Flash Card

LAKSHYA-75 [Day-6] Static Flash Cards for IAS Prelims 2020

Social exclusion & Vulnerability, Causes of Poverty, The Public Distribution System (PDS), National Food Security Act (NFSA), 2013, Per capita income and Gross National Income (GNI) per capita income, Antyodaya Anna Yojana, Human Development Index (HDI), Primary sector, Secondary Sector & Tertiary sector, Collateral assets & terms of credit; Factors that have enabled globalisation
By IASToppers
March 11, 2020



Tax on imports is an example of trade barrier which can be used by the Governments to increase or decrease (regulate) foreign trade. True OR False.

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Answer: True.

Enrich Your Learning:

Factors that have enabled globalisation:


  • Rapid improvement in technology has been one major factor that has stimulated the globalisation process. For instance, the past fifty years have seen several improvements in transportation technology. This has made much faster delivery of goods across long distances possible at lower costs.
  • In recent times, technology in the areas of telecommunications, computers, Internet has been changing rapidly. Telecommunication facilities (telegraph, telephone including mobile phones, fax) are used to contact one another around the world, to access information instantly, and to communicate from remote areas. This has been facilitated by satellite communication devices.
  • Computers have now entered almost every field of activity and might have also ventured into the amazing world of internet, where one can obtain and share information on almost anything you want to know. Internet also allows to send instant electronic mail (e-mail) and talk (voice-mail) across the world at negligible costs.

Liberalisation of foreign trade and foreign investment policy:

  • Tax on imports is called a barrier because some restriction has been set up. Governments can use trade barriers to increase or decrease (regulate) foreign trade and to decide what kinds of goods and how much of each, should come into the country.
  • The Indian government had put barriers to foreign trade and foreign investment. This was considered necessary to protect the producers within the country from foreign competition. Industries were just coming up in the 1950s and 1960s, and competition from imports at that stage would not have allowed these industries to come up. Thus, India allowed imports of only essential items such as machinery, fertilisers, petroleum etc.
  • All developed countries, during the early stages of development, have given protection to domestic producers through a variety of means.
  • Starting around 1991, some farreaching changes in policy were made in India. The government decided that the time had come for Indian producers to compete with producers around the globe. It felt that competition would improve the performance of producers within the country since they would have to improve their quality.
  • Barriers on foreign trade and foreign investment were removed to a large extent. This meant that goods could be imported and exported easily and also foreign companies could set up factories and offices here.

Removing barriers or restrictions set by the government (known as liberalization):

  • With liberalisation of trade, businesses are allowed to make decisions freely about what they wish to import or export. The government imposes much less restrictions than before and is therefore said to be more liberal.



What is Collateral Assets?

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Collateral is an asset that the borrower owns (such as land, building, vehicle, livestocks, deposits with banks) and uses this as a guarantee to a lender until the loan is repaid. If the borrower fails to repay the loan, the lender has the right to sell the asset or collateral to obtain payment.

Enrich Your Learning:

Collateral assets:

  • Every loan agreement specifies an interest rate which the borrower must pay to the lender along with the repayment of the principal. In addition, lenders may demand collateral (security) against loans.
  • Property such as land titles, deposits with banks, livestock are some common examples of collateral used for borrowing.

What is terms of credit?

  • Interest rate, collateral and documentation requirement, and the mode of repayment together comprise what is called the terms of credit.
  • The terms of credit vary substantially from one credit arrangement to another. They may vary depending on the nature of the lender and the borrower.



Retail Shops and Restaurants are considered under which main sector of the economy? a) Secondary Sector OR b) Tertiary Sector

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Answer: Tertiary Sector

Enrich Your Learning:

Primary sector:

  • The primary sector is sometimes known as the extraction sector – because it involves taking raw materials. These can be renewable resources, such as fish, wool and wind power.
  • It can be the use of non-renewable resources, such as oil extraction, mining for coal. It is also called agriculture and related sector.

Secondary Sector:

  • It covers activities in which natural products are changed into other forms through ways of manufacturing that associate with industrial activity. It is the next step after primary.
  • The product is not produced by nature but has to be made and therefore some process of manufacturing is essential. This could be in a factory, a workshop or at home. For example, using cotton fibre from the plant, one can spin yarn and weave cloth.
  • Since this sector gradually became associated with the different kinds of industries that came up, it is also called as industrial sector.

Tertiary sector:

  • The service sector is concerned with the intangible aspect of offering services to consumers and business.
  • It involves retail of the manufactured goods. Transport, storage, communication, banking, trade are some examples of tertiary activities. Since these activities generate services rather than goods, the tertiary sector is also called the service sector.



Human Development Report is published by______________.  a) United Nations Development Programme OR b) United Nations Human Rights Council

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Answer: United Nations Development Programme

Enrich Your Learning:

Human Development Index (HDI):

  • It is a statistical tool used to measure a country’s overall achievement. It compares countries based on the educational levels of the people, their health status and per capita income.
  • It is launched annually by the United Nations Development Programme.
  • Pakistani economist Mahbub ul Haqcreated HDI in 1990.


Calculation of the index combines four major indicators:

  • Life expectancy for health,
  • Expected years of schooling,
  • Mean of years of schooling for education and
  • Gross National Income per capita for standard of living.

Highlights of Human Development Index (HDI) 2019:

Global Highlights:

Top 3 countriesNorway (1st), Switzerland (2nd) and Ireland (3rd).

  • At 71, Sri Lanka is ranked much higher than China (85th). Maldives is ranked at 104, much ahead of its South Asian counterparts like Bhutan (134), Bangladesh (135), Nepal (147) and Pakistan (152).
  • As the number of people coming out of old poverty (based on access to health services) is increasing, the world is going towards another type of poverty based on technology, education and climate.

India specific Highlights:

Rank of India: 129th out of 189 countries

  • India remains the home to 28% poor peopleout of a global population of the 1.3 billion.
  • South Asia, of which India is the largest country, constitutes 41 % of the world’s poor.
  • Between 1990 and 2018India’s HDI value increased by 50 % (from 0.431 to 0.647), which places it above the average for countries in the medium human development group and above the average for other South Asian countries.

Despite progress of India, group-based inequalities persist on the Indian Subcontinent, especially affecting women and girls.



Families getting annual income below Rs.20000 from the both rural and urban areas, are the Beneficiaries Antyodaya Anna Yojana. True OR False.

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Correct Statement

  • Families getting annual income below Rs.15000 from the both rural and urban areas, are the Beneficiaries Antyodaya Anna Yojana.

Enrich Your Learning:

Antyodaya Anna Yojana:

Antyodaya Anna Yojana is a Government of India sponsored scheme to provide highly subsidised food to the poorest families. It was launched in 2000 and first implemented in Rajasthan.

Salient Features:

  • 25 kilograms of foodgrains were made available to each eligible family at a highly subsidised rate of Rs 2 per kg for wheat and Rs 3 per kg for rice. This quantity has been enhanced from 25 to 35 kg with effect from April 2002.
  • Once a family has been recognized as eligible for the AAY, they are to be given a unique Antyodaya Ration Card (PDS yellow card) which acts as a form of identification, proving that the bearer is authorized to receive the level of rations the card describes.


Rural Areas Beneficiaries

  • Families getting an annual income up to Rs.15000
  • Old age pensioners
  • Small and marginal farmers
  • Landless agricultural labourers
  • Physically handicapped persons
  • Destitute widows
  • Rural artisans or craftsmen such as potters, weavers, blacksmiths, carpenters and slum dwellers.

Urban Areas Beneficiaries

  • Families getting annual income below Rs.15000
  • People living in slums
  • Daily wager such as Rickshaw-pullers
  • Porters and Fruit and flowers sellers on pavements, Domestic servants, Construction workers
  • Households headed by widows or disabled persons or persons aged 60 years or more with no assured means of subsistence or societal support
  • Snake charmers, rag pickers, cobblers wtc.


  • Family members falling under Below Poverty line
  • Annual income of Rs.15000 below families
  • Disabled persons
  • Widows and senior citizen of 60 years who heading a family
  • Tribal Families in the rural and mountain



What is per capita income and Gross National Income (GNI) per capita income?

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  • Per capita income or average income measures the average income earned per person in a given area in a specified year. 
  • GNI is the sum of value added by all resident producers plus any product taxes (less subsidies) not included in the valuation of output plus net receipts of primary income (compensation of employees and property income) from abroad.

Enrich Your Learning:

Per capita income and Gross National Income (GNI) per capita income:

Per capita income:

  • It is a measure of the amount of money earned per person in a nation or geographic region.
  • It can be used to determine the average per-person income for an area and to evaluate the standard of living and quality of life of the population.
  • Per capita income for a nation is calculated by dividing the country’s national income by its population.

GNI per capita:

  • GNI per capita is gross national income divided by mid-year population.
  • For the current 2020 fiscal year, as per World development report 2020:
  • Low-income economies are defined as those with a Gross National Income (GNI) per capita of $1,025 or less in 2018;
  • Lower middle-income economies: GNI per capita between $1,026 and $3,995;
  • Upper middle-income economies: GNI per capita between $3,996 and $12,375;
  • High-income economies: GNI per capita of $12,376 or more.
  • India is in Lower middle income economy with $2,020 GNI per capita in 2018.
  • India’s per-capita monthly income is estimated to have risen by 6.8 per cent to Rs 11,254 during 2019-20, government data on national income showed recently.



Under the National Food Security Act (NFSA) 2013, 90% of the rural population and 50% of the urban population have been categorized as eligible households for food security in India. True OR False.

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75% of the rural population and 50% of the urban population have been categorised as eligible households for food security under the National Food Security Act (NFSA) 2013.

Enrich Your Learning:

National Food Security Act (NFSA), 2013:

  • Objective: to provide for food and nutritional security in human life cycle approach by ensuring access to adequate quantity of quality food at affordable prices to people.

Salient features:

  • Coverage and entitlement under Targeted Public Distribution System (TPDS): Upto 75% of the rural population and 50% of the urban population will be covered under TPDS, with uniform entitlement of 5 kg per person per month.
  • However, since Antyodaya Anna Yojana (AAY) households constitute poorest of the poor, and are presently entitled to 35 kg per household per month, entitlement of existing AAY households will be protected at 35 kg per household per month.
  • State-wise coverage: Corresponding to the all India coverage of 75% and 50% in the rural and urban areas, State-wise coverage will be determined by the Central Government.
  • Subsidised prices under TPDS and their revision: Foodgrains under TPDS will be made available at subsidised prices of Rs. 3/2/1 per kg for rice, wheat and coarse grains for a period of three years from the date of commencement of the Act. Thereafter prices will be suitably linked to Minimum Support Price (MSP).
  • In case, any State’s allocation under the Act is lower than their current allocation, it will be protected upto the level of average offtake during last three years, at prices to be determined by the Central Government.
  • Identification of Households: Within the coverage under TPDS determined for each State, the work of identification of eligible households is to be done by States/UTs.
  • Nutritional Support to women and children: Pregnant women and lactating mothers and children in the age group of 6 months to 14 years will be entitled to meals as per prescribed nutritional norms under Integrated Child Development Services (ICDS) and Mid-Day Meal (MDM) schemes. Higher nutritional norms have been prescribed for malnourished children upto 6 years of age.
  • Maternity Benefit: Pregnant women and lactating mothers will also be entitled to receive maternity benefit of not less than Rs. 6,000.
  • Women Empowerment: Eldest woman of the household of age 18 years or above to be the head of the household for the purpose of issuing of ration cards.
  • Grievance Redressal Mechanism: Grievance redressal mechanism at the District and State levels. States will have the flexibility to use the existing machinery or set up separate mechanism.
  • Cost of intra-State transportation & handling of foodgrains and FPS Dealers’ margin: Central Government will provide assistance to States in meeting the expenditure incurred by them on transportation of foodgrains within the State, its handling and FPS dealers’ margin as per norms to be devised for this purpose.
  • Food Security Allowance: Provision for food security allowance to entitled beneficiaries in case of non-supply of entitled foodgrains or meals.



What is the objective of The Targeted Public Distribution System (TPDS)?

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Objective: to provide subsidised food and fuel to the poor through a network of ration shops. Food grains such as rice and wheat that are provided under TPDS are procured from farmers, allocated to states and delivered to the ration shop where the beneficiary buys his entitlement.

Enrich Your Learning:

The Public Distribution System (PDS):

  • PDS which evolved as a system of management for food and distribution of food grains was relaunched as Targeted Public Distribution System (TPDS) in June 1997.
  • It is controlled by the Ministry of Consumer Affairs.
  • Operated jointly by the Central Government and the State Government of India.
  • The responsibilities include:
  • Issue of Ration Cards for the people below the poverty line.
  • Identification of families living below the poverty line.
  • Management of food scarcity and distribution of food grains.
  • Allocations of commodities such as rice, wheat, kerosene and sugar to the States and Union Territories.

Targeted Public Distribution System (TPDS):

  • TPDS was introduced in 1997 under the Minimum Common Need Programme of Government of India.
  • It envisages identifying the poor households and giving them a fixed entitlement of food grains, rice and/ or wheat at specially subsidized prices (at half the Economic Cost).

Categorisation of beneficiaries:

  • Under TPDS, beneficiaries were divided into two categories:
  • Households below the poverty line or BPL (BPL Yellow rationcard holders are provided with 35 Kgs foodgrains (Wheat + Rice)
  • Households above the poverty line or APL. (APL Saffron rationcard holders are provided with 15 Kgs foodgrains (Wheat + Rice)).
  • In 2000, additional classification of Antyodaya Anna Yojana (AAY) out of BPL families was included to provide dedicated food grain allotments at highly subsidised prices to the poorest of the poor.
  • TPDS is administered under the Public Distribution System (Control) Order 2001, notified under the Essential Commodities Act, 1955 (ECA). TDPS (Control) Order, 2015 and PDS (Control) Order, 2001, stipulate that State/UT Governments are required to review the lists of beneficiaries every year for the purpose of deletion of ineligible families and inclusion of eligible families.
  • TPDS is operated under the joint responsibility of the Central and the State/Union Territory (UT) Governments. Central Government is responsible for procurement, allocation and transportation of food grains upto the designated depots of the Food Corporation of India. The distribution of food grains within the States/UTs, identification of eligible beneficiaries etc. rest with the concerned State/UT Governments.
  • In September 2013, Parliament enacted the National Food Security Act (NFSA), 2013. The Act relies largely on the existing TPDS to deliver food grains as legal entitlements to poor households.
  • To prevent the violation of provisions of TPDS [Control] Order 2015 and NFSA 2013, the Department of Food & Public Distribution started ‘End-to-end Computerisation of TPDS Operations’ scheme for digitization of ration cards/beneficiary and other databases, setting up of transparency portals and grievance redressal mechanisms and issuance of foodgrains through biometric authentication.

PUCL vs. Union of India

  • In 2001, the People’s Union for Civil Liberties filed a writ petition in the Supreme Court contending that the “right to food” is essential to the right to life as provided in Article 21 of the Constitution.
  • The Court issued several interim orders, including the implementation of eight central schemes as legal entitlements such as PDS, Antyodaya Anna Yojana, the Mid-Day Meal Scheme, and Integrated Child Development Services (ICDS). In 2008, the Court ordered that Below Poverty Line (BPL) families be entitled to 35 kg of food grains per month at subsidised prices.



Enlist several causes for the widespread poverty in India.

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Answer & Enrich Your Learning:


Causes of Poverty:

There were a number of causes for the widespread poverty in India:

  • Historical reason: The low level of economic development under the British colonial administration. The policies of the colonial government ruined traditional handicrafts and discouraged development of industries like textiles resulted in less job opportunities and low growth rate of incomes.
  • A high growth rate of population. The two combined to make the growth rate of per capita income very low.
  • The industries, both in the public and the private sector, did provide some jobs. But these were not enough to absorb all the job seekers.
  • Unable to find proper jobs in cities, many people started working as rickshaw pullers, vendors, construction workers, domestic servants etc.
  • With irregular small incomes, these people could not afford expensive housing. They started living in slums on the outskirts of the cities and the problems of poverty, largely a rural phenomenon also became the feature of the urban sector.
  • The huge income inequalities: One of the major reasons for this is the unequal distribution of land and other resources. Despite many policies, India has not been able to tackle the issue in a meaningful manner.
  • Major policy initiatives like land reforms which aimed at redistribution of assets in rural areas have not been implemented properly and effectively by most of the state governments.
  • Since lack of land resources has been one of the major causes of poverty in India, proper implementation of policy could have improved the life of millions of rural poor.
  • Socio-cultural and economic factors: In order to fulfil social obligations and observe religious ceremonies, people in India, including the very poor, spend a lot of money.
  • Small farmers need money to buy agricultural inputs like seeds, fertilizer, pesticides etc. Since poor people hardly have any savings, they borrow.
  • Unable to repay because of poverty, they become victims of indebtedness. So the high level of indebtedness is both the cause and effect of poverty.



Which concept describes the greater probability of certain communities or individuals of becoming, or remaining, poor in the coming years in terms of poverty? a) Social exclusion OR b) Vulnerability

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Answer: Vulnerability

Enrich Your Learning:

Social exclusion and Vulnerability:

Analysis of poverty based on social exclusion and vulnerability is now becoming very common.

Social exclusion:

  • According to this concept, poverty must be seen in terms of the poor having to live only in a poor surrounding with other poor people, excluded from enjoying social equality of better -off people in better surroundings.
  • Social exclusion can be both a cause as well as a consequence of poverty in the usual sense. It is a process through which individuals or groups are excluded from facilities, benefits and opportunities that others enjoy.
  • Example- The working of the caste system in India in which people belonging to certain castes are excluded from equal opportunities. Social exclusion thus may lead to, but can cause more damage than, having a very low income.


  • Vulnerability to poverty is a measure, which describes the greater probability of certain communities (members of a backward caste) or individuals (such as a widow or a physically handicapped person) of becoming, or remaining, poor in the coming years.
  • It is determined by the options available to different communities for finding an alternative living in terms of assets, education, health and job opportunities.
  • Further, it is analysed on the basis of the greater risks these groups face at the time of natural disasters (earthquakes, tsunami), terrorism etc. Additional analysis is made of their social and economic ability to handle these risks.
  • It describes the greater probability of being more adversely affected than other people when bad time comes for everybody, whether a flood or an earthquake or simply a fall in the availability of jobs.
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