Schemes and Programmes introduced by the government to remove poverty & unemployment | ICSE Class 9 Economics Notes

This note covers why governments run schemes against poverty and unemployment, the kinds of unemployment such schemes target, direct and indirect job creation, MGNREGA and its objectives, self-help groups and micro-credit, the Jan Dhan Yojana, PMGSY, the Public Distribution System, SAGY, PKVY and organic farming, IRDP, JRY and HRIDAY, a comparison of the programmes, simple calculations with days, wages and savings, and the limits of such programmes.

Why does the government run schemes against poverty and unemployment?

The majority of the poor live in rural areas, where they do not have access to the basic necessities of life. More than two-thirds of India's population depends on agriculture, which is yet to become productive enough to provide for them, and one-fourth of rural India still lives in abject poverty.

In the last few decades there has been rapid growth in the gross domestic product (GDP), the total money value of all final goods and services produced in a country in a year. This growth came without a simultaneous increase in employment opportunities, which has forced the government to take up initiatives in generating employment, particularly in rural areas.

A scheme is a government programme with a stated purpose and a group of people it aims to help. In this note the schemes are grouped in two broad ways: those that give people work and wages, and those that give people the means to earn, such as credit, bank accounts, roads, food support or help with farming.

What does unemployment mean?

Definition: The National Statistical Office (NSO) defines unemployment as a situation in which people who, owing to lack of work, are not working but either seek work through employment exchanges, intermediaries, friends or relatives, or by applying to prospective employers, or express their willingness or availability for work under the prevailing conditions of work and pay.

Economists define an unemployed person as one who is not able to get employment of even one hour in half a day. Three kinds of unemployment are described in the table.

Why is output growth not enough?

Over the forty years from 1977-78 to 2017-18, industrial output went up by more than nine times, but employment in industry went up by around three times. Production in the service sector rose by 14 times, while employment in it rose around five times.

As a result, the primary sector, mainly agriculture, is still the largest employer, with 44 per cent of the country's workers in 2017-18 (71 per cent in 1977-78), but it produces only about one sixth of the gross value added (GVA). GVA measures the contribution of a sector after adjusting for taxes and subsidies. There are more people in agriculture than is necessary, so workers there are underemployed.

How does the government create jobs directly and indirectly?

Since Independence, the Union and State governments have played an important role in generating employment or creating opportunities for employment generation. Their efforts can be broadly categorised into two: direct and indirect employment generation.

What is direct employment generation?

The government employs people in various departments for administrative purposes. It also runs industries, hotels and transport companies, and hence provides employment directly to workers. Dam construction work is one direct way in which the government generates employment.

What is indirect employment generation?

When the output of government enterprises increases, private enterprises that receive raw materials from them also raise their output, and employment opportunities in the economy increase.

For example, when a government-owned steel company increases its output, employment in that company rises directly. Private companies that purchase steel from it also increase their output and employment. This is the indirect generation of employment.

What are employment generation programmes?

Many programmes that governments implement to alleviate poverty work through employment generation. They are known as employment generation programmes. They aim to provide not only employment but also services and assets in areas such as:

• primary health, primary education, rural drinking water and nutrition;
• assistance for people to buy income and employment generating assets;
• development of community assets by generating wage employment, which means work paid in wages;
• construction of houses and sanitation, and assistance for constructing houses;
• laying of rural roads, and development of wastelands and degraded lands.

How can jobs be created in rural areas?

Take a small farmer, Laxmi, who owns about two hectares of unirrigated land that depends only on rain and grows crops like jowar and arhar. All five members of her family work in the plot throughout the year, because they have nowhere else to go for work. Everyone is working, but no one is fully employed. This is underemployment.

If the government spends some money, or banks provide a loan, to construct a well, Laxmi can irrigate her land and take a second crop, wheat, during the rabi season. If a new dam is built and canals are dug to irrigate many such farms, this could lead to a lot of employment generation within agriculture itself.

A lakh is 1,00,000. The estimates for education and tourism come from a study by the erstwhile Planning Commission, now known as NITI Aayog.

Some of these suggestions would take a long time to implement. For the short term, quick measures are needed. Recognising this, the Union Government made a law implementing the Right to Work in about 625 districts of India. That law is MGNREGA.

What is MGNREGA and what are its objectives?

Definition: The Mahatma Gandhi National Rural Employment Guarantee Act 2005 (MGNREGA 2005) guaranteed 100 days of employment in a year by the government to all those who are able to work, and are in need of work, in rural areas.

The Act is also written MNREGA. It promises 100 days of guaranteed wage employment to all rural households who volunteer to do unskilled manual work. The scheme based on this Act is one of the many measures the government has implemented to generate employment for those who need jobs in rural areas.

What are the objectives of MGNREGA?

1. To give rural people who are able to work and need work a guarantee of 100 days of employment in a year.
2. To give quick, short-term relief from unemployment, while some longer-term measures take a long time to implement.
3. To make the government answerable for the guarantee: if it fails to provide employment, it gives unemployment allowances.
4. To create works that help increase production from land, which is why such works are given preference.
5. To give poor rural households a wage income, which is transferred to bank accounts for Jan Dhan account holders.

Why is it called the Right to Work?

A right is something a person can claim. Under the Act, a person who is able to work and needs work can claim 100 days of employment in a year, and the government has a duty to provide it. Because the guarantee is made by law and is backed by an allowance, it is called the Right to Work.

Note: In 2025 the Act was replaced by Viksit Bharat-Guarantee for Rozgar and Ajeevika Mission (Viksit Bharat-G RAM G 2025). The new law is called the Viksit Bharat-Guarantee for Rozgar and Ajeevika Mission (Gramin), short form VB-G RAM G. In this name, Rozgar means employment, Ajeevika means livelihood and Gramin means rural.

How do self-help groups and micro-credit help the rural poor?

Why do the poor need self-help groups?

Poor households still depend on informal sources of credit. Banks are not present everywhere in rural India, and even where they are present, getting a bank loan is much more difficult than taking one from an informal source.

Bank loans need proper documents and collateral, an asset that the borrower owns and uses as a guarantee to the lender until the loan is repaid. Absence of collateral is one of the major reasons that prevents the poor from getting bank loans.

Moneylenders know the borrowers personally and are often willing to give a loan without collateral. However, they charge very high rates of interest, keep no records of the transactions and harass the poor borrowers.

How does a self-help group work?

The idea is to organise the rural poor, in particular women, into small Self-Help Groups (SHGs) and pool their savings. A typical SHG has 15 to 20 members, usually belonging to one neighbourhood, who meet and save regularly.

Saving per member varies from Rs 25 to Rs 100 or more, depending on the ability of the people to save. Rs stands for rupees. Members can take small loans from the group. It charges interest on these loans, but this is still less than what the moneylender charges.

After a year or two, if the group is regular in savings, it becomes eligible for a bank loan. The loan is sanctioned in the name of the group and is meant to create self-employment opportunities for the members, for instance by buying sewing machines, handlooms or cattle.

The group decides the purpose, amount, interest and repayment schedule of each loan. It is also the group that is responsible for repayment. Because of this feature, banks are willing to lend to poor women organised in SHGs, even though they have no collateral as such.

Draw five boxes joined by arrows in this order. First, 15 to 20 neighbours meet and save regularly. Second, the savings are pooled. Third, members take small loans from the pool at interest lower than the moneylender's. Fourth, after a year or two of regular savings the group becomes eligible for a bank loan. Fifth, the bank sanctions the loan in the name of the group for self-employment, and the group is responsible for repayment.

What support and reach do SHGs have?

By May 2019, nearly 6 crore women in India had become members of 54 lakh women SHGs. A crore is 1,00,00,000. In recent years, about Rs 10,000 to Rs 15,000 per SHG, and another Rs 2.5 lakh per SHG as a Community Investment Support Fund (CISF), are provided as part of a revolving fund to take up self-employment for income generation.

Such credit provisions are generally referred to as micro-credit programmes. SHGs have helped in the empowerment of women. It is alleged, however, that the borrowings are mainly confined to consumption purposes.

What does Kudumbashree show?

Kudumbashree is a women-oriented, community-based poverty reduction programme in Kerala. In 1995 a thrift and credit society was started as a small savings bank for poor women, with the objective of encouraging savings. It mobilised Rs 1 crore as thrift savings.

How do the Jan Dhan Yojana and PMGSY help rural people?

What is the Jan Dhan Yojana?

The expansion and promotion of rural banking took a backseat after the reforms. To improve the situation, in recent years all adults have been encouraged to open bank accounts as part of a scheme known as the Jan Dhan Yojana. Yojana means scheme. Account holders get several benefits:

• accidental insurance coverage of Rs 1 to 2 lakh;
• an overdraft facility for Rs 10,000, which lets an account holder draw money beyond the balance up to a limit;
• wages for government-related jobs and works under MNREGA, paid into the account;
• old age pension and other social security payments of the government, transferred to the account;
• no need to keep a minimum bank balance.

This has led to more than 50 crore people opening bank accounts. Indirectly it has promoted the thrift habit and efficient allocation of financial resources, particularly in rural areas. Banks could also mobilise funds of more than Rs 2,00,000 crores through these accounts.

What is PMGSY?

Rural roads, which link villages with towns, received special impetus under the Pradhan Mantri Grameen Sadak Yojana (PMGSY). Under this scheme special provisions are made so that every village in the country is linked to a major town by an all-season motorable road.

If the government makes better rural roads so that mini-trucks reach everywhere, farmers can continue to grow and sell their crops. This can give productive employment not just to farmers but also to others, such as those in services like transport or trade.

What do the Public Distribution System and SAGY do for the poor and for villages?

What is the Public Distribution System?

Policy instruments such as the following protect farmers and help the poor. One is the assurance of minimum support prices (MSP) for agricultural products. Another is the maintenance of buffer stocks, which are reserves of grain, of wheat and rice by the Food Corporation of India (FCI).

A third is the distribution of foodgrains and sugar through the Public Distribution System (PDS). These instruments are aimed at protecting the income of the farmers and providing foodgrains at a subsidised rate, meaning a lower price supported by the government, to the poor.

In some states the PDS functions well, and the health and nutritional status of people in such states is certainly likely to be better.

What is SAGY?

In October 2014 the Government of India introduced the Saansad Adarsh Gram Yojana (SAGY). Under it, Members of India's Parliament (MPs) need to identify and develop one village from their constituencies. To begin with, MPs can develop one village as a model village by 2016, and two more by 2019, covering over 2,500 villages in India.

MPs are expected to facilitate a village development plan, motivate villagers to take up activities and build infrastructure in the areas of health, nutrition and education. The village should not be the MP's own village or the spouse's village.

What is PKVY and why is organic farming promoted?

The National Mission for Sustainable Agriculture (NMSA) aims to make agriculture more productive, sustainable, remunerative and climate resilient. The Government has been promoting organic farming in the country through schemes such as the Paramparagat Krishi Vikas Yojana (PKVY), in which farmers are organised into groups called clusters.

Organic farming is a whole system of farming that restores, maintains and enhances the ecological balance. Conventional agriculture relies heavily on chemical fertilisers and toxic pesticides, which enter the food supply, penetrate the water sources, harm the livestock, deplete the soil and devastate natural ecosystems.

What are the benefits of organic farming?

• Cheaper inputs: it substitutes costlier inputs such as high yielding variety (HYV) seeds, chemical fertilisers and pesticides with locally produced organic inputs that are cheaper and generate good returns.
• Export income: it generates income through exports, as the demand for organically grown crops is on the rise.
• Healthy food: studies across countries have shown that organically grown food has more nutritional value, and the produce is pesticide-free.
• Jobs: organic farming requires more labour input than conventional farming, so India will find it an attractive proposition.
• Sustainable development: organic farming helps in sustainable development of agriculture, and India has a clear advantage in producing organic products for both domestic and international markets.

What are the difficulties?

Popularising organic farming requires awareness and willingness on the part of farmers to adapt to new technology. Inadequate infrastructure and the problem of marketing the products are major concerns.

It has been observed that yields from organic farming are less than those from modern agricultural farming in the initial years, so small and marginal farmers may find it difficult to adapt to large-scale production. Organic produce may also have more blemishes and a shorter shelf life than sprayed produce.

What were IRDP and JRY?

The Integrated Rural Development Programme (IRDP) began in selected blocks in 1978-79 and was extended to all blocks of the country in 1980. A block is an administrative unit of a district. Its objective was to help poor rural families rise above the poverty line, by giving them income-generating assets so that they could earn through self-employment.

The target families included small and marginal farmers, agricultural labourers and rural artisans. An asset, for example a milch animal, was bought with a bank loan and a government subsidy. From April 1999 IRDP was merged, with some allied programmes, into the Swarnajayanti Gram Swarozgar Yojana (SGSY).

The Jawahar Rozgar Yojana (JRY) was a rural wage-employment programme started on 1 April 1989. It was formed by merging two earlier programmes, the National Rural Employment Programme (NREP) and the Rural Landless Employment Guarantee Programme (RLEGP).

Its objective was to generate additional gainful employment for the unemployed and underemployed in villages, and to create useful community and economic assets. The Centre met 80 per cent of the cost and the States 20 per cent.

What is HRIDAY and how can heritage cities create jobs?

The Heritage City Development and Augmentation Yojana (HRIDAY) was launched by the Union Government in January 2015. Its objective was to preserve and revitalise the character of selected heritage cities, and to bring together urban planning, economic growth and heritage conservation in an inclusive way.

The scheme covered 12 heritage cities, among them Varanasi, Amritsar, Puri and Warangal. Unlike MGNREGA, IRDP and JRY, which were rural, HRIDAY was a scheme for cities.

Heritage cities attract tourists. The Planning Commission study, now NITI Aayog, says that if tourism as a sector is improved, additional employment can be given to more than 35 lakh people every year.

A regional craft industry is another way for a region to increase the income and employment of its people. Some of these ways need proper planning and support from the government.

How do the programmes compare with one another?

How can the effect of these programmes be worked out with simple calculations?

A few relationships help in working out days of work, wages, savings and surplus workers. The figures in Worked examples 1, 2 and 4 are illustrative practice figures and are not statistics. Worked example 3 uses the figures of the farm case described earlier. In the formulas, × means multiplied by and - means minus.

Days still guaranteed = days guaranteed - days already worked

Wage earned = days worked × daily wage

Surplus workers = workers employed - workers needed

Monthly group savings = number of members × saving per member

Worked example 1. MGNREGA 2005 guaranteed 100 days of employment in a year. A rural person covered by the guarantee has worked 64 days so far this year. Find the days of guaranteed work still available. Then find the wage earned if the person works 30 of the remaining days at a daily wage of Rs 120.

Answer: Days still guaranteed = 100 - 64 = 36 days. Wage earned = 30 × 120 = Rs 3,600.

Worked example 2. An SHG has 20 members, which is the top of the typical size of 15 to 20. Each member saves Rs 100 a month, which is within the range of Rs 25 to Rs 100 or more. Find the group's monthly savings, and its savings after 12 months if nothing is withdrawn.

Answer: Monthly group savings = 20 × 100 = Rs 2,000. Savings after 12 months = 2,000 × 12 = Rs 24,000.

Worked example 3. A farmer has four acres of land and needs only two workers and himself to carry out the operations on his farm in a year. He employs five workers, and his wife and children also work on the farm. How many hired workers are more than the farm needs?

Answer: Surplus workers = 5 - 2 = 3 hired workers more than needed. His wife and children working on the farm add further to the surplus. This is disguised unemployment.

Worked example 4. A group has 15 members, the lower end of the typical size, and each saves Rs 25 a month, the lower end of the range. Find the group's monthly savings, and how much less this is than the Rs 2,000 a month saved by the group in Worked example 2.

Answer: Monthly group savings = 15 × 25 = Rs 375. The difference is 2,000 - 375 = Rs 1,625 a month.

Draw a bar graph with the vertical axis labelled "Number of times", marked from 0 to 15. Draw two groups of bars, Industry and Services. In Industry draw bars for output (more than 9) and employment (around 3). In Services draw bars for output (14) and employment (around 5).

Using Worked example 2, draw a line graph with Months from 0 to 12 on the horizontal axis and Total savings in Rs from 0 to 24,000 on the vertical axis. Plot Rs 0 at month 0, Rs 2,000 at month 1 and so on up to Rs 24,000 at month 12, on a straight line.

What do these programmes still leave unsolved?

Some of the measures that create lasting work, such as those described earlier, would take a long time to implement. This is why a quick measure such as the Right to Work was needed for the short term.

Credit raises similar questions. The formal credit delivery mechanism has proven inadequate. With the possible exception of commercial banks, other formal institutions have failed to develop a culture of deposit mobilisation, lending to worthwhile borrowers and effective loan recovery. Agriculture loan default rates have been chronically high.

It is also alleged that SHG borrowings are mainly confined to consumption purposes. Organic farming brings its own difficulties, because yields have been observed to be lower in the initial years.

Until and unless some spectacular changes occur, the rural sector might continue to remain backward. Credit and marketing, farmer-friendly agricultural policies, and diversification into dairying, poultry, fisheries, vegetables and fruits are all essential to realise the full potential of rural India.

Glossary

• Scheme — a government programme with a stated purpose and a group of people it aims to help.
• Employment generation programmes — programmes that alleviate poverty through employment generation and also provide services such as primary health and primary education.
• Wage employment — work for which a person is paid wages, as under MGNREGA and JRY, usually creating community assets.
• Self-employment — earning a living from one's own work or small enterprise, for example with an asset bought through a loan, as under IRDP.
• Disguised unemployment — a situation in which people appear to be working but all of them work less than their potential, as on a crowded small farm.
• Seasonal unemployment — lack of work in some months of the year, because work in agriculture is seasonal.
• MGNREGA — the Mahatma Gandhi National Rural Employment Guarantee Act 2005, which guaranteed 100 days of employment in a year to rural people able to work and in need of work.
• Right to Work — a guarantee of employment made by law and backed by an unemployment allowance if the government fails to provide the work.
• Unemployment allowance — money the government gives to people if it fails in its duty to provide the employment it has guaranteed.
• Self-help group — a small group of about 15 to 20 neighbours who save regularly, lend to one another and can borrow from a bank in the group's name.
• Collateral — an asset owned by the borrower and used as a guarantee to the lender until the loan is repaid.
• Micro-credit — small loans given to the poor, often through self-help groups, to take up self-employment for income generation.
• Jan Dhan Yojana — a scheme encouraging all adults to open bank accounts, with accidental insurance, an overdraft facility and no need for a minimum balance.
• Organic farming — a whole system of farming that restores, maintains and enhances ecological balance, using locally produced organic inputs instead of costlier chemical inputs.

Common errors and misconceptions

• Misconception: MGNREGA gives every rural person a government job for the whole year. Correct: It guaranteed 100 days of employment in a year to those able to work and in need of work, with unemployment allowances if the government fails to provide employment.
• Misconception: The government creates jobs only by employing people itself. Correct: It also creates jobs indirectly, because private enterprises that receive raw materials from government enterprises raise their output and employment when government output rises.
• Misconception: Disguised unemployment means workers who have no job at all. Correct: The people appear to be working, but all of them work less than their potential, so the unemployment is hidden.
• Misconception: Moneylenders are better for the poor because they lend without collateral. Correct: They often lend without collateral, but they charge very high rates of interest, keep no records and harass the poor borrowers.
• Misconception: Banks lend to the poor only if each member owns collateral. Correct: Banks are willing to lend to poor women organised in SHGs even though they have no collateral as such, because the group is responsible for repayment.
• Misconception: IRDP and JRY were the same kind of programme. Correct: IRDP gave poor rural families income-generating assets for self-employment, while JRY was a wage-employment programme that created community assets.
• Misconception: HRIDAY was a rural employment scheme like MGNREGA. Correct: HRIDAY was a scheme for heritage cities, aimed at preserving and revitalising them.

Exam-style questions with model answers

Q1. State any two features of the Mahatma Gandhi National Rural Employment Guarantee Act 2005 (MGNREGA). [2 marks]

1. It guaranteed 100 days of employment in a year to all those who are able to work and are in need of work in rural areas.
2. If the government fails in its duty to provide employment, it gives unemployment allowances to the people.

Q2. A government-owned steel company increases its output, and private companies buy steel from it. Name the two kinds of employment generation that result and say which kind applies to the private companies. [2 marks]

1. The two kinds are direct and indirect employment generation. Employment rises directly in the steel company, because the government runs it.
2. For the private companies the kind is indirect: they purchase steel from it, so they also increase their output and their employment.

Q3. Explain three ways in which a self-help group (SHG) helps its members. [3 marks]

1. The members pool small regular savings and take small loans from the group at interest lower than the moneylender charges.
2. After a year or two of regular savings the group can get a bank loan in its name, even though its members have no collateral as such, because the group is responsible for repayment.
3. The loan helps members create self-employment, for example by buying a sewing machine, handloom or cattle.

Q4. Industrial output went up by more than nine times over forty years, but employment in industry went up by around three times. The primary sector still employs the largest share of India's workers (44 per cent in 2017-18), but produces only about one sixth of the gross value added. Why does the government need employment programmes? [3 marks]

1. Output has grown much faster than jobs, so growth alone has not created enough employment.
2. The largest share of workers (44 per cent in 2017-18) is in the primary sector, mainly agriculture, which produces only about one sixth of the gross value added, so more people work there than is necessary and they are underemployed.
3. Programmes that create work, especially in rural areas, give these people paid work and income.

Q5. Describe the Integrated Rural Development Programme (IRDP), stating its objective, the families it targeted and how it helped them. [4 marks]

1. The main objective was to help poor rural families rise above the poverty line.
2. It aimed to do this by giving them income-generating assets, so that they could earn through self-employment.
3. The target families included small and marginal farmers, agricultural labourers and rural artisans.
4. An asset, for example a milch animal, was bought with a bank loan and a government subsidy.

Q6. Explain the objectives of MGNREGA 2005. [4 marks]

1. To guarantee 100 days of employment in a year to people in rural areas who are able to work and need work.
2. To give quick, short-term relief from unemployment, because some of the longer-term measures take a long time to implement.
3. To make the government answerable: if it fails to provide employment, it gives unemployment allowances.
4. To give preference to works that would help increase the production from land, and to give poor households a wage income.

Q7. An SHG has 16 members, and each saves Rs 50 a month. Using the formula for monthly group savings, find the savings after 12 months if nothing is withdrawn, and explain why a bank may lend to the group. [5 marks]

1. The formula is: monthly group savings = number of members × saving per member.
2. Monthly group savings = 16 × 50 = Rs 800.
3. Savings after 12 months = 800 × 12 = Rs 9,600.
4. After a year or two, if the group is regular in savings, it becomes eligible for a bank loan, which is sanctioned in the name of the group to create self-employment for members.
5. The group decides each loan and is responsible for repayment, so the bank lends even though the poor women have no collateral as such.

Q8. Describe any two programmes introduced by the government to remove poverty and unemployment, giving the objectives of each. [5 marks]

1. MGNREGA 2005 is a wage-employment programme for rural areas.
2. Its objective is to guarantee 100 days of employment in a year to those able to work and in need of work, with unemployment allowances if the government fails.
3. It prefers types of work that would help increase production from land.
4. The Jawahar Rozgar Yojana (JRY), started on 1 April 1989, was also a rural wage-employment programme.
5. Its objective was to generate additional gainful employment for the unemployed and underemployed in villages and to create community and economic assets.

Key takeaways

• Schemes against poverty and unemployment either give people work and wages, or give them the means to earn, such as credit, bank accounts, roads, food support and help with farming.
• Governments generate employment directly, by employing people and running enterprises, and indirectly, when private enterprises raise output and jobs because government enterprises raise their output.
• MGNREGA 2005 guaranteed 100 days of employment in a year to rural people able to work and in need of work, with unemployment allowances if the government fails; it was replaced in 2025.
• A typical SHG has 15 to 20 members who save regularly; after a year or two the group can borrow from a bank in its name without collateral as such.
• Jan Dhan accounts bring accidental insurance, an overdraft facility and payments of wages and pensions into bank accounts, with no need for a minimum balance.
• PMGSY links villages to major towns by all-season roads, the PDS gives foodgrains at a subsidised rate to the poor, and PKVY promotes organic farming.
• IRDP gave poor rural families income-generating assets for self-employment, JRY was a wage-employment programme, and HRIDAY aimed to revitalise heritage cities.
• Quick measures such as MGNREGA were needed because some of the measures that create lasting work take a long time to implement, and it is alleged that SHG borrowings are mainly for consumption.

Test yourself

What is disguised unemployment?

It is a situation in which people appear to be working, but all of them work less than their potential. The unemployment is hidden, as on a farm that has more workers than it needs.

Give one example each of direct and indirect employment generation by the government.

Direct: the government runs industries, hotels and transport companies, or builds a dam, and employs workers. Indirect: private companies that buy steel from a government-owned steel company raise their output and employment.

For what reason is MGNREGA called the Right to Work?

The guarantee of 100 days of employment in a year is made by law, and the government must give unemployment allowances if it fails to provide employment.

What is collateral, and why does its absence keep the poor out of bank loans?

Collateral is an asset the borrower owns and uses as a guarantee to the lender until the loan is repaid. Bank loans need it, and many poor people have none.

Name three benefits that Jan Dhan account holders can get.

Any three of these: accidental insurance coverage of Rs 1 to 2 lakh, an overdraft facility for Rs 10,000, wages and pensions paid into the account, and no need for a minimum balance.

What is PMGSY meant to achieve?

Under the Pradhan Mantri Grameen Sadak Yojana, special provisions are made so that every village in the country is linked to a major town by an all-season motorable road.

Name one difficulty of organic farming.

Yields from organic farming have been observed to be lower than those of modern agricultural farming in the initial years, so small and marginal farmers may find large-scale production difficult.

How did IRDP differ from JRY?

IRDP was a self-employment programme giving poor rural families income-generating assets. JRY, started on 1 April 1989, was a wage-employment programme that also created community and economic assets.