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Subject: Poverty

  • Why is the centre revising the NFSA 

    Why in the News?

    The Union Food and Public Distribution Department has published a draft amendment to the National Food Security Act (NFSA), 2013 converting the Antyodaya Anna Yojana (AAY) entitlement from a household-based to a per-capita formula. Tamil Nadu and Kerala have objected, arguing the change will cut monthly foodgrain allocations for smaller households even though it is framed as an equity correction. The dispute revives a food-politics fault line between the Centre and these two States that traces back to the NFSA’s 2013 enactment.

    What has the Centre proposed, and what does it claim to fix?

    1. Current rule: Every Antyodaya Anna Yojana (AAY) household receives 35 kg of foodgrains per month, regardless of household size.
    2. Proposed rule: Each person in an AAY household is entitled to 7 kg per month, subject to a ceiling of 35 kg per household.
    3. Legal provision amended: The first provision to Section 3(1) of the NFSA, which governs the right to subsidised foodgrains for eligible households.
    4. Stated rationale: The F&PD Department says the household-based system causes intra-category inequity. Smaller households get a higher per-capita share. Larger households get a lower per-capita share that can fall below what priority households receive.
    5. Stated objective: The amendment aims to make allocation more rational and align entitlements with nutritional norms.
    6. Consultation window: Public comments were invited till July 13, 2026.
    7. Gap in the amendment: The draft does not address inclusion of ineligible persons as beneficiaries. This problem remains a State-level issue.

    Why have Tamil Nadu and Kerala historically treated food policy as high-stakes politics?

    1. Kerala’s PDS legacy: Kerala traces informal food distribution mechanisms to the erstwhile princely State of Travancore and launched a formal Public Distribution System (PDS) in 1962, three years before the Food Corporation of India (FCI) was established.
    2. Tamil Nadu’s political precedent: Incumbent governments lost power in 1952 and 1967 over failure to manage rice shortages, making rice policy a lasting political sensitivity.
    3. Kerala’s resistance to the 2013 NFSA: The Congress-led UDF government, despite the Congress-led UPA pushing the law at the Centre, resisted implementation. It argued the law would drop a large number of poor families and impose a heavy financial burden on the State.
    4. Delayed Kerala rollout: Chief Minister Oommen Chandy committed to enforcing the NFSA, but the formal decision was taken only under his successor, Pinarayi Vijayan.
    5. Tamil Nadu’s universal rice policy: Chief Minister Jayalalithaa opposed the NFSA after her government began distributing free rice to all ration cardholders in 2011, regardless of economic status.
    6. Concession extracted in 2013: Tamil Nadu secured a Central guarantee that its then-existing allocation levels would be legally protected under the NFSA.
    7. Delayed adoption: Both southern States joined the rest of the country in implementing the NFSA only in November 2016.

    Why does a per-capita formula built on a household ceiling disadvantage southern States?

    1. Mechanical effect of the formula: A household with fewer than five members receives less than 35 kg under the per-capita rule, since 7 kg multiplied by fewer than five persons falls short of the existing ceiling.
    2. Kerala’s structural exposure: Kerala’s Food Minister has argued that States characterised by nuclear families will lose out, since Kerala took the position in 2013 that AAY cardholders deserved “special consideration,” a stance it maintains.
    3. Tamil Nadu’s quantified loss: The State’s monthly allocation is projected to fall from 65,261 tonnes to 42,040 tonnes under the new formula.
    4. Scale of exposure in Tamil Nadu: Of 18.64 lakh AAY households, 15.75 lakh have fewer than five members, covering 58.51 lakh of the State’s 69.27 lakh AAY beneficiaries.
    5. Non-substitutability argument: Rice is a staple across all three daily meals for AAY cardholders and cannot be replaced with market purchases without significant out-of-pocket cost.
    6. North-South divide argument: Right to Food Campaign functionary Anuradha Talwar has argued that northern States, with larger average family sizes, will receive higher allocations under the new formula while southern States lose out.
    7. South’s collective stake: The five southern States and Puducherry together hold 52.51 lakh of India’s 250 lakh AAY household ceiling, about one-fifth of the national total, making the region’s exposure to the formula change substantial in absolute terms.

    What is the way forward, and does it resolve the underlying tension?

    1. Process concern: A change of this scale should have been subjected to wider public scrutiny before a consensus was sought, according to food policy commentary cited in the report.
    2. Middle-path proposal: Tamil Nadu Progressive Consumer Centre president T. Sadagopan has suggested a flat allocation of 30 kg per household, irrespective of family size, as a compromise.
    3. Fiscal rationale for the middle path: A flat 30 kg allocation would still let the Union government reduce its overall subsidy bill compared to the current 35 kg ceiling.
    4. Implementation context: Current off-take and distribution data for the financial year up to May 2026 show uneven utilisation across southern States relative to their allocations, indicating that formula design alone will not resolve execution gaps in the PDS chain.
    5. Unresolved gap: Neither the Centre’s draft nor the proposed middle path addresses the separate, State-level problem of ineligible persons remaining on beneficiary lists.

    Conclusion

    The NFSA amendment corrects a genuine per-capita inequity within the AAY category, but the household ceiling built into the new formula shifts the burden onto smaller-household southern States, reviving a federal food-politics conflict rooted in each State’s distinct PDS history. The amendment leaves the parallel problem of ineligible beneficiaries at the State level untouched, meaning one inequity is corrected while another persists. A flat per-household allocation remains a proposed middle path, but the Centre has not formally responded to it.

    PYQ Relevance

    [UPSC 2013] What are the salient features of the National Food Security Act, 2013? How has the Food Security Bill helped in eliminating hunger and malnutrition in India?

    Linkage: The PYQ examines the provisions and effectiveness of the NFSA as a rights-based framework for ensuring food and nutritional security. The proposed shift from a fixed 35 kg entitlement per AAY household to 7 kg per person, capped at 35 kg, enables a critical assessment of whether rationalising foodgrain allocation may weaken existing NFSA entitlements and affect vulnerable households unevenly.

  • “The incidence and intensity of poverty are more important in determining poverty based on income alone”. In this context analyse the latest United Nations Multidimensional Poverty Index Report.

    As per World Bank, Poverty is a “pronounced deprivation in well-being” which includes low incomes and the inability to acquire basic goods and services necessary for survival with dignity.

    Incidence (H): The proportion of the population who are multidimensionally poor (i.e., deprived in a set share of weighted indicators).

    Intensity (A): The average share of deprivations experienced by the multidimensionally poor.

    MPI value (H × A): Combines incidence and intensity, capturing both how many are poor and how deprived they are beyond the income dimension.

    Why Incidence and Intensity Matter More than Income Alone

    Comprehensive Understanding: Income tells how much money people have, while incidence and intensity show what capabilities they lack.

    Reveals Depth of Deprivation: Two people may have the same income, but one may suffer more due to lack of education or sanitation – intensity captures this depth.

    Targets Policy Better: Helps governments identify which dimensions (health, education, housing) need priority investment.

    Explains Poverty Despite Income Growth: India’s poverty rate has declined (2.35% extreme poverty, World Bank 2024), yet hunger, malnutrition, and illiteracy persist – showing income growth doesn’t equal welfare growth.

    Measures Human Development, Not Just Economics: Aligns with Amartya Sen’s Capability Approach – poverty is deprivation of basic freedoms and opportunities, not just low income.

    Global Multidimensional Poverty Index (MPI) Report 2025

    Global Poverty Statistics – 1.1 billion (18.3%) people in acute multidimensional poverty. Majority are young, rural, and living in low human development countries

    MPI Reduction Trends – Of 88 countries with comparable data, 76 saw a decline in MPI at least once

    Multidimensional Poverty in India

    Poverty fell from 55.1% (2005-2006) to 16.4% (2019-2021)

    About 415 million people exited multidimensional poverty

    Poverty and Climate Interlinkages

    32 million people displaced by climate-related shocks in 2022

    309 million poor people live in regions with three or four overlapping climate hazards

    Without strong climate action, extreme poverty could nearly double by 2050

    MPI Across Income Levels

    64.5% of global poor live in middle-income countries

    55.5% in lower-middle-income nations

    9% in upper-middle-income nations

    Common Global Deprivations

    Clean cooking fuel: 970 million deprived

    Adequate housing: 878 million deprived

    Sanitation: 830 million deprived

    Undernutrition: 635 million deprived

    Children out of school: 487 million deprived

    Limitations of the Global MPI

    Data Gaps: Many countries rely on outdated or incomplete household surveys; MPI data lags actual conditions.

    Uniform Weights and Indicators: Equal weighting (health, education, living standards) may not reflect local priorities or contexts.

    Intra-country Variations: National averages mask disparities between rural-urban areas, genders, and regions.

    No Vulnerability Capture: MPI measures current deprivation but not people at risk of falling back into poverty.

    Way Forward

    Social Determinants Approach: Integration of hunger and poverty with nutrition, sanitation (Swachh Bharat), and clean energy (Ujjwala Yojana).

    Adopt data-driven local interventions under Aspirational Districts Programme to target high-burden regions.

    Adopt Brazil’s Bolsa Família conditional cash transfer scheme

    Poverty is the worst form of violence – Mahatma Gandhi.

    A whole of government and whole of society approach is needed to achieve SDG-1

  • Besides the welfare schemes, India needs deft management of inflation and unemployment to serve the poor and the underprivileged sections of the society. Discuss.

    The Indian Constitution envisions a Welfare State under the DPSP (Articles 36-51), mandating the State to ensure social, economic, and political justice through equitable development. However, impact is undermined by macroeconomic instability, particularly high inflation (8%) and unemployment (6-8%).

    Welfare Schemes

    Financial Inclusion

    PM Jan Dhan Yojana -55 Cr accounts opened

    Aadhaar -1.35 Billion generated

    Direct Benefit Transfer (DBT) -minimizes leakages.

    Social Security Nets

    Atal Pension Yojana for unorganised sector workers.

    PM Maan Dhan Yojana -old-age income security

    Food Security

    Atal Kalyan Yojana / PMGKAY – 67% population covered

    Mid-Day Meal (PM Poshan)

    Support for Vulnerable Sections

    PM Matru Vandana Yojana

    Ayushman Bharat

    Skills and Training

    PM Kaushal Vikas Yojana (PMKVY)

    ‘Earn While You Learn’ Scheme

    Social Infrastructure

    Swachh Bharat Mission

    Ujjwala Yojana -10 Cr LPG connections

    Gram Sadak Yojana

    Women and SC-ST empowerment

    PM Mudra Yojana

    Stand-Up India

    The Impact of Inflation on the Poor

    Erosion of Real Income: Inflation disproportionately affects low-income households as food and fuel form over 50% of their consumption basket.

    Reduced Effectiveness of Welfare Schemes: High prices diminish the real value of cash transfers under DBT or PM-Kisan.

    Rural Distress: Inflation widens the rural-urban gap, as agricultural incomes lag behind input costs (fertilizer, diesel).

    Fiscal Stress: Rising subsidy bills due to inflation crowd out developmental spending.

    Unemployment and Its Consequences for the Poor

    Jobless Growth: Despite 7%+ GDP growth, unemployment among youth remains 17.3% (PLFS 2022-23).

    Informalisation: Around 90% of India’s workforce remains in the informal sector, lacking job security or social protection.

    Poverty Persists12.9% Indians still multidimensionally poor (NITI Aayog, 2023).

    Gender Disparity: Female LFPR, though improved to 41% (2022-23), still trails male LFPR (78%) and Global Average (48%)

    Welfare Dependency: Lack of stable income pushes people to rely on welfare transfers, which creates fiscal burden and undermines self-reliance.

    Policy Measures for Deft Management

    Inflation Management:

    Strengthen Monetary-Fiscal Coordination between RBI and Ministry of Finance.

    Build food supply buffers via eNAM and cold chain networks.

    Promote energy transition to reduce import-driven inflation.

    Employment Generation:

    Expand PM Vishwakarma, PMEGP, and Start-Up India for entrepreneurship.

    Promote labour-intensive sectors – textiles, food processing, tourism. (Economic Survey)

    Urban MGNREGA to reduce urban poverty

    Invest in green and digital jobs through the IndiaAI Mission and National Green Hydrogen Mission.

    Integrate Skill India with industry demand mapping.

    Capability Approach: increase expenditure on Health (2.5% of GDP) and Education (6% of GDP)

    Only by aligning macro-economic management with social justice objectives can India realise the vision of “Sabka Saath, Sabka Vikas, Sabka Vishwas”

  • Poverty and malnutrition create a vicious cycle, adversely affecting human capital formation. What steps can be taken to break the cycle?

    Impact of poverty and malnutrition on Human Capital Formation

    World Bank (2024): India loses nearly 4% of GDP annually due to malnutrition-related productivity loss.

    Chronic malnutrition causes stunting and wasting among children, leading to weaker immunity and frequent illness.

    Impact on Cognitive Development – Poverty forces children into child labor or causes school dropouts. Malnourished children suffer from impaired brain development, lower IQ, and learning disabilities.

    High disease burden (anaemia, diarrhoea, TB) reduces life expectancy and working life span. Malnutrition contributes to 45% of child deaths (UNICEF, 2024).

    The International Labour Organization (ILO) notes that productivity losses due to undernutrition can reach up to 10% of lifetime earnings per individual.

    Women’s malnutrition (57% anaemic, NFHS-5) leads to poor maternal health and undernourished children.

    Expand NFSA and PMGKAY to include pulses, millets, and fortified foods, not just cereals.

    Steps to break the cycle

    Encourage local community kitchens and anganwadi-based feeding programs. Eg- TN Amma Canteens

    Strengthen Pradhan Mantri Matru Vandana Yojana (PMMVY) to ensure 1000-day nutrition support (pregnancy to age 2)

    Health and Sanitation Reforms

    Expand Ayushman Bharat – Health and Wellness Centres to deliver preventive and curative services.

    Water, Sanitation, and Hygiene (WASH): Accelerate Jal Jeevan Mission for clean drinking water.

    Expand MGNREGA and link with climate-resilient livelihoods (water conservation, afforestation).

    Women Empowerment by adopting best practices like Kerala’s Kudumbshree Model

    Integrated Policy Framework: Ensure coordination across ministries. Gati Shakti Mission Model

    Adopt data-driven local interventions under Aspirational Districts Programme to target high-burden regions.

    Adopt Brazil’s Bolsa Família conditional cash transfer scheme

    This can ensure whole of government and life-cycle approach to realise the vision of Viksit Bharat@2047

  • Inequality in the ownership pattern of resources is one of the major causes of poverty. Discuss in the context of ‘paradox of poverty’.

    The “paradox of poverty” refers to the coexistence of abundant resources and persistent poverty. This paradox arises primarily due to inequality in the ownership and control of resources.

    Paradox of poverty

    Growth with Poverty – India is the 5th largest economy, yet 16.4% population lives in multidimensional poverty (NITI Aayog, 2023).

    Urban Prosperity vs Slums – Cities contribute over 60% of GDP, but 65 million people live in urban slums.

    Link Between Resource Inequality and Poverty

    Land Ownership Inequality

    According to NSSO 77th Round (2019), the top 10% of landowners control over 50% of agricultural land, while landless households form nearly 55% of the rural poor.

    Small and marginal farmers face low productivity, credit exclusion, and income insecurity, perpetuating poverty.

    Capital and Wealth Concentration

    The Oxfam Inequality Report (2024) notes that the top 1% of Indians own over 40% of national wealth, while the bottom 50% own only 3%.

    This leads to unequal access to investment, employment, and enterprise opportunities, reinforcing poverty among asset-poor households.

    Unequal Access to Education and Skills – Poor families cannot invest in quality schooling, health, or digital access, resulting in low productivity and employability. This inequality in knowledge resources leads to income disparity.

    Gender and Social Inequality

    Only 13% of agricultural landholders in India are women (Agriculture Census 2021).

    These groups remain disproportionately poor, illustrating how resource inequality and social hierarchy reinforce each other.

    Regional Disparities

    States rich in natural resources (e.g., Jharkhand, Odisha, Chhattisgarh) also show high poverty and low human development — a clear manifestation of the resource paradox.

    Extraction without equitable sharing of benefits creates “resource curse” poverty.

    Other Causes of Poverty

    Colonial Legacy: deindustrialization of the economy and exploitation of agricultural resources. Eg- India’s GDP share fell from 24.4% in 1700 to 4.2% in 1950

    Jobless Growth: Despite 7%+ GDP growth, unemployment among youth remains 17.3% (PLFS 2022-23).

    Governance and Policy Failures due to high centralization, corruption, and overlapping. Eg- 30% of NREGA payments are delayed beyond the 15-day limit.

    Populism rather than capacity building: Eg: Free Power Scheme in Punjab.

    Polycrisis – multiple crises of slow economic growth, increased fragility, climate risks, and heightened uncertainty have come together at the same time. (WB)

    Way Forward

    Social Determinants Approach: Integrate health with nutrition, sanitation (Swachh Bharat), and clean energy (Ujjwala Yojana). Eg- Gati Shakti Mission Model

    Expand MGNREGA and link with climate-resilient livelihoods (water conservation, afforestation).

    Women Empowerment by adopting best practices like Kerala’s Kudumbshree Model

    Adopt data-driven local interventions under Aspirational Districts Programme to target high-burden regions.

    Adopt Brazil’s Bolsa Família conditional cash transfer scheme

    Land and Asset Redistribution: Promote tenancy rights and women’s joint land ownership.

    Inclusive Financial Access: Strengthen PM Jan Dhan-Aadhaar-Mobile (JAM) and MUDRA loans for micro-entrepreneurs.

    As Amartya Sen observed, poverty is not merely lack of income but lack of capabilities. Bridging resource inequality is key to achieving inclusive growth and social justice (Article 39 (b) & (c)).

    International Relations