Questions & explanations
1. Consider the following statements about Current Daily Status (CDS):
1. It records the activity of a person for each day of the reference week.
2. A person is considered employed on a day if they worked for at least four hours.
3. CDS can be used to measure the intensity of employment and unemployment.
Which of the statements given above is/are correct?
- (a) 1 only
- (b) 1 and 3 only
- (c) 2 and 3 only
- (d) 1, 2 and 3
Answer: (b) 1 and 3 only
Statement 1 is true: CDS records the activity status of a person for each day of the reference week. Statement 2 is false: in CDS methodology, a person working less than 4 hours on a day is counted as half-day employed (0.5 unit), not as unemployed. The 4-hour threshold marks a full employment day, not the minimum for any employment — so the statement 'employed on a day if worked at least four hours' incorrectly excludes partial-day workers who are still recorded as half-employed. Statement 3 is true: CDS measures intensity of employment and unemployment through fractional day-units, making it the most sensitive measure for underemployment. Statements 1 and 3 are correct, so the correct answer is (b).
2. Which of the following best explains why the Human Development Index (HDI) uses a geometric mean instead of an arithmetic mean?
- (a) To give equal weight to all dimensions regardless of scale
- (b) To penalize extreme disparities across dimensions
- (c) To reflect the multiplicative nature of development
- (d) To reduce the impact of outliers in data
Answer: (b) To penalize extreme disparities across dimensions
The HDI switched to a geometric mean (in 2010) because it captures imperfect substitutability between dimensions: poor performance in one dimension is not fully offset by strong performance in another, so the index penalises uneven (disparate) achievement across health, education and income. A geometric mean falls as the spread between the three indices widens, rewarding well-rounded development. Option (b) is correct. (a) Equal weighting comes from the 1/3 exponents and normalisation, not from using a geometric mean. (c) 'Multiplicative nature of development' is not the UNDP rationale. (d) Outliers are handled by the fixed min/max goalposts during normalisation, not by the geometric mean.
3. With reference to MGNREGA, consider the following statements:
1. The Act mandates that at least one-third of the beneficiaries should be women.
2. The Central Government notifies the wage rate for unskilled manual workers under MGNREGA.
3. The scheme is primarily implemented by Panchayati Raj Institutions.
Which of the statements given above is/are correct?
- (a) 1 only
- (b) 2 and 3 only
- (c) 1 and 3 only
- (d) 1, 2 and 3
Answer: (d) 1, 2 and 3
Statement 1 is correct: The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) mandates that at least one-third of the beneficiaries shall be women. This provision aims to empower women and ensure their participation in the workforce. Statement 2 is correct: The Central Government is responsible for notifying the wage rates for unskilled manual workers under MGNREGA. These rates are revised periodically. Statement 3 is correct: Panchayati Raj Institutions (PRIs) play a pivotal role in the implementation of MGNREGA, including identifying projects, preparing plans, executing works, and monitoring the scheme at the local level.
4. Consider the following statements about health indicators in India:
1. The National Health Accounts (NHA) data shows that public health expenditure in India is around 1.2% of GDP.
2. The Ayushman Bharat scheme aims to provide health insurance coverage to 100 million poor families.
3. The National Family Health Survey (NFHS-5) reports a decline in child stunting and underweight prevalence.
Which of the above statements are correct?
- (a) 1 and 2 only
- (b) 2 and 3 only
- (c) 1 and 3 only
- (d) 1, 2 and 3
Answer: (b) 2 and 3 only
Statement 1: India's public health expenditure was around 1.28% of GDP (2017-18 National Health Accounts), rising to about 2.1% by 2023-24 per government targets. The specific figure of '1.2%' in the stem refers to an older data point and is not accurate for recent years. Statement 2 is correct: Ayushman Bharat (PM-JAY) aims to cover 10 crore (100 million) poor families. Statement 3 is correct: NFHS-5 does report a decline in child stunting and underweight prevalence compared to NFHS-4. Statements 2 and 3 are clearly correct. Statement 1 is outdated/inaccurate, so the correct answer is (b). corrected to (b).
5. A researcher finds that between 2004-05 and 2011-12, India's GDP grew at an average of 8.5% per year, but employment grew at only 0.5% per year. Which of the following best explains this phenomenon?
- (a) Rapid mechanization in agriculture pushed workers out of farms into cities, but urban jobs were insufficient.
- (b) The services sector grew rapidly but with low labour intensity, while manufacturing failed to absorb surplus labour.
- (c) The government's employment guarantee scheme (MGNREGA) reduced the incentive to seek formal employment.
- (d) The labour force participation rate declined sharply due to increased school enrolment.
Answer: (b) The services sector grew rapidly but with low labour intensity, while manufacturing failed to absorb surplus labour.
This period is a classic example of jobless growth. Services (IT, finance, etc.) grew fast but created few jobs per unit of output. Manufacturing, which could have absorbed labour, grew slowly due to policy bottlenecks. Option (a) is partly true but not the best explanation; mechanization in agriculture did release labour, but the key is that non-agricultural sectors did not create enough jobs. Option (c) is incorrect; MGNREGA actually provided some employment but did not reduce overall formal employment significantly. Option (d) is false; labour force participation did not decline sharply; it was stagnant.
6. According to the Annual Status of Education Report (ASER) 2023, which of the following is a key finding regarding reading ability in rural India?
- (a) Over 80% of children in class III can read a class II level text
- (b) The proportion of children in class V who can read a class II level text has declined compared to 2018
- (c) There is no gender gap in reading ability at the primary level
- (d) Private school students perform worse than government school students in reading
Answer: (b) The proportion of children in class V who can read a class II level text has declined compared to 2018
Among the options, (b) is the correct true statement: the proportion of class V children able to read a class II level text fell from 50.5% in 2018 to 42.8% in 2022, reflecting a learning decline. (Note: the class-wise rural reading data is from the ASER 2022 'main' survey; ASER 2023 was the 'Beyond Basics' study focused on the 14-18 age group, so the precise 2023 class-V figure should not be cited.) Option (a) is false (only a minority of class III children can read class II text); (c) is false (gender gaps exist); (d) is false (private school students generally perform somewhat better in reading).
7. Which of the following is a major criticism of the Tendulkar Committee poverty line?
- (a) It set the poverty line too high, overestimating poverty
- (b) It set the poverty line too low, underestimating poverty
- (c) It used a uniform national poverty line ignoring state differences
- (d) It excluded expenditure on health and education
Answer: (b) It set the poverty line too low, underestimating poverty
The standard criticism of the Tendulkar line is that it was set too LOW, classifying many genuinely poor people as non-poor. The Tendulkar line WAS updated for post-2004-05 inflation using a price index, but critics argued the index understated actual inflation, keeping the line too low. Among the given options, (b) is the intended choice, but note its wording is loose: the line did adjust for inflation -- the real issue was that the adjustment understated inflation. Options (a) (line too high), (c) (it did use state-level prices) and (d) (it did include health/education) are wrong.
8. Consider the following statements regarding international comparisons of poverty:
1. Purchasing Power Parity (PPP) is used to adjust for differences in cost of living across countries.
2. The Multidimensional Poverty Index (MPI) is a better measure than income poverty for comparing poverty across countries.
3. India's poverty rate according to the international poverty line is lower than its national poverty rate.
Which of the statements given above is/are correct?
- (a) 1 and 2 only
- (b) 1 and 3 only
- (c) 2 and 3 only
- (d) 1, 2 and 3
Answer: (a) 1 and 2 only
Statement 1 is correct: PPP adjusts for differences in cost of living across countries. Statement 2 is correct: the MPI captures multiple non-income deprivations (health, education, living standards) and is widely regarded as a more comprehensive cross-country comparison than income poverty alone. Statement 3 is incorrect: the international poverty line is set higher than India's national consumption-based line, so India's poverty rate measured at the international line is NOT lower than the national rate (it is higher or comparable). Hence 1 and 2 only are correct = (a).
9. A PLFS report shows that the Labour Force Participation Rate (LFPR) for women in rural India is 25%, while the Worker Population Ratio (WPR) is 24%. What does the difference between LFPR and WPR indicate?
- (a) The unemployment rate for rural women is 1%.
- (b) 1% of rural women are employed but not in the labour force.
- (c) The difference is due to rounding errors in the survey.
- (d) 1% of rural women are unemployed and actively seeking work.
Answer: (d) 1% of rural women are unemployed and actively seeking work.
LFPR is the percentage of the population that is in the labour force (employed + unemployed). WPR is the percentage employed. The difference (LFPR - WPR) is the unemployment rate as a percentage of the population. Here, 25% - 24% = 1% of the population is unemployed. But the unemployment rate (as a percentage of labour force) would be (1/25)*100 = 4%. Option (d) correctly states that 1% of rural women are unemployed and seeking work. Option (a) is incorrect because the unemployment rate is 4%, not 1%. Option (b) is nonsense. Option (c) is not the reason.
10. Consider the following statements:
1. If the income share of the top 10% increases and that of the bottom 40% decreases, the Palma ratio will increase.
2. If the Gini coefficient of a country remains constant over time, it means income inequality has not changed.
3. The Lorenz curve of a country with a higher Gini coefficient will always lie entirely below that of a country with a lower Gini coefficient.
Which of the statements given above is/are correct?
- (a) 1 only
- (b) 1 and 2 only
- (c) 2 and 3 only
- (d) 1, 2 and 3
Answer: (a) 1 only
Statement 1 is correct: Palma ratio = top 10% / bottom 40%; if numerator increases and denominator decreases, ratio increases. Statement 2 is false: Gini coefficient can remain constant even if the distribution changes in a way that keeps the area under Lorenz curve the same (e.g., a transfer from the very rich to the middle class may not change Gini much). Statement 3 is false: Lorenz curves can cross; a country with a higher Gini may have a curve that is above another at some points and below at others, so it does not always lie entirely below.
11. Consider the following statements about jobless growth in India: 1. It is characterized by a decline in the employment-to-GDP elasticity. 2. It has been observed mainly in the formal sector. 3. It implies that the labour force participation rate falls. Which of the statements above is/are correct?
- (a) 1 only
- (b) 1 and 2 only
- (c) 2 and 3 only
- (d) 1, 2 and 3
Answer: (a) 1 only
Statement 1 is correct: jobless growth means lower employment elasticity (percentage change in employment per 1% GDP growth). Statement 2 is incorrect: jobless growth can occur in both formal and informal sectors; in India, much of the employment is informal, and jobless growth has been observed in formal manufacturing as well. Statement 3 is incorrect: jobless growth does not necessarily cause a fall in labour force participation; it may lead to a rise in unemployment or underemployment, but participation can remain stable or even increase.
12. With reference to the poverty line in India, consider the following statements:
1. The Tendulkar Committee recommended a poverty line of ₹32 per day in rural areas and ₹47 in urban areas (2011-12).
2. The Rangarajan Committee estimated the poverty line at ₹32 per day in rural areas and ₹47 in urban areas.
3. The Tendulkar poverty line was based on a 2100 calorie intake in rural areas.
Which of the statements given above is/are correct?
- (a) 1 and 2 only
- (b) 1 and 3 only
- (c) 2 and 3 only
- (d) 1, 2 and 3
Answer: (c) 2 and 3 only
Statement 1 incorrectly attributes the Rangarajan Committee figures to Tendulkar. The Tendulkar Committee's 2011-12 rural poverty line was approximately Rs 27 per capita per day (Rs 816/month), not Rs 32 per day. Statement 2 is correct: the Rangarajan Committee recommended Rs 32 per day rural and Rs 47 per day urban (2011-12 prices). Statement 3 is correct: the Tendulkar approach retained a 2100-kcal rural reference norm inherited from earlier committees as a cross-check. Statements 2 and 3 are correct, making (c) the right answer.