in the context of

empirical evidence on the Indian economy.

Answer Structure
Introduction Bring out the inter-linkage between growth and poverty alleviation. Mention
that growth has always been a decisive factor in bringing about a reduction
in poverty. But the kind of impact that growth has on poverty has been
changing.
Body Delineate the impact that growth has been having on poverty in India.
Elaborate upon the following points:
• Rural-urban distribution of poverty. Urbanisation of Poverty
• Increase in poverty reduction post-1991.
• Importance of urban growth for poverty reduction.
• Contribution of growth in various sectors in poverty reduction
• Strong inter-sectoral linkages – growth in one sector has impact on
overall poverty reduction
Conclusion Conclude by reiterating that accelerated, sustainable and inclusive growth is
sine qua non for poverty reduction in India.

• First, India’s long-run progress against absolute poverty is evident when using data spanning nearly
six decades from 1957 to 2012. Rural poverty measures—historically higher than for urban areas—
have been converging with urban measures over time. There has been a marked urbanization of
poverty, from about one-in-eight of the poor living in urban areas in the early 1950s to one-in-three
today.
• Second, even though a trend decline in poverty started to emerge around the mid-1970s, the pace of
poverty reduction accelerated post-1991, with a 5-6 fold increase in the proportionate rate of
decline in the incidence of poverty relative to the preceding 35 years. The acceleration in rural
poverty decline was even higher than that for urban poverty.

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• In the post-reform period, urban growth emerged as a major driver of national poverty reduction.
Moreover, urban growth has become significantly more rural poverty reducing. This is in sharp
contrast to the prior pattern, when urban growth had little or no impact on rural poverty. In parallel,
there was a change in the poverty-reducing effects of growth of output in different sectors of the
economy. Unlike the pre-91 period, when only primary and tertiary sector growth contributed to
poverty reduction, after 1991 all three sectors have had a significant impact.
• The contribution of primary sector growth has rapidly dwindled from accounting for about two-fifths
of the total poverty decline pre-91 to less than 10 percent of the total (and larger) poverty decline
post-91. The tertiary sector alone has contributed over 60% of the post-91 poverty reduction. The
secondary sector growth, aided by India’s construction boom since 2000, has contributed about a
quarter.
• In relation to the growth process, both urban-rural and sectoral (output) growth-poverty
relationships are suggestive of stronger inter-sectoral linkages in the economy, whereby growth in
one sector transmits its gains elsewhere. At the same time, structural transformation with the
secondary and tertiary sectors now accounting for much larger shares of national output and
employment, has amplified the significance of growth in the non-agricultural and urban economy
for poverty reduction.
• This does not imply that agricultural growth is no longer important for poverty reduction. Faster
growth in agricultural productivity can substantially hasten the process.

Q.2) Suggest suitable policy for employment generation in India.

Answer Structure
Introduction Start by mentioning the dire need in India to create more jobs for the young
population. Being able to present relevant statistics to make more impact is
always helpful.
Body Suggested Policy Action:
1. Increase aggregate demand
2. Government Expenditure of Infrastructure and Public Works Projects
3. Developing institutes and better training programs
4. Support to small and medium scale enterprises (Cite the example of
Prime Minister’s Employment Generation Programme (PMEGP))
5. Providing Unemployment Benefits (Cite the example of Atal Bimit
Vyakti Kalyan Yojana)
Note: Being able to cite examples of relevant schemes will help make a
greater impact upon the examiner.
Conclusion Conclude by highlighting that any single policy action does not have the
capacity to be a magic bullet. We need to undertake concerted policy action
to be able to deliver employment generation in India.

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How can an ailing job market be cured and what can be done to create more jobs and promote decent work.
There are few policy actions that can be taken by the government to reduce unemployment.

1. Increase aggregate demand: Increase in aggregate demand means increase in output to meet the
demand. This means organizations need to hire more workers to increase production. This can be done
through an expansionary monetary policy or an expansionary fiscal policy.

2. Government Expenditure of Infrastructure and Public Works Projects: Most developing countries do
not have adequate infrastructure. So one of the best ways to create jobs is public expenditure on
infrastructure such as roads, buildings, hospitals schools etc. This not only creates demand for skilled
workers like engineers and managers who design such structures but also unskilled workers like masons
and plumbers.

3. Developing institutes and better training programs: Another step towards combatting unemployment
is to develop institutes, which gives training to workers. There is mass level unemployment due to a
mismatch between the demand for skill and supply. To bridge the gap a government needs to build
institutions which give professional training so that can get a better opportunities in the market. Building
such institutes itself gives employment opportunities to people who have the ability to give the training
like teachers for example.

4. Support to small and medium scale enterprises: Large organizations have easier access to capital and
economies of scale in operation. However, banks reluctance to fund the small-scale operations that have
little or no cash and uncertain prospects and a relatively small number of customers. The central
government should shoulder some of the risk of small business loans and provide new incentives for
banks to lend to smaller businesses. Government should support the struggling business enterprises as
they have the potential to create many job opportunities.

(Cite the example of Prime Minister’s Employment Generation Programme (PMEGP))

5. Providing Unemployment Benefits: Unemployment benefits should be provided to those who register
them as unemployed with an undertaking that they will actively look for work. This is a form of social security
for the unemployed. It prevents them from falling into acute poverty. Increase in unemployment also means
fall in the purchasing power of these people. By government ensuring social security to these people
government can prevent fall in aggregate demand and ensure the unemployed do not resort to crime and
other means of income.

(Cite the example of Atal Bimit Vyakti Kalyan Yojana)

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Q.3) Write a note on: Poverty: a multi-dimensional problem

Answer Structure
Introduction Start by mentioning that poverty is often projected as a uni-dimensional
problem of low income, but in reality is a multidimensional problem.
Body Elaborate upon the multi-dimensional nature of poverty and highlight that a
range of indicators should be used to capture the true poverty picture.

Mention briefly about the Multi-dimensional Poverty Index and its relevance
in this context.

Why use a multidimensional approach?

• Monetary-based poverty measures can miss a lot
• Economic growth does not always reduce poverty or deprivation
• Poor people describe their experience of poverty as multidimensional
• The more policy-relevant information there is available on poverty,
the better-equipped policymakers will be to reduce it
Conclusion Conclude by stressing that since poverty is a multi-dimensional problem, the
solution also needs to be multi-dimensional and try to highlight the range of
measures taken to eradicate it.

Q.4) “Increasing unemployment in India reveals that we are not able to put our
demographic dividend to good use”. Discuss.

Answer Structure
Introduction Introduction should capture twin aspects of this question:
• India’s window of opportunity to enjoy its demographic dividend
versus
• Present reality of demographic resource lying idle due to increasing
unemployment.
Body Outline the causes of unemployment:
1. Slow growth of GDP
2. Rapid changes in technology
3. Lack of capital
4. Over Population
5. Low Level of Education
6. Poverty
7. Poor performance of Agriculture sector
8. Jobless Economic Growth
9. Joint Family System
10. Rush for government jobs

Measures to Reduce Unemployment

1. Increase aggregate demand
2. Government Expenditure of Infrastructure and Public Works Projects
3. Developing institutes and better training programs

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 4. Support to small and medium scale enterprises (cite the example of
Prime Minister’s Employment Generation Programme)
5. Providing Unemployment Benefits (Cite the example of Atal Bimit
Vyakti Kalyan Yojana)
Conclusion Stress the negative consequences of unemployment: Increase in Poverty,
Increase in Inequality, Low level of living Standard, Less Access to healthcare,
Social Cost, Loss of national output, Fiscal costs.

For avoiding the above consequences, we need to deploy our demographic

resource effectively and efficiently.

Q.5) India's concern with poverty alleviation has mostly remained at the
rhetorical level. Explain.

You are expected to frame a structure and answer this question on your own.

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