Rise in Poverty as per Labour Force Survey – UPSC GS2

Context: During the 2000’s there was decline in poverty as was indicated by the Government data. However, now multiple data point to a rise in poverty and unemployment.
What is the Periodic Labour Force Survey?
  • The PLFS is an annual survey conducted by the National Statistical Office (NSO).
  • It was started in 2017, and it essentially maps the state of employment.
  • In doing so, it collects data on variables such as the level of unemployment, the types of employment and their respective shares, etc.
  • Earlier, this job was done by Employment-Unemployment Surveys, but these were conducted once every five years.
  • The PLFS captures key indicators of the labour market such as the Labour Force Participation Rate (LFPR), Worker-Population Ratio (WPR) and Unemployment Rate (UR).
Measurement of Poverty
  • Prior to 2011, PLFS (periodic labour force survey) data was also used to estimate poverty.
  • Household monthly per capita expenditure data was also collected based on Mixed Recall Period methodology.
  • In 2011, the government decided to raise the poverty line as per the recommendations of the Tendulkar committee.

Rise in poverty figures
  • In absence of CES data, PLFS data can be used to estimate poverty.
  • NSO’s CES data 2017 (leaked) showed that rural consumption had fallen by 8% and since over 65% of the population is rural, poverty is estimated to be increased.
  • The absolute number of poor had risen from 217 Mn(2012) to 270 Mn(2019). (first time since history of CES)
Reasons for increased poverty
  • Demonetization and GST reforms struck a heavy blow to the unorganized sector & MSME.
  • Household savings declined, private investment fell from 31% to 28%
  • Public expenditure was constrained by fiscal consolidation
  • Exports fell, in absolute terms
  • There was a rise in unemployment and real wages did not increase.

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