Employment, Poverty and Inequality

Disguised or concealed unemployment describes a situation in which more people are engaged in an activity than are needed for it, so that withdrawing a worker leaves total output unchanged. In formal terms the marginal product of the last worker employed is zero, which is exactly option (c) and is the official answer. The classic Indian illustration is the family farm on which five members work a holding that four could work equally well, the fifth appearing employed on any headcount measure while contributing nothing to output. The concept was central to the development literature of the nineteen fifties, in Lewis's model of the unlimited supply of labour and in Nurkse's argument that this surplus labour was a hidden saving that could be mobilised for capital formation without reducing agricultural output.

• Option (a) is incorrect because it describes open unemployment, which is precisely what disguised unemployment is not; the whole point of the term is that the persons concerned appear to be at work.
• Option (d) is incorrect and is the strongest distractor, since low productivity per worker is a symptom that accompanies the condition but is not its definition; a worker of low but positive marginal productivity is underemployed, not disguisedly unemployed, and the definition requires the marginal contribution to be zero.
• Option (b) is incorrect: the absence of alternative employment explains why the surplus labour remains on the farm rather than moving, so it is a cause of the persistence of the condition and not the condition itself. The elimination route is to ask, of each option, whether it would still be true if the surplus workers were removed and output were unchanged.

The demographic dividend is the growth acceleration available while the share of the working age population is rising and the dependency ratio falling, and it is a window rather than an entitlement. It converts into output only if the additional workers are employable and are actually employed; if they are not, the same demographic bulge produces unemployment, underemployment and social strain, which is the standard warning that a dividend can become a liability. Skill development addresses precisely that condition, raising the productivity and employability of the entering cohort, and option (a) is correct.

• Option (c) is the most interesting of the wrong answers. Reducing infant mortality is essential and desirable, but as a demographic matter it is one of the causes of the transition that creates the dividend in the first place rather than a means of realising it, and it operates with a lag of fifteen to twenty years before the surviving children enter the labour force; it does nothing about the productivity of the cohort already of working age.
• Option (b) is incorrect because social security transfers protect people against contingency and are important on their own account, but they do not raise the productive capacity of the workforce and are directed largely at those outside it.
• Option (d) is incorrect because a change in the ownership of higher education institutions is a question of financing and governance and settles nothing about the skills the economy needs, most of which are vocational and are not delivered by universities at all. The elimination route is to ask which option operates on the productivity of the working age population itself.

• Statement 1 is incorrect and the word 'only' is again the defect. The National Skills Qualification Framework is expressly competency based and outcome based rather than input based: it organises qualifications into ten levels defined by learning outcomes across process, professional knowledge, professional skill, core skill and responsibility, and it recognises competency however acquired. Certification through the recognition of prior learning, that is, the assessment of skills acquired informally or on the job with no formal course, is a central feature of the framework and is the very mechanism examined at Q3 of this paper. A framework built to accommodate informal learning cannot confine certification to formal learning.
• Statement 2 is correct. One of the framework's stated objectives is to end the dead end character of vocational education by permitting horizontal and vertical mobility, so that a learner may move between vocational and general education streams and progress from one level to the next, with credit accumulation and transfer. Rejecting statement 1 eliminates (a) and (c), and statement 2 being a stated objective disposes of (d), leaving (b). Governing principle: a qualifications framework exists to make outcomes comparable irrespective of the route by which they were reached, so any statement restricting it to a single route is suspect on its face.

The official poverty line in India is defined as a level of monthly per capita consumption expenditure sufficient to buy a specified basket of goods and services. Since the same physical basket costs different amounts in different States, the money value of the line must differ, and separate rural and urban lines are computed for each State using State specific price data.

• Option (b) is therefore correct.
• Option (a) inverts cause and effect. The poverty rate is the proportion of the population falling below the line and is therefore an output of the exercise, not an input into where the line is drawn, so it cannot explain the line.
• Option (c) is wrong because the poverty line is anchored to consumption requirements, not to State income, and a poorer State does not on that account get a lower line.
• Option (d) is wrong because the quality of public distribution affects the welfare a household derives from a given expenditure but does not enter the computation of the line itself. The governing principle is that the poverty line is a constant real basket expressed in varying nominal terms, which makes prices the only admissible source of interstate variation among the four options.

• Statement 1 is correct. Fixed term employment allows an employer to hire a workman directly for a stated period on a written contract that lapses on expiry without any act of termination. Because non renewal at the end of the term is not retrenchment, the notice, compensation and, in larger establishments, prior government permission requirements of Chapter VB of the Industrial Disputes Act do not bite. The employer's exit becomes easier, which is precisely why industry pressed for the change and why trade unions opposed it, and the 2018 notification extended the facility from the apparel and made ups sectors, where it had been introduced in 2016, to all sectors.
• Statement 2 is correct. The Model Standing Orders provide that no temporary workman, whether monthly rated, weekly rated or piece rated, and no probationer or badli, shall be entitled to any notice or pay in lieu of notice if his services are terminated, the protection being reserved for permanent workmen. Since both statements hold, the official answer (c) follows. The item is difficult because it rests on subordinate legislation that no standard textbook carries, and the only route to it is the underlying logic that fixed term employment is an exit flexibility instrument, from which statement 1 follows by reasoning rather than recall.

• Statement 1 is incorrect. Worker productivity measured at constant prices rose in rural as well as urban areas after liberalisation; the rural increase was slower, but it was an increase and not a decline.
• Statement 2 is incorrect and is the most useful eliminator, since structural transformation moves labour out of agriculture and out of the countryside, so the rural share of the workforce fell rather than rose.
• Statement 3 is correct, the expansion of rural construction, trade, transport and services being one of the defining features of the period and the main channel through which rural incomes diversified.
• Statement 4 is correct, since aggregate employment growth in rural areas slowed markedly, particularly in the decade after 2004 to 2005, the phenomenon discussed as jobless growth. The answer is 3 and 4, giving (b).
• Options (a) and (d) rest on the rural share error.

• Statement 1 is incorrect: EPF coverage under the Employees Provident Funds and Miscellaneous Provisions Act, 1952 applies to establishments employing twenty or more persons in scheduled industries, so the universal claim covering all casual workers fails.
• Statement 2 is treated as correct: the working hours and overtime provisions of the Factories Act and the wage codes attach to the worker regardless of the casual nature of engagement, so a casual worker in a covered establishment is entitled to regulated hours and overtime.
• Statement 3 is correct: Section 15 of the Code on Wages, 1919 lineage provisions and the Payment of Wages Act permit the appropriate government to notify industries or establishments that must pay wages only by cheque or by credit to a bank account. Hence 2 and 3, giving (b). This item is genuinely contestable because statement 2 rests on an implied establishment coverage that the sentence does not state, and many aspirants eliminated it on the same universality logic that kills statement 1.

The Labour Bureau, an attached office of the Ministry of Labour and Employment with headquarters at Chandigarh and Shimla, is the designated agency for the collection and publication of labour statistics, and its remit covers industrial disputes, closures, retrenchments and lay offs alongside its better known work on the consumer price indices for industrial workers and agricultural labourers and its periodic labour surveys.

• Option (c) is therefore correct.
• Option (a) is wrong because the Central Statistics Office, now within the National Statistical Office, is responsible for national accounts, the index of industrial production and the conduct of large statistical surveys, not for the industrial relations returns filed by factories.
• Option (b) is wrong because the Department for Promotion of Industry and Internal Trade frames industrial policy and handles foreign direct investment policy and intellectual property administration; labour disputes fall outside its subject.
• Option (d) is wrong because the National Technical Manpower Information System deals with data on technically qualified manpower and educational capacity, an entirely different domain.

• Statements 1 and 2 are correct and statement 3 is the eliminator, giving (a).
• Statement 1 is correct, since the Alkire and Foster counting method underlies both the global and the national index, identifying a household as multidimensionally poor when its weighted deprivation score crosses a cut-off, and then reporting the headcount ratio and the intensity of deprivation together as the adjusted headcount.
• Statement 2 is correct, since the National Multidimensional Poverty Index uses three dimensions, health, education and standard of living, disaggregated into twelve indicators.
• Statement 3 is incorrect, and it inverts the significant fact. The global index of the United Nations Development Programme and the Oxford Poverty and Human Development Initiative uses ten indicators, and maternal health and bank account are precisely the two indicators added in the Indian index to reflect national priorities, so they are the points of difference rather than common ground. (b) and (c) accept that inversion and (d) discards the methodology statement.