Poverty and Unemployment in India


The UN Human Rights Council has defined poverty as “A human condition characterized by the sustained or chronic deprivation of the resources, capabilities, choices, security and power necessary for the enjoyment of an adequate standard of living and other civil, cultural, economic, political and social rights”.
Poverty manifests itself in the form of both absolute poverty as well as relative poverty.

Absolute Poverty:

  • 1. This concept is based on absolute needs of the people and people are defined as poor when some absolute needs are not sufficiently satisfied.
  • 2. It is also defined in terms of insufficiency of basic needs.
  • 3. In India, these basic needs are measured in terms of calorie intake of 2400 in rural areas per person per day and 2100 in urban areas.
  • 4. The corresponding monetary yardstick for calorie intake is based on per capita monthly household expenditure.

Relative Poverty:

  • 1. This concept is related to the general standard of living in a society.
  • 2. Thus, according to this concept health coach recovery program, people are poor because they are deprived of the opportunities, comforts and self-respect regarded as normal in the community to which they belong.
  • 3. In relative poverty, poor are defined as, a person or family whose incomes are less than the average income of the community.
  • 4. Thus relative poverty relates to inequalities in a society. India is characterised by both in extreme measures, i.e., absolute and relative poverty.


The extent of poverty in an economy is due to a wide range of factors as follows:

  • (i) Underdeveloped nature of economy.
  • (ii) Rapid growth of population in an overpopulated country; even if the national income increases, the per capita income remains the same due to increase in population.
  • (iii) Large inequalities in the ownership of earning assets such as land, buildings, industry etc.
  • (iv) Low level of productivity in agriculture and industry.
  • (v) Large scale unemployment and under-employment.
  • (vi) Inequality of opportunity in acquiring education and skills.
  • (vii) State Policies.
  • (viii) Regional disparities


Salient features of various employment generation of poverty alleviation programme are given below:


  • 1. This flagship programme of the Government of India aims at enhancing livelihood security of households in rural areas of the country by providing at least 100 days of guaranteed wage employment in a financial year to every household whose adult members volunteer to do unskilled manual work.
  • 2. It also mandates 1/3rd participation for women.
  • 3. The primary objective of the scheme is to augment wage employment.
  • 4. This is to be done, while also focusing on strengthening natural resource management through works that address causes of chronic poverty like drought, deforestation, soil erosion and thus encourage sustainable development.

2. Deendayal Upadhyay Antyodaya Yojana (DAY)

  • 1. To reduce poverty and vulnerability of the urban poor households by enabling them to access gainful self employment and skilled wage employment opportunities, resulting in an appreciable improvement in their livelihoods on a sustainable basis, through building strong grassroots level institutions of the poor.
  • 2. The mission would aim at providing shelters equipped with essential services to the urban homeless in a phased manner.
  • 3. In addition, the mission would also address livelihood concerns of the urban street vendors by facilitating access to suitable spaces, Institutional credit, social security and skills to the urban street vendors for accessing emerging market opportunities.

3. National Health Mission

  • 1. The National Health Mission (NHM) with its two Sub-Missions, namely the National Urban Health Mission (NUHM) and National Rural Health Mission (NRHM) covering both the rural and urban areas came into effect with Cabinet approval of 1st May,2013.
  • 2. The main programmatic components of NHM include Health System Strengthening in both rural and urban areas, Reproductive-Maternal- Neonatal-Child and Adolescent Health (RMNCH+A) interventions, and control of Communicable and Non-Communicable Diseases.

4. Pradhan Mantri Suraksha Bima Yojna

  • 1. Pradhan Mantri Suraksha Bima Yojana is available to people between 18 and 70 years of age with bank accounts.
  • 2. It has an annual premium of Rs. 12 (18¢ US) excluding service tax, which is about 14% of the premium. The amount will be automatically debited from the account.
  • 3. In case of accidental death or full disability, the payment to the nominee will be Rs.2 lakh (US$3,000) and in case of partial Permanent disability Rs.1 lakh (US$1,500).
  • 4. Full disability has been defined as loss of use in both eyes, hands or feet. Partial Permanent disability has been defined as loss of use in one eye, hand or foot.
  • 5. This scheme will be linked to the bank accounts opened under the Pradhan Mantri Jan Dhan Yojana scheme.
  • 6. Most of these account had zero balance initially. The government aims to reduce the number of such zero balance accounts by using this and related schemes

5. Atal Pension Yojana

  • 1. Under the Atal Pension Yojna Scheme (APY), the subscribers, under the age of 40, would receive the fixed monthly pension of Rs. 1000 to Rs. 5000 at the age of 60 years, depending on their contributions.
  • 2. To make the the pension scheme more attractive, government would co-contribute 50% of a subscriber’s contribution or Rs. 1,000 per annum, whichever is lower to each eligible subscriber account for a period of 5 years from 2015-16 to 2019-20.
  • 3. The benefit of government’s co-contribution can be availed by those who subscribe to the scheme before December 31, 2015.

6. Pradhan Mantri Jeevan Jyoti Bima Yojana

  • 1. Pradhan Mantri Jeevan Jyoti Bima Yojana is low cost life insurance policy provided by government of India.
  • 2. Maximum sum offered under this scheme is Rs. 2 Lakh Premium payable for this insurance scheme is Rs. 330 per year or less than 1 rupee per day.
  • 3. It is Available to people in the age group of 18 to 50 and having a bank account.
  • 4. People who join the scheme before completing 50 years can, however, continue to have the risk of life cover up to the age of 55 years subject to payment of premium.

7. Pradhan Matri Awaas Yojana

The Mission will be implemented during 2015-2022 and will provide central assistance to Urban Local Bodies (ULBs) and other implementing agencies through States/UTs for:

    • In-situ Rehabilitation of existing slum dwellers using land as a resource through private participation
    • Credit Linked Subsidy
    • Affordable Housing in Partnership
    • Subsidy for Beneficiary-led individual house construction/enhancement.

Credit linked subsidy component will be implemented as a Central Sector Scheme while other three components will be implemented as Centrally Sponsored Scheme (CSS).


Unemployment is a situation when a capable and willing to do job workforce does not get work.

‘Types of Unemployment’

Cyclical Unemployment:

  • 1. It is caused due to business cycle.
  • 2. This kind of unemployment occurs when all those who want to work cannot be employed because there is not enough demand in the market for their work.
  • 3. It is called as, cyclical unemployment because it varies with the trade cycle.
  • For example, when the economy is doing well there would be greater demand for the goods, pressure on the forces of production and therefore greater demand for working hands but exactly the opposite is true for the years when the economy slows down.

Frictional Unemployment:

  • 1. This kind of unemployment occurs when a person leaves/loses a job and starts looking for another one.
  • 2. This search for a job may take a considerable amount of time resulting in frictional un-employment.
  • 3. Frictional unemployment tends to be on a high when an economy is not doing so well and low otherwise; because during good times it will be easier for people to find jobs that match their skills and requirements easily.
  • 4. This kind of unemployment may also be high in an economy if people change jobs frequently due to high level of dissatisfaction with the working conditions in the economy.

Seasonal Unemployment:

  • 1. This kind of unemployment is expected to occur at certain parts of the year.
  • 2. For example, the jobs at a hill station may experiences seasonal un-employment during the winter months because less people will visit these areas during this time.
  • 3. Another case could be the seasonal unemployment in agriculture depending upon the success of monsoon.
  • 4. Failure of monsoon may result in widespread unemployment in the agricultural sector of the economy.
  • 5. Getting laid off due to a recession is the classic case of cyclical unemployment. This is why the unemployment rate is a key economic indicator.

Structural Unemployment:

  • 1. This kind of unemployment happens when the structure of an industry changes.
  • 2. For example, as the country is tending to move from use of bicycles to motorbikes and cars, the demand for labor in the cycle industry has continuously fallen in the country.
  • 3. It essentially occurs when the industry is unable to provide jobs for those who are seeking employment because there exists a mismatch of skills between the skills of the unemployed and the skills needed for the job.
  • 4. Changes in technology and changes in tastes are two big reasons for the occurring of structural unemployment in the economy.
  • 5. One of the reasons why 12th plan focuses on skill development is to address the problem of structural unemployment in the country.

Full Employment:

Employment would be full literally, when every able-bodied adult works the number of hours considered normal for a fully employed person.

Under Employment:

  • 1. This term can be used in multiple connotations but one of the primary usage is to showcase a situation where a person with high skills works in low wage and low skills job.
  • 2. It can also be used to reflect a situation when the people employed in a job are not giving their services fully or not putting in the man-hours which can be extracted from them.
  • 3. For example, if someone works for just 10 hours a week, it would be a case of under-employment.

Disguised Unemployment:

  • 1. Such type of unemployment is quite common in the agri-cultural sector in India.
  • 2. It occurs when people are employed in a job where their presence or absence does not make any difference to the output of the economy.
  • 3. Because of large families in the rural areas several people work on farms and at times the work of 2-3 people is done by 4-5 people because otherwise it would result in unemployment.
  • 4. But in reality this is nothing but a case of disguised unemployment.
  • 5. It refers to the situation of employing surplus labours whose marginal productivity is zero.

Different Approaches for Measuring Labour Force

In a country where majority of the workers are employed in the unorganized sector and pursuing multiple activities, no single measure is appropriate to estimate the labour force parameters precisely. Labour Force related parameters may be derived by the following 4 different approaches based on different reference periods.

Usual Principal Status (UPS) Approach

  • 1. The major time criterion based on the 365 days is used to determine the activity pursued by a person under the usual principal status approach.
  • 2. Accordingly, the major time spent by a person (183 days or more) is used to determine whether the person is in the labour force or out of labour force.
  • 3. A person found unemployed under this approach reflects the chronic unemployment.

Usual Principal & Subsidiary Status (UPSS) Approach

  • 1. This approach is a hybrid one which takes into consideration both the major time criterion and shorter time period (30 days or more in any economic activity).
  • 2. A person who has worked even for 30 days or more is considered as employed.

Current Weekly Activity Status (CWS)

  • 1. If a person is found employed or seeking/available for work even for 1 hr. during the reference week, he/she is considered to be part of labour force.
  • 2. It is used to determine the seasonal fluctuations in the labour force.
  • 3. In India, where majority of the labour force is engaged in the unorganised sector of the economy, current weekly and current daily status approaches may reflect the employment-unemployment situation in a more appropriate manner.

Current Daily Activity Status (CDS)

  • 1. In a day, if a person has worked for 4 hr. or more in any activity, he/she will be considered as employed for full day and a full intensity of 1.0 will be recorded.
  • 2. If a person has worked for less than four hour but more than 1 hr. in a day, he/she will be considered as employed for half day and an intensity of 0.5 will be recorded.

Schemes for Skill Development

Pradhan Mantri Kaushal Vikas Yojana (PMKVY)

  • 1. Pradhan Mantri Kaushal Vikas Yojana (PMKVY) is the flagship outcome-based skill training scheme of MSDE.
  • 2. It is also India’s largest skill certification scheme with the objective to enable and mobilize a large number of Indian youth to take up outcome-based skill training and become employable and earn their livelihood.
  • 3. Owing to its successful first year of implementation, the Union Cabinet has approved the scheme for another four years (2016-2020) to impart skill training to 10 million youth of the country with an outlay of Rs 12,000 crores.
  • 4. It is being implemented through the National Skill Development Corporation (NSDC).

National Apprentice Promotion Scheme

  • 1. National Apprenticeship Promotion Scheme (NAPS) is a new scheme of Government of India to promote apprenticeship training and increase the engagement of apprentices from present 2.3 lakh to 50 lakh cumulatively by 2020.
  • 2. The scheme focuses on sharing of 25% of prescribed stipend subject to a maximum of Rs. 1500/- per month per apprentice to all apprentices with the employers.
  • 3. Government supports Rs. 7500 for a maximum of 500 hours for basic training.
  • 4. The target under the scheme is 5 lakh, 10 lakh, 15 lakh and 20 lakh apprentices respectively in 2016-17, 2017-18, 2018-2019 and 2019-20.
  • 5. The engagement of fresher apprentices shall be 20% of total annual target. As on today, one lakh apprentices are undergoing training under NAPS.

USSTAD scheme

  • 1. Union Government has launched the Upgrading the Skills and Training in Traditional Arts/Crafts for Development (USTAAD) Scheme.
  • 2. The Scheme aims at upgrading Skills and Training of minority communities by preservation of traditional ancestral Arts and Crafts.
  • 3. It also envisages boosting the skill of craftsmen, weavers and artisans who are already engaged in the traditional ancestral work.
  • 4. Under the scheme, assistance will be provided to traditional artisans to sell their products in order to make them more compatible with modern markets.

Deen Dayal Upadhyay Grameen Kaushal Yojana

  • 1. The Yojana aims at training 10 lakh (1 million) rural youths for jobs in three years, that is, by 2017;
  • 2. The minimum age for entry under the Yojana is 15 years compared to 18 years under the Aajeevika Skills Programme;
  • 3. Skill development training centres to be launched so as to address the unemployment problem in the rural area;
  • 4. The skills imparted under the Yojana will now be benchmarked against international standards and will complement the Prime Minister’s Make In India campaign and The Kaushalya Yojana will also the address the need for imparting training to the differently-able persons and chip in private players including international players to impart the skills to the rural youths.
  • 5. A sum of Rs. 1500 crore has been allocated for this scheme, for which disbursement will be through a digital voucher directly into qualified student’s bank account.

Skill Development Initiative Scheme

  • 1. Implemented by Directorate General Training (DGT) under Ministry of Skill Development and Entrepreneurship, SDIS aims at providing skill training to early school leavers & existing workers.
  • 2. The certifications provided under this scheme are nationally and internationally recognized.
  • 3. SDIS focuses on providing vocational training on the basis of Modular Employable Skills (MES) to school drop outs, ITI graduates, existing workers etc.

Seekho aur Kamao

  • 1. Seekno Aur Kamao is a special scheme for Minorities under which it runs courses as per Modular Employable Skills (MES) as per the guidelines of National Council for Vocational Training (NCVT).
  • 2. Implemented by Ministry of Minorities affairs, the scheme focuses skilling and upskilling of youth from minorities so that that can earn their livelihood. The age of trainees should be between 14 to 35 years of age.

Hunar se Rozgar

  • 1. The Govt. of India, Ministry of Tourism has launched a Training Programme, christened Hunar Se Rozgar Tak, to create employable skills in the interested youth who are in the age group of 18-25 years and who are minimum 8th pass.
  • 2. The upper age limit has been raised to 28 with effect from 11th November, 2010.
  • 3. The HSRT initiative is being implemented through expert institutions including the Indian Institute of Tourism and Travel Management, Institutes of Hotel Management, Food Craft Institutes and India Tourism Development Corporation.
  • 4. The State Governments/Union Territory Administrations have also been authorised to implement the initiative through Institutes selected by them for purpose.
  • 5. It is also mandatory for certain star-classified hotels to train a prescribed minimum number of persons.


  • 1. Under the scheme, 40,000 youth will be trained in five years.
  • 2. Companies which show interest in the scheme and enter into the agreement with the National Skill Development Corporation (NSDC), will screen and select students from the State.
  • 3. After assessing the skill gap of the trainees, a training module, its duration and nature of training will be designed by the companies.
  • 4. Trainees will be relocated to the training facility. After completion of the training, they will be interviewed for a job with the company and will be placed as far as possible.
  • 5. The scheme targets youth who are educated, but do not have marketable skills. It includes graduates, postgraduates, three year engineering diploma holders and youth with professional degrees.

Himayat Scheme

  • 1. It is a training-cum-placement programme for unemployed youth in Jammu and Kashmir.
  • 2. Youth will be provided short-term training for at least 3 months, in a range of skills for which there is good demand.
  • 3. At the end of the training, the youth are assured of a job and there is one year post-placement tracking to see how they are faring.
  • 4. The scheme aims to target 1,00,000 youth in 5 years.
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