Transcription
These are your notes. They are handwritten. I have written them. They are starting from here. GS Foundation 2026 Economy. They are starting from here. Okay? This is our first topic. So, in poverty, we broadly need to understand three things. One is the definition of poverty. One is the measurement of poverty, and the other broad thing is India's progress of poverty reduction. How much progress India has made over the previous few years. Let us start with the definition. Now, this class will run completely in a dialectic format. It is possible I might not turn on the chat, but please think with me. Okay? When do I say that someone is in poverty? What is the definition of poverty? If I think, I will feel that it is when somebody does not have money. Right? This is the first concept that comes to us. My first idea is that there is a lack of money. Right? But this is a very wrong interpretation. Because let's say somebody does not have money. Someone has absolutely no money. But whatever basic necessities of life are, like food, shelter, clothing, a house, maybe transport. Right? If someone donates all these things to them, and does so regularly. Suppose I go and donate to them. Then will we still say they are in poverty? No, because now they have everything they need. Whatever they need, they get. Someone donates it. But they don't have money themselves. So, what will we say? Poverty? We won't say. Now you have to think and tell me, what is the definition of poverty? What do you think? You think about poverty, when will I say someone is in poverty? Look, there is a basic definition: that you lack the basic necessities of life. I don't have the basic necessities of life. So, I would say you are in poverty. The question is, what are the basic necessities of life? What is this? How do you define this? It is very difficult to define this. To bring it to a place where, you know, these are all basic necessities of life. If you have this much, then it's okay. Now, for some, this can include having a watch, having a car also. For some, this can include, yes, just getting two meals a day. So, this is a very difficult thing to define. Right? It will have various things. It will obviously have food, shelter, and clothing. These are things you can buy with money. But it will also mean health. It will also mean education. It might also mean your political voice. We can say that the fact that you get to participate in the country's elections is a basic necessity, that you should have a choice. Who will govern you? Just like in India, we have a choice of who will govern us. So, political participation can also be called a basic necessity. That, yes, the right to vote should at least exist. At least after you turn 18. A sense of security. This is also something which I can say is a basic necessity of life. So, defining something like poverty becomes difficult. Right? So, in such cases, where a direct definition does not come to us. Look, in scarcity, what was it? We could understand. Remember throughout your journey in UPSC. When you come to something like this, where defining it is difficult, we generally go to a definition which is given by an authoritative institution. For example, the World Bank is an authoritative institution. The Indian government is an authoritative institution. So, if we look at the World Bank's definition, this is the definition. This is the point that it is difficult to define. Poverty can be deprivation of multiple dimensions of well-being. There are various dimensions of basic necessities of life. Various dimensions of well-being can be health, can be education, can be your income, can be a clean environment, can be having a good governance structure, can be political voice, can be security, can be social relations. We can also say that if someone is ostracized in society, no one talks to them, they are treated badly. Just like in India, we have had a history of untouchability. Even that can be called poverty because it is a lack of multiple dimensions of well-being. Right? So, let's look at the World Bank's definition. What does the World Bank say? This is the World Bank's definition. The World Bank says poverty is pronounced deprivation in well-being comprising various dimensions. So, the words are important. A question on poverty will come in Mains. These are the words that should go there. Deprivation in well-being comprising various dimensions. For example, inability to acquire basic goods and services necessary for survival with dignity. What is the first thing I am saying? Goods and services that are necessary for survival with dignity. What are goods and services? Like food, like the service of health, service of education. Right? Like clothes, like shelter. These are basic goods and services that you require for survival with dignity. You should have these. If you don't have these, then you fall into poverty. If there are low levels of health and education, you fall into poverty. If there is poor access to clean water and sanitation. You don't have clean water and sanitation. Then you are falling into this definition of poverty. If there is insecurity. You don't have physical security. There is crime. You can be, you know, a victim of a crime at any time. There is insecurity. That is also falling within the definition of poverty. When there is a lack of voice. Lack of voice means that you have a grievance, you have an issue. Today, if we have a grievance, we can tell our government. And they have to listen to us, or they will be voted out in the next election. But if you don't have this voice, even then you will be fitting into this definition of poverty. And there is insufficient capacity and opportunity to improve one's life. Whatever our life is, we all want an improvement in our life ultimately. Why are you giving this exam? You want a better life for yourself and your family. So, if you don't have that capacity and opportunity. These are two important words: capacity and opportunity. You should have the capacity, and there should be an opportunity in front of you. You should have the capacity to study, and the UPSC exam should be in front of you. To improve one's life. If you don't have this, even then you are falling into the definition of poverty. Whenever something like poverty, which is a global problem. Globally, we have a goal that we want to eradicate poverty. Whenever we are defining such global problems, we generally look at overarching broad definitions. We generally look at very broad, big definitions. Why do we look at very big definitions? So that no one is missed. Right? So that we don't say that you are not poor. Right? We want everyone, at least when we write the definition, we will just write it on paper. Ultimately, it is a theoretical concept. As far as we are talking about a theoretical concept, we want to put the most broad definition, so that everyone who finds something missing in life is included in it. This is what we ideally want: that everyone has a way to buy and acquire basic goods and services. Here, "inability to buy" is not written. It's not written "ability to buy." Because it's possible you get it through donation. "Inability to acquire" is written. However you get it. But if you cannot get basic goods and services, then you are poor. If you don't have health and education, then you are poor. If you don't have clean water and sanitation, then you are poor. If you don't have physical security, then you are poor. If you don't have political voice, then you are poor. If you don't have capacity and opportunity, then you are poor. Why are we writing all this? Because these are ideal goals. We want that ideally, everyone in the world has access to these things. Everybody should have these things with them. This is my ideal goal. That is why I have picked such a broad, overarching definition of poverty. Right? So, now if someone asks you, what is poverty? I don't want to hear the word "garibi" (poverty in Hindi). In Varun Sir's orientation session, didn't someone among you say, what does poverty mean? Garibi. It's not garibi. From now on, when somebody asks me about poverty, either I will remember this definition. Well, I won't give you options. We will remember this definition. But at least the meaning should be clear. The meaning here is that it is deprivation of multiple dimensions of well-being. It is not just money. Money is there, but various other things. Health, education, income, clean environment, good governance, political voice, security, social relations. Deprivation of multiple dimensions of well-being is poverty. Okay? Understood? This is our definition. Now I have defined poverty. What is my second task? I have to measure poverty. Only when I measure poverty can I solve the problem of poverty. Now understand. The first question is, why am I measuring? Yes, I have to measure. We do it, right? What percentage of people are poor in India, what percentage are not? Think about it. Why am I measuring? There are two reasons. Okay? One reason for measuring is that I want to identify the people who are poor. So that I can give them benefits. If I can identify that, you know, these people are poor, I will make government schemes for them. I will make government schemes for them. I want to identify who are poor so that I can give them the benefits of government schemes. Right? This is one dimension. Is there any other dimension? This reason is quite clear. Is there any other reason? Think about it once. Take 10 seconds and think. Is there any other reason? One is, I have measured. I know these people are poor. Now I will help them. It is the government's job to eradicate poverty. So, these people are poor. I know. Now I will help them. I will, you know, help them come out of poverty. I will give them jobs. I will give them health, education, sanitation, whatever those deprivations were, I will help them. I will make various schemes. Is there any other reason for measurement? Can you think of it? Tell me. Is there any other reason for measurement? Many people have written the correct answer. Good. Think. I am reading. Good. Many answers are correct. No, look, look. I have to stop one. Sorry, sorry, wait a second. I have to, I have to. Look, in my class, wrong answers are okay. You not knowing is also okay. You can say, "I don't know." Generalistic answers that don't make any sense are not okay. You can say, "Sir, I don't know." I will be the happiest to tell you. You can be wrong. I will be happy because I will know that, you know, this person won't make this mistake again. But what kind of answers do I not want to see? One answer is, I won't take names. Low tax. One answer is, because resources are scarce. This I can say for anything. One answer is, policy decision. Which policy decision? Policy decision would be, you know, who to give the benefit of which government scheme to. That I have already written here. One is, to ensure in the future there should be no poverty. Okay, fine. Ensure in the future that there should be no poverty. So, it would be like this: I will identify the poor, I will give them benefits, I will give them government schemes, they will grow. Someone is saying, food nutrients. Is this a decent answer to give to this question? Right? Let's see more. Many very good, very good answers are also there. One is, allocation of resources. What is happening here? Giving benefits of government schemes to specific people. So, it is allocation of resources. So, look, if I am trying. Look, it is very easy for me. I will write Reason 1, Reason 2 for you. Right? You know, this happens. The government does this here. This is the second reason. The government does this here. And this is called this. This is called that. It happens like this. I know. Right? I will tell you. You will see it written on the board in front of you. You will also feel that you are studying. Right? What will be the problem? You will not learn to think at all. I am making an extra effort. This takes more of my time to stand here. I have to think of various examples. I can just teach you the theory directly. I have to think of various examples to explain, you know, like this. Their minds will open. Then you have to give me a promise. That you will not give such answers. Right? You will take your time and give a decent answer. And look, it's only the first two or three classes. So, I will say this. If I see that such answers are coming, then I will stop asking you, and you won't even know. Okay? Look, I put in my full effort here. I want you to also put in your full effort and speak after thinking. You think, yes, this thing has happened. What else can happen? If you don't know, write it. "I don't know." Or don't write anything. Writing in the chat is not an achievement. It is not your right, nor is it a privilege. It is just for us to communicate. I do this so that you actively think, you remain actively involved. I want to ensure that while you are studying, you are thinking. Think. Now, I will show you some good answers. Somebody said, "To see if development is happening or not." Good. Somebody said, "Data." But somebody said, "Senses." It's not senses, you know. Sense is counting our population. Akshit Agarwal has said, "Statistical reasons." Diksha has said, "For comparative perspective." These are good answers. But somebody has said, "Calorie intake." Somebody has said, "India is a welfare state." So, India is a welfare state, that's why they are doing this. So, I will request you that the answers you write, you write them after thinking. Don't write them, I have no problem. You write "Don't know," I have no problem. You write it wrong, absolutely no problem. Right? But your mistake should also be when. I should see that you have put in effort to think. Can we all agree on this point, man? Can we all agree on this thing? Okay. Thank you, man. Look, the correct answer, which many people gave. And I am very happy that you gave the correct answer. Again, there are no points for giving the correct answer here. There are points for thinking. If you have learned to think, that is important. Look, throughout our entire life, throughout school life, throughout college life, we are not taught like this. We are told. This is it. My job is not to tell you. I am not a teacher. This is not UPSC teaching. It's coaching. I am supposed to be a coach. I am supposed to make you think. Right? Now, let's talk about how to measure poverty. Or rather, why are we measuring poverty? The other reason is to see our national progress. Or to see our development. Or there was a hint, man, we had the answer to this. The hint was right here. Those who were listening carefully got the correct answer. It was written. One is, I want to identify that, you know, these three people are poor. So, I will give them benefits. Another is, I want to see how many were poor 10 years ago? How many were poor 5 years ago? And how many poor are left today? And how many poor will I leave in the next 5 years? That 10 years ago, 20% of people were poor. Now, 5% are left. In the next 5 years, I will bring it down to 1%. This is for measuring national progress. Right? This is for measuring national progress. One objective of mine is this. I want to see if our country is growing. So, are we able to reduce the percentage of poor people? If earlier there was 50% poverty in India, are we able to bring it down to 5% or even less? Another is, identification of the poor. That, you know, what benefits should be given to them? These are the people. They are poor. I should identify them. I should give them benefits. Okay? Now, if you agree to think, let's discuss something a bit intelligent. Now, this is the first intelligent question. I am asking you. Everything I have asked so far has been very easy. Now, can these two measures? Or just think and please give decent answers. If you don't know this time, don't write anything. Write "Don't know." If I have to create two measurement criteria like this, what is the main difference that I should have in my mind when I measure like this and like this? What should be the main difference in my mind? When I am planning to measure for national progress or for beneficiary identification. What is the main difference in my mind? What is the main difference I need to have? What difference should there be in my mind? Tell me. Think and tell me, don't rush. Don't be in a hurry to write quickly. Think, what should be the difference in my mind when I am looking at both? Okay, Parul, that's a good try. Tell me the difference, man, how should I think? It's okay if you don't know. I am here to tell you. Look, I am not asking for the criteria here. I am not asking you what is the different way to measure both. Okay? Understand, it's a bit intelligent. Understand. I hope I am sure you will understand because now you are thinking. My only goal is that you start thinking. Then I will explain. You will always remember. Look, let's say there is this person here. His name is Person X. Okay? This is Person X. Person X is poor. They are poor and they need government help. Now, understand this. When I do this counting, that, you know, I have to identify the poor. In this counting, if I could not count Person X. I am counting them. I must have made some method to count, right? I must have made some system to count, right? That, okay, we will count like this. When I am counting like this, when I am counting for beneficiary identification for government schemes. If this Person X does not get counted. It's a big problem. I have failed right at the beginning, right? If I could not identify that this person should be included in the scheme. No matter how good the scheme is, the benefit will not reach them. They will not benefit. So, in this counting, my main objective is that no poor person should be left out. No poor should be excluded. Do you understand this? When I am measuring for beneficiary identification. Person X should not be left behind, no matter what, otherwise he will not get benefits of government schemes. I will fail, won't I? I will fail. Do you understand? In this case, look, I am just measuring national progress. I am just measuring. Earlier, this percentage of people were poor, now this percentage of people are poor. If Person X is missed in this measurement, does it make any difference to Person X? Here, they were counted. Suppose Person X was counted here. They could not be counted here. If he gets counted here, he will get all the benefits. If he is not counted in this, it's okay. What does it have to do with them? This is our national progress. Maybe my statistics will be off by a percentage or two. That's all, right? They will not be harmed. What is our objective? Should statistics be good, or should people benefit? People should benefit. If statistics go up or down, it's okay. Right? What will happen to the statistics? Let's look at the scenarios. The first case is, the first case is he is counted here, but he is not counted here. Case one is, here he is counted. Here he is not counted. What will happen? He will get all the benefits, but my stats might.
There might be a half percentage point error in my stats, which is fine. We are looking at our own progress. If it goes up or down by one or two percent, it's okay. Look at the opposite scenario. He is not counted here, but he is counted here. Then the stats will look good. But the main job was to help them. Wasn't that the main job of the government? As future bureaucrats, this is your main job. This will be missed. So, when I think, I think like this: "Man, nothing should be missed here." Right? If something is missed here, it's okay. If one or two people are missed here, it's fine. Let's look at another person's example. This is Person V. Person V is very rich. They are quite rich. There is no poverty, no problem. Now let's look at their case. What will happen if Person V is counted here? The government's resources, which were actually for the poor, will go to a rich person. This is a big problem. The government has limited resources. It has limited money. Money will be spent where it shouldn't have been spent. Right? Money will be spent where it shouldn't have been spent, by the government. Suppose the government gives a scheme: "We will give 30 kg of food grains free to the poor." They don't need 30 kg of food grains. And if the government's 30 kg of food grains are wasted, they could have bought them themselves. This will be a problem. If they are measured here, what will happen? There will be a minor statistical problem. That's all. So, this measurement is very important. In this measurement, I care about my errors. Because here, one error means one life being impacted. Here, one error means only one statistic being impacted. Do you understand the difference? It felt good to think about it. Do you understand? Look, Shashank, very good, man. This is what I wanted. If stats affect, then future policy is hampered. What is policy? Government schemes. Where are the beneficiaries of government schemes identified? From here. This is just for looking at progress. Policy is being made here. That's why I specifically wrote "here" for government schemes. Policy is nothing but government schemes. Government schemes are being made here, right? They are being made by looking at this. This is just progress to tell us. This is more of a political measurement. That a government comes and says, "Earlier there were 30% poor. We have made it 20%." Policy is not being made by looking at this. This is just tracking progress to see that yes, we have reached here. We are doing great work, or more work is needed. That's all. Otherwise, it's being made here, right? Now, when I teach you both of these, how this happens and how that happens, you will understand the difference. But at least you are starting to think at a policy level. Right? Now look. Now, in this case, I care a lot about my errors. It's not that here I don't care about errors. If they happen, they happen. But if an error has to happen, let it happen there. Ideally, I would want both to be perfect. But if an error has to happen, let it happen here. Sorry, if an error has to happen, let it happen here. Sorry, if an error has to happen, let it happen here. An error should not happen here. An error should not happen here. If it happens here, it's still tolerable. This error is not tolerable. Do you understand? So my way of measuring will be different. Here I will have a much more elaborate measurement. I will create a very elaborate criterion so that no one is missed. Right? Everything is taken care of. Here I will have a very elaborate criterion. Here I will also have a criterion, but it doesn't need to be that elaborate. Right? If I create a very elaborate criterion, it will cost a lot of money for this measurement. When a lot of money is spent in this measurement. Measuring also has its own costs. You will measure. You will hire someone to survey. Someone will go, ask questions, look at people's status. That is also an expense. That is also expenditure. Here, that expenditure is justified. If I spend in this beneficiary identification, this expenditure is worth it. Because I am saving lives, I am improving lives. Here, it doesn't make sense to spend that much. I should do it, but not that much. Like, not a single mistake should happen. My statistic should not be wrong by even 0.1. If it needs to be, I will spend another 1 crore rupees. Why? Don't do it. A mistake of 0.1 will happen. Although I will try not to make any mistakes anywhere. If it happens here, it's okay. It should not happen here. Okay? Now we have seen two types of errors. Remember both these cases. If I talk about beneficiary identification. If I talk of beneficiary identification, I saw two types of errors. One error was Person X. He was poor, but he was not identified as a beneficiary. The second error was Person Y. He was rich, but he was identified as a beneficiary. Okay. Here, what have I done? I have wrongly excluded someone. A wrong exclusion has happened. Exclusion means not counting, not seeing, leaving out. A list had to be made, and they were left out. I have wrongly excluded somebody, known as exclusion error. Okay? What has happened here? I have wrongly included somebody. They should not have been on the list. I have put them on the list. This is inclusion error. So, exclusion error and inclusion error. Now these are keywords. When you are writing a question, or if I tell you today, if you get a topper's copy, any topper's copy. I can even show you my copy for the mains. When they are writing about poverty or poverty measurement, the point of exclusion and inclusion error is very commonly written by everybody. Now these are keywords. Do you understand the meaning? What is happening? I should remember these words. Now, when I think of poverty measurement, I should think of exclusion and inclusion errors. Both can happen here. Both can happen here. Here too, someone can be mistakenly included. Here too, someone can be mistakenly included. Here too, someone can be mistakenly excluded. Here too, someone can be mistakenly excluded. But in this case, exclusion and inclusion errors need to be minimized. So I will spend more money. I will make an elaborate procedure so that inclusion and exclusion errors do not happen here. If one or two happen here, I will try not to have any, but if one or two happen, I will not spend too much money. It's okay. If the statistic is 5.2 or 5.3, it's not a big deal. The difference between 5 and 10 should not happen. But the difference between 5.2 and 5.3 should not happen. Here, if even one person's error occurs, their life will be ruined. Okay? So, we are doing measurement for two things. Okay? This will come below. It's written. Don't worry. I'm just showing you that it's written in the notes so that you don't have any doubts. We are doing measurement for two things: for national progress and for identifying beneficiaries. Okay? Now, let us now talk about how measurement happens. I said that poverty is deprivation on various dimensions of well-being. Now I need to measure it. So I have defined it. I have defined it. Now I need to measure it. Remember the example given earlier. We will learn both types of measurements. Now, measurement needs to be done. To measure anything, right? The only way to do it is I have to be objective. I have to apply some objective criteria, right? Can I measure someone's sense of security? Do you feel secure or not? Can I measure poverty like this? It's in the definition, I've accepted it. But can I measure it like this? Do you feel you have a political voice? Can I measure it like this? No. I cannot. Because maybe I myself don't feel secure today. So, should I put it in the definition of poverty? Yes, it's there in the definition because that is our ideal. But when it comes to measuring, we have to take an objective criterion. Something that can be proven on paper. Something that is objective, that can be said by looking at it on paper, yes, this is there or not. Like an MCQ. Answer A, Answer B, Answer C, Answer D. It should be objective. So for measurement, I have to pick something objective. Okay? Now, if I look at the definition. There are some objective things in the definition. Okay? One thing in the definition is the inability to acquire basic goods and services. This is one thing. This can be measured objectively. How can it be done? Through the money that you have? Right? Okay? There will be some exceptions. Absolutely. But through money, this still can be objectively measured. If someone has ₹10,000 in their bank account, then yes, they will get basic goods and services. Right? Health. Health can be measured objectively. For example, one way to measure health objectively is life expectancy, what is the expectation of their life. Or it can be measured by what is their access? How far are the hospitals from where they live? What is the distance to the closest hospital and what is the cost of treatment in the closest hospital? People for whom this distance is greater, or for whom this cost is greater, they are poor. Other people are not poor. If I have to measure by health. Measuring education is even easier. In education, I can simply measure qualification. It's objective. If someone has completed a graduate degree, then they are not poor. If someone hasn't even studied up to 12th grade, then they are poor. These things are measurable. So, I will create a broad definition. But when I come to measurement, I want to come to something that is objective, something that is easy to measure. Right? If I have to measure, then I have these three options. You can see they are objective. There will be some flaws in this. Absolutely. Right? But it is still easy to do. It is practical. Do it like this. Now, among these three criteria, right? Which is the broadest criterion? I have seen that all three criteria are objective. I talked about the definition first. I wrote a very broad definition. Then I said I need to measure. For measurement, I need something objective. I need an objective criterion. An objective system. Right? Now these three options came to me. What do you think? What do you think which one should I choose? Tell me. Which one should I choose? Everyone is saying health. Okay, I thought everyone considers money important. Someone is saying all three. Someone is saying education. If I can do only one, only one, pick one. Look, money doesn't solve health. Someone wrote, "Sir, money will solve health." Money doesn't solve health. Money can solve treatment, not health. If health deteriorates once, it's done. And money cannot solve education. You must be seeing this in the world, right? How many people are there who have a lot of money but are never educated? Right? Look, the story here is that I have to look at one of these criteria. No answer here is correct. No answer here is wrong. Right? For measurement, I will first set a standard. Rather, I will first pick a criterion, and for that criterion, I will set a standard. Understand this now. Let's say I picked money. The criterion that I picked. I picked the criterion of money. So I will have to set some standard for it, right? Like, okay, ₹10,000, ₹15,000, ₹5,000. Some standard has to be set. Let's say I say ₹5,000. If I pick life expectancy. Again, I will have to set a standard. Some standard will have to be applied, like, okay, if life expectancy is above 50, then you are not poor. If it's above 70, then you are not poor. If it's above 80, then you are not poor. So let's say if your life expectancy is more than 70 years, then you are not poor. Qualification. Again, some standard will have to be applied. Graduation, 12th class, 10th class. Some standard will have to be put. So these are standards. These are criteria for measurement. I have to pick one criterion. I have to pick one standard. Right? Now, which one you want to pick, this decision is made by some economist. Right? Various economists will have various ideas. We cannot make decisions. We are not economists. We are just studying. Right? Various economists have various ideas. So it is subjective. Right? The choice is subjective. Someone will say, "No, income is more important." Someone will say, "Health is more important." Someone will say, "Education is more important." You pick any criterion. You will have a subjective choice. Various economists will have various opinions. Someone will say this, someone will say that, someone will say this. There will also then be standards. There will be differences among economists here too. Two economists say that yes, we have to pick money. One says it should be 5000, another says it should be 7000. One says it should be 70 years, another says it should be 80 years. One says it should be graduation. Another says it should be 10th class. This is also subjective. Someone will give an opinion. Someone will give an opinion. Standards are also subjective. So both criteria and standards will be subjective. Right? The only thing is they should be applicable. They should be easy to measure. Right? So, for measurement, we have to apply a criterion to someone. The criterion is subjective. Because in the criterion, first we will choose the dimension: what should be measured? Should health be measured, should education be measured, or should money be measured? And then I have to choose a standard. What is right? Is ₹5,000 right? Or is ₹7,000 right? Here we accept subjectivity. We can accept the subjectivity that yes, someone will say this, someone will say that. Everyone has their own opinion. But the application, the actual measurement, let's say we have taken all opinions and decided that okay, we will do it by money, and this is our criterion, our standard is ₹5,000. This has been decided. It was decided subjectively. Many people gave many opinions. Finally, it was decided. It happened. But the application has to be objective. When it ultimately comes to measuring, there should be no mistakes. It has to be done objectively. Do you understand? Now, which dimension should we choose? We can do health. We can do education. Which standard should we choose in that? Life expectancy, hospitals, preventable deaths, anything can be done. So that our measurement is the easiest. So that our measurement is the easiest. We pick the dimension here which is the most quantifiable. The one that is easiest to express in numbers. We pick that. We can pick anything. We choose the most. I will write this word here. We choose the most quantifiable dimension. So that it is easy to put into numbers, so that it is easy to write in numbers. Ultimately, measurement will be done, math will be applied to it. Stats will be put on it. The easiest one to write in numbers among these three, we pick that. Just for our convenience. Because right now, for what are we measuring? Right now, the measurement we are reading, we are reading for national progress. We can make mistakes here. A little up or down is acceptable. There is no difference between 5.2 and 5.3 here. There is a big difference between 5 and 10. We won't let it be 5 and 10. But if it becomes 5.2 and 5.5, it's okay. So I pick the most quantifiable dimension, which I can easily write in quantities or numbers. I will pick that dimension. So I think now you will all agree that out of these three dimensions, money seems to be the most quantifiable dimension. The other good thing about money is that money is also broad. Basic goods and services include many things. Health only measures health, right? Here food will also be measured, shelter will also be measured, clothing will also be measured. Maybe a little bit of health and education too. Many people are spending here too. So money is broad, and it is also quantifiable, easy to put into numbers. That's why we choose the criterion of money. Do you understand? So right now, I understand that I have to measure poverty. Why do I have to measure poverty? Right now, I am measuring for national progress. Even though my definition was very broad, when I have to measure for national progress, I will choose a dimension that is most quantifiable. I will choose a quantifiable dimension, and that quantifiable dimension seems to be money. Let's measure based on money. Now, how do you measure? Let's see. Just a second. First, tell me. Is it clear up to here? Is everyone understanding? Are you enjoying it? Enjoyment is not necessary. Understanding is necessary. But I hope we are going a bit slow intentionally because we are just starting out. I want you to understand this story with me. It's a very interesting story. This is a very interesting story. You will enjoy it a lot. Great. Now, how is money measured? There are three ways. Measuring someone's money. How much money do I have? Are you asking about my income? Are you asking how much money I have spent, or are you asking how much wealth I have? There are three ways to measure. Let's see. One is, let's say my consumption expenditure. A way to measure someone's money is consumption expenditure, the money that I have spent on consuming goods and services. A way to measure someone's money is to ask them, "How much did you spend last week?" From this, you will get an idea of how much money they have. Those who have more money will spend more. Those who have less money will spend less. One is to ask them, "What is your income?" What do you earn in a month or a year? This will tell you how much money they have. Or ask them, "How much wealth do you have?" What will wealth include? Now, let's look at Ambani ji's wealth. His income will be what he earned last year. What will his wealth be? His net worth. What is the value of all the properties he has? What is the value of the shares and stocks he has? What is the value of the buildings he has? What are the values of the watches, suits he has? Wealth is net worth, total worth, assets. This is net worth. So, either I can ask, "Okay, I need to measure a person's poverty." So, either I can measure how much that person has spent in the last week or last month. I can broadly see how much they spend. Or I can see how much they earn. Or I can see how much wealth they have. Now it's time for our next 3-minute break. I will not open the chat for you. For 3 minutes, you have to think. I will leave this screen on the board and take a break for 3 minutes. Think about which criterion I should choose and why. If I choose this criterion, what will be the benefit? If I choose this criterion, what will be the benefit? If I choose this, what will be the benefit? And there is a right answer. Use your brain. There is a right answer here. Subjectivity was there. I accepted it. Here there is a right answer. Think about it. If I choose this, what are its advantages and disadvantages? If I choose this. What are its advantages and disadvantages? If I choose this. What are its advantages and disadvantages? You have 3 minutes. We will continue from here after 3 minutes. The break is for me. Not for you. Okay? Think. All right. Now let's see. Let's start from here. Then we will go up to here. If I try to measure wealth. Wealth will include stocks, property too.
No? Major, I am doing it for poverty. Remember this. I am measuring for poverty. Right? Wealth will include stocks, property will also be included. And if you ask someone, suppose Ganesh Saraswat has messaged. If I ask Ganesh Sir, Sir, what is your wealth? Will you tell me? If I ask Suhani Singh Ma'am, who has messaged here. If I ask Suhani Ma'am, Ma'am, what is your wealth? Tell me, what is the family's wealth? How big is the stock portfolio? Will you tell me? You won't tell. There are two problems with wealth. One problem is, it will fluctuate. Today the value of my stock is ₹100. Today Reliance's share is ₹1500. Tomorrow if it becomes ₹3000, my wealth will increase. Tomorrow if it becomes ₹500, my wealth will decrease. Wealth keeps fluctuating. Right? Wealth is not constant. Wealth keeps changing. Second, ultimately, you have to ask people, right? You have to conduct a survey. You have to go ask. If I start asking people, no one will tell. There will be inaccurate reporting. So wealth is not a good criterion. Especially since I am measuring for poverty.
Second, income. There is the same problem of inaccuracy in income. In India, only 4% of people pay income tax. Anyone whose income is above 12 lakhs has to pay income tax. How many people pay income tax? Only 4%. In India, far more than 4% of people have an income above 12 lakhs. When we cannot measure income even for tax purposes, how will we measure it here? If you ask people, how much do you earn, man? What is your salary? Who will tell you? There is inaccuracy, there are measurement problems. If someone knowingly tells less. So will you include them? Generally, if you ask someone about their income. There are two types of people. One who exaggerates a lot, and one who understates a lot. No one tells the accurate figure. So here too, there is a problem of inaccuracy. But if I ask Suhani Ma'am or Ganesh Sir, how much did you spend last week? You will be able to tell this. At least you will tell more accurately than those two. Here, the chance of you lying is very less. Still, you can lie. That is your choice. But here, the accuracy of measurement will be the highest. Firstly, this is an accurate criterion. Secondly, why am I measuring money? Why did I choose to take money? Money is not what I wanted to measure. I wanted to measure something else in the definition. Ability to acquire basic goods and services. Ability to acquire basic goods and services. If there is any person, no matter how low or high their income, you will spend on basic goods, won't you? You will buy food, won't you? You will pay for shelter, you will pay rent, or somehow, right? You will buy clothes, won't you? Ability to acquire best. Here it doesn't seem like it's being measured by how much was spent. If there is an ability to acquire, it's not like I have the ability to acquire food but I don't acquire food. I feel like starving, or I feel like not buying clothes. I can buy them, I don't feel like it. That won't happen. Consumption expenditure is easy to measure, easy to report. And it aligns very well with the dimension I am trying to measure. Consumption expenditure aligns very closely with what I am trying to measure. Therefore, this is the criterion I picked. Consumption expenditure, because it is accurate, and it is closest to the dimension, the definition. Especially for the poor section of the population that I want to measure. They might not have any stable income. They might get work sometimes and not others. I am going to talk to those with a monthly salary. Somebody who is getting a monthly salary is not going to be poor. Right? Someone who is getting, say, ₹120,000 per month. That person is not poor in India. Right? So it's possible that the people I actually want to know in this measurement may not have any stable income. And the chances of them having wealth are very low. If they have durable assets, if they have property, shares, stocks, then they are definitely not poor. So even in terms of the target group, this is the most aligning criterion. So this is the criterion I picked. I picked consumption expenditure. So when I am measuring money, I have three options. I can measure wealth. Wealth is volatile. Volatile means it can fluctuate, and there is incorrect reporting. Same with income. Income also has incorrect reporting, and it is not right for my target group. Right? Consumption expenditure is a stable criterion. Generally, our month-on-month consumption expenditure remains similar. Right? It's not like in the month of January I will spend ₹0 on food, on shelter, on clothing, and in May only ₹2000. There will be only a slight difference. Largely, over time, this is stable. Its reporting will be better. If you ask someone, this is the most likely thing they will tell. And lastly, it aligns the most with the target group. So now I have decided. My job was to measure poverty for national progress. I wanted to measure the ability to acquire basic goods and services. For that, I picked a quantifiable dimension of money. Among that, there were three options. I picked consumption expenditure. Is the point understood so far? I picked consumption expenditure. Expenditure can be through loans also. Look, this is why I say it's good that you are thinking. Think a little bit more. Harshit is saying expenditure can be through loans also. Which poor person is taking loans and getting loans? Which poor person are banks giving loans to? Think. Think if you are taking a loan for your food expenditure. And if I go and ask them, how much did you spend last month? They will say, yes, I spent ₹100. They will not tell me that it's a loan. I don't have any money of my own. I have not spent my money by myself. Right? And no, Raj, I don't have to see a proportion of all three. This is the best criterion for this job. Okay? For this job, this is the best criterion. Now, what are we doing? I will write on the board. What are we doing? But I am glad that the majority of the class has understood. Actually, 90% have understood. That's great. I want to see how many people are under this criterion. I want to see how many people are falling into this criterion. For this, I have chosen money. I will measure this, and how will I measure it? Through consumption expenditure. Now, look, look, understand now. Please listen with maximum attention for the next 30 minutes. I will turn off the chat. Listen carefully. Now, this part is important to understand. It is very important. Many questions have come on this in Prelims and Mains. This year too, it is very likely to come in Mains. Okay? Listen carefully. Now, everything will connect for you too. If I want to see this thing, I will have to define what basic goods and services are, won't I? I will have to define what basic goods and services are. Only then will it make sense. So what do I want to do? Listen, then I will explain it by writing on the board. First, I am giving an overview. I will say, these are 10 things that are called basic goods and services. These are 10 things that I call basic goods and services. I have said this, okay? This includes food, 20 kg wheat, 10 kg rice. This includes clothing, two pairs of trousers, four pairs of shirts. This includes shelter, any house which is pucca in nature. This includes transport, etc., etc. First, I will say, what are basic goods and services? I will make a list of it. Okay? Then I will see that, okay, I have written these 10 things in this list. Okay? It is subjective according to me. It can be different according to you. But according to an economist, nobody cares about us, right? About economists. An economist has said that basic goods and services are these. These are basic goods and services. A list was made here. This list, in economics, the word we use for such a list is a basket. So I have made a basket of items which I say are basic goods and services. Okay? Then I see what is its price. Let's say in this list I have written things like 10 kg wheat, 5 kg rice, two shirts. I have made a lot of such lists. What is the price of this entire list? If I go to the market today to buy this list, how much money will it cost? Because these are the basic goods and services that everyone, everyone should have. So what will I say? This is a list of basic goods and services. I have written a list. Its price, let's say, comes to ₹10,000 in the market. So now what do I know? That to acquire basic goods and services, you have to spend ₹10,000. Okay? Is this understood? Now, these are very basic things. I will write very basic things, like, you will definitely buy wheat, you will buy rice, you will buy some vegetables, fruits, you will buy food, won't you? You will buy clothes, won't you? So I have written very basic things and seen that if I go and buy them in the market, the cost of these things comes to ₹10,000. Then I will see how much is everyone's consumption expenditure. If you are getting confused by the figure of ₹10,000, then to give you a real example, let's say I write ₹1000 per month here. ₹1000 in a month. You have to spend this much to get all the basic items. Okay? Now maybe you can relate. I have written absolutely basic, bare minimum items, like, this is basic for a good life. You have to spend ₹1000 per month for this. Now I will go to people and ask, man, how much did you spend last month? Someone will say, last month I spent ₹2000. Someone will say five, someone will say ten. Let's say someone says, sir, I spent only ₹500 last month. In the whole month, I spent ₹500. Then I will say, yes, this person should fall in the definition of poverty. Understood? I will make a list. What is the list called in economics? Basket. I will make a basket of items of basic goods and services. I will check the price of the items in the market. The price of the items in the market is ₹1000. So in one month, this is the basic goods and services I need. If I go to buy in the market, it costs ₹1000. Then I will go and ask people, how much did you spend last month? Whoever says they spent less than ₹1000. Because a thousand is a very small number. Right? This is a number that everyone is spending anyway. If someone says, sir, I spent only ₹500. That means there is some problem. Then I will count them in poverty. Understood? Understood? Good. This is my methodology of poverty measurement. Now you must have heard a term. You have heard this term, poverty line. Above poverty line, below poverty line. Heard it, right? This is nothing but I have just explained India's poverty line to you. This is nothing but our poverty line. Now, see, what is the poverty line and how does it happen? Now remember this process. For 1 minute, look at it again. Look at it again, because confusion is likely here. So look at it again. Now I will explain India's poverty line, how the poverty line is used. What does poverty line mean? And then I will see what the poverty line actually is. Let's understand. Understood this? Look, I have constructed a basket of items. And now I will not say list repeatedly. Now I will only say basket. I have constructed a basket of items which have basic goods and services. Okay? This basket has some wheat, some rice, some clothes, etc. I have found its price. The price came out to be ₹1000 per month. Okay? This basket, this basket of items. Now, different economists will recommend different things in this. Someone will say, put 5 kg wheat. Someone will say, no, put 10 kg wheat. Someone will say, put 5 kg rice. Someone will say, no, also put vegetables and fruits. Someone will say, also put transportation. Someone will say, no, they will walk for transportation, what is the need to put it? Different economists will give different opinions, right? This basket, or this list, basket of items, is known as the poverty line basket. And why is it called the poverty line basket? You will understand now. Poverty line basket. The price of this poverty line basket, this price written here. For example, this is an example. Don't take this as a real figure. This is known as the poverty line. This is known as the poverty line. This is known as the poverty line basket. This is known as the poverty line. Now, this is just one side. This is just deciding. So far, I have only seen this part. This part I have seen. There is also, I have just seen this part right now. I have seen this. Now I have to see this part. Asking people about their consumption expenditure. Now I will look at this. Let's see this. I went to, let's say, I went to 100 people. I went to 100 people. Obviously, I will ask many more than 100 people. I am telling you for example. I went to, let's say, 10,000 people and asked them, sir, what was your consumption expenditure? Okay? Someone will say, I spent ₹10,000 last month. Someone very rich. Will say, I spent ₹1 lakh. Spent ₹1 lakh. Someone will say, I spent ₹5,000. Someone will say, sir, I only spent ₹500. Right? So what will I do? I will write them down somewhere like this. I will write on a page like this, and I will write in descending order. So number one will be the one who spent the most. Someone will say 3 lakhs. Someone will say 2 lakhs, like this, a whole list of 1 lakh people, I will write them in order, 1 to 1 lakh, and next to it, I will write how much they spent. So someone will say ₹1 lakh, ₹2 lakh, ₹2 lakh, ₹1.8 lakh, at the bottom someone will say ₹200, ₹300, like this. And here I have the numbers, written from 1 to 1 lakh. You can consider it an Excel sheet. It's an Excel sheet. Name, here, number, name, and expenditure written. Now, going up here. Somewhere here it will be ₹900. Somewhere here it will be ₹1100. It will be up and down like this. The whole list will be made like this. From here to here. Now, this poverty line that I calculated, I will put it here like this. I will draw a line like this. What was my poverty line? ₹1000. I had calculated it as the poverty line. In this list of consumption expenditure, what is this? What is this white thing? This is a list of consumption expenditure. Or I can say it is a survey of consumption expenditure. I went and asked people, right? It's a survey. I drew a line over the survey of consumption expenditure. Which line is this? This is my poverty line. All the people whose names are written below this line, I will call them below poverty line. All the people whose names are written above this line, above poverty line. Understood? I drew a line. Below this, below poverty line. Above this, above poverty line. Understood? Now, see, just repeating the process once. The topic is finished here. I think for you too, maybe for the first time, you have understood what is a poverty line. I hope at least now you can see it. So I wanted to measure the ability to acquire basic goods and services. What are basic goods and services? I made a basket of it. I looked at the price of that basket. I saw that if I want to buy this basket in the market, it will cost ₹1000 for the whole month's basket. I called this basket, the poverty line basket. And this price that came out, I called it the poverty line. Okay? Then I went and asked people, what is your consumption expenditure? I did a survey of consumption expenditure. I wrote down the names of all the people who responded. Let's say I have to measure among 1 lakh people. I wrote from 1 to 1 lakh. Wrote from 1 to 1 lakh. Wrote down all the names and their consumption expenditure. In descending order, the highest at the top, the lowest at the bottom. Okay? Then I drew a line. That line is my poverty line. Those whose names came below this line, what does it mean? That they spent less than ₹1000 per month. They became below poverty line. They became above poverty line. Let's say the number of people below poverty line here was 20,000. The number of people above poverty line here, the names of 8,000 people were written above this line, and the names of 20,000 people were written below this line. Okay? Now, what will I say? There are 20,000 poor people in a population of 1 lakh people. If I line up 1 lakh people, I can do a headcount and say that these 20,000, I can count them, headcount. We used to do headcount in school. I can do a headcount and say, based on this line, that 20,000 people are poor out of 1 lakh people. So I will say my poverty ratio or my poverty rate is 20,000 out of 1 lakh, or simply 20%. 20% of people in my country could not buy the basket of basic goods and services in one month. This is how poverty is measured in India. Please say that you have understood. Clear? Did you learn something new? Someone is saying, I understood a lot. No, don't understand too much. Understand as much as you need to. Okay? Again, look, I know there will be some people who cannot understand. But see, the fact is that I have to teach at a certain pace. I see the chat. I see the chat and I see what is the number of people who understand. If I see that more than 90% of the people are saying yes, I move forward. If you didn't understand, you can just watch it again. The recording is available to you. That's why we haven't put any limits on recordings. Watch as many times as you want. Okay? Now, this is how poverty is measured in India. Okay? Now, look, all of this that was there is written here. I take a set of households and measure their consumption expenditure. Here I did it for people. Here I was doing it for people. I can also look at the whole household. Instead of asking you, sir, how much did you spend last month? How much did your whole household spend last month? So I can do it on a household basis too. I can do it on a person basis too. We will see that later. The broad idea should be clear. So far, I have looked at a set of households and their consumption expenditure. I drew a line. Those who came below this line are below the poverty line. Those who came above this line are above the poverty line. How did I draw the line? I defined a poverty line basket. I defined a set of goods and services needed for basic living. Then I found out its price. What was the price? ₹1000 per month. Then I made it the poverty line. If you are spending more than this in a month, you are above the poverty line. You are spending less than this in a month, you are below the poverty line. Okay? Now, understand one more thing here. What is the main problem with this method? If we use this method, suppose, suppose, let's refine the question a bit. The method is understood. I will write a new question, then I will show you the method again. If I use
This method to identify beneficiaries, I use this method to see who should receive the benefits of the government scheme? Who should not receive the benefits of the government scheme? So what problem will arise? What will be the major problem? We saw that measurement happens for two reasons. One reason for measurement is that we have to do it for national progress. How much progress has India made. One is for beneficiary identification. Now I am telling you, this method was for national progress. This was a method for national progress. This was the method. But if I use this method, this method, for beneficiary identification, then what problem will arise? Think and tell me, what problem will arise? If I use this to know the beneficiaries, then oh, very very very good, very good, got the answer, got it, got it, got the answer so quickly, I will take his name, Deepak, great, man, look, there are many problems. But there is one very major problem. You are saying inclusion-exclusion error can happen. Suppose I have done a perfectly accurate measurement. Even then, there is a problem in this. And Deepak has given the absolutely correct answer for this. According to this criterion, a person who is spending ₹10,001, a person who is spending ₹11, he is not poor. According to this criterion, if someone spends ₹11, then he is not poor. A person who is spending ₹999, ₹9 in a month, he is poor, right? The one spending ₹999 is poor. So, to give a hint, 900 and 1100 were written here. The hint is always on the board. Because I know what I am going to ask. If I see 1001, this person is not poor. If I see 999, this person is very poor. For the one spending ₹999, I will say, sir, government benefits are for you, here, take free food grains, take free ration, right? For the one spending ₹999, I will say, take free food grains, take free ration, enjoy. You are not enjoying, but okay, take the benefits. For the one spending ₹1001, I will say, no sir, you have spent ₹2 too much. This will be completely wrong, right? That is why I don't use this method for beneficiary identification. The method for beneficiaries is different. I don't use this method for beneficiaries. I use this method for national progress. In that, a little bit up or down is acceptable. In that, one more person is counted. What will happen in this case? I will do national identification. I will do national progress. 5.2% or 5.3% or 5.1%. That's the only difference. Let it happen. It's not affecting the person, right? Here, this person will be deprived of legitimate benefits. Their benefits will be lost. It is possible that they might not be able to live a good life, and I cannot accept that an Indian citizen cannot live a good life. I can accept that India's statistics are off by 1%. That is why I use this method. Only for the measurement of national progress. Okay? So, what did I say here? What have I done? Let's look at this again. What have I made? A survey of consumption expenditure. I have written names. I have written numbers. Here, consumption expenditure is written. Someone's is ₹1 lakh, and coming down like this, someone's is ₹100. I have drawn a line. I have called that line the poverty line. How was this line calculated? It was calculated based on a basket of items. Okay? This line was calculated on the basis of a basket of items. Okay? The people below this line, I have called them, these are below poverty line people. Okay? And then I counted them. I counted how many people are here. 1, 2, 3, 4, 5, 6, 7, 8. There are this many people here. So, I did a count. So, I counted that this many people were poor, so they are BPL, and the matter is closed. Okay? This count, this count is called headcount. Or headcount ratio. What was I doing at the end? I did this counting. By doing this counting, I found out that there are 20,000 people who are below the poverty line. What is the total number of people? 1 lakh people. So, what percentage of people are poor? What is the ratio of poverty? What is the number of people that were poor? Out of a total population of 1 lakh, 20,000 are poor. So, out of a population of 1 lakh, 20,000 are poor. So, 20% are poor. I did this. This ratio is called the headcount ratio. It's a question that has been asked in Prelims. This question has been asked in Prelims before. Headcount ratio. What is this ratio called? Headcount ratio. But now understand one more thing. There is one person here who has spent ₹999. One person has spent ₹999, he is just, just there. One person has spent ₹100 in a month. One is ₹999, one is ₹100. I have measured right now how many are poor. How many are poor? 20,000 are poor. But have I measured how poor are the poor? How many people are poor? 20,000 people are poor. 20,000 people are living in poverty. But among the people living in poverty, who is more severely poor? Who is very poor? Who is just poor? Have I measured this? No. I have only measured how many are poor. I have not measured intensity. Or I have not measured severity. How severe is the problem of poverty? How severe is the problem? This is a very severe problem. This is not that severe a problem. If I make this person spend ₹2 more, this person will be out of the poverty line. This person will have to spend ₹91 more to get out of the poverty line. I have not measured severity. I have only counted the number, that okay, all these people, stand in a line. I am doing your headcount. So, when I measure poverty, I measure two things. One is headcount ratio, where I see how many are poor. I know my answer. My answer is 20,000 people. What about depth of poverty? Who is more deeply in poverty? Who is just close to the poverty line? Who is very much in poverty? Who is just near the poverty line? So, how poor are the poor? How poor are the poor? This I have not measured yet. Understood the meaning of these two words? Here, I have just measured how many are poor, not how poor are the poor. Whenever I look at how poor are the poor, when I look at severity, then here, I will count the family separately, and here, I will count the family separately. Understood? Oh, wait. The cost of the basket of goods is not the same. Wait for now. The basket has not been made yet. Wait. Okay, good, very good. Someone said, somebody would lie. Good, good question. But that means, but that means you are not listening clearly. If I lie, I would lie to become above the poverty line, or I would lie to become below, below the poverty line. In both cases, what benefit am I getting? Am I getting any benefits of government schemes on the basis of this? No. What am I getting by lying? That I lied. India's poverty ratio was supposed to be 5.298%. I lied. It will become 5.297%. Great. Why would I lie? Am I getting anything by lying? Am I getting the benefits of schemes by lying? Since I am not getting the benefits of schemes, what is the point of lying? So, what do we do? Now we want to see. Now we want to see. We have seen this. We have seen the idea of headcount ratio. How many are poor. Okay? Now we want to see the depth of poverty. How poor are the poor? Okay? For this, we look at a concept. Poverty gap. Let's understand. This is my poverty line. My poverty line is how much? ₹1000 per month. Okay? My poverty line is ₹1000 per month. Now I am talking about below this. Now I am only looking at this group. I am only looking at this group now. Only looking at this group. Okay? I am not concerned about those above. Now I have seen how many are poor. Now, in this, in this group, how poor are the poor? In this group, how poor are the poor? This I want to see. This happened. There is one person here who is spending ₹0 per month. One person here who is spending ₹600 per month. One person who is spending ₹100 per month. I want to calculate their poverty gap. Right? Just give, sorry, man. Just give me one second. There is some noise coming from outside. In one second, I will just take a break for 2 minutes. I am just coming. Sorry, man. Sorry about that. So, what was I telling you? This is my poverty line. I need to look at the people below it. Okay? I want to calculate the poverty gap. Right? So, what is this person's poverty gap? What is this person's gap to the poverty line? This person's gap to the poverty line is ₹100. This person's gap to the poverty line is ₹400. This person's gap to the poverty line is ₹900. Okay? This is the meaning of poverty gap. Now, how do I use this information? I have calculated this: 100, 400, 900. How do I use it? How do I use it? To understand this, let's understand this. There are two countries. Two countries. Country A and Country B. There are two countries, Country A and Country B. Country A has its poverty line. Below this poverty line, Country A has three people below the poverty line. Country B also has three people below the poverty line. Now I have to tell which country's situation is better. Which country is in a better situation? Because if I look at the headcount ratio, the number of poor, then it is the same in both. So, can I say those two countries are equal? No, I will have to look at further data. A and B, two countries, both have three people under the poverty line. Okay? Here also three, here also three. Now I have to check which of these is better. In the case of Country A, both have the same poverty line. The same poverty line that we saw just now. Both have a poverty line of ₹1000. In the case of Country A, in the case of Country A, the three people are: one is at 900, one is at 800, one is at 100. So, what is Country A's poverty gap? How much is the gap here? 100. How much is the gap here? 200. How much is the gap here? 900. If I look at the overall poverty gap. So, poverty gap is ₹100 here, ₹200 here, ₹900 here. What is the total poverty gap? 100 + 200 + ₹900 = 1200 is the total poverty gap. I will divide this by the number of poor. Three people were poor, so I will divide by three. So, average poverty gap, average poverty gap is ₹400 in this country. On average, three people are poor, and on average, they are ₹400 away from the poverty line. Okay? Three people are poor, but on average, they are ₹400 away from the poverty line. Let's look at Country B. In the case of Country B, again, there are three people that are poor. All three people are at ₹500 per month. 500, 500, 500. What will be their gaps? Here also ₹500, here also a gap of ₹500. And here also a gap of ₹500. In this case, what will be the average poverty gap? 500 + 500 + 500. The total will be 1500, and divided by 3, so 500. So, Country A has three people. Country A has three people under the poverty line. Three people are here who are below the poverty line. And these three people, on average, are ₹400 away from the poverty line. How did I calculate the average? I added the gap of all three and divided by three. Country B has three people. On average, they are ₹500 away from the poverty line. Which country is better? A is better? A is only ₹400 away from the poverty line. If we look at the headcount ratio in both, three are poor. Here also, three are poor. So, in headcount, it is the same. But what is the difference? The difference is the poverty gap. Here, the average poverty gap is ₹400. Here, the average poverty gap is ₹500. Okay? Is the concept of poverty gap clear? How am I calculating poverty gap? Is the concept of poverty gap clear? How am I calculating it? I am checking how poor are the poor. From this, I will understand, right? How poor are the poor. Right? Suppose there was a country here, there would also be a Country C, and in Country C, there would be only three poor people. But all three are spending only ₹100 per month. So, what would be the poverty gap here? For all three people, it would be ₹900. So, 900 + 900 + 900 / 3 would finally come as 900 only. The average poverty gap would come as 900. So, this country would be worse. In this, everyone will have to spend ₹900 more. In this, on average, ₹400 will have to be spent. In this, on average, ₹500 will have to be spent. Headcount ratio for all three countries, meaning how poor are the poor? Sorry, headcount ratio, meaning how many are poor? How many? This question is the same for all three. Three each. But the intensity of poverty. How poor are the poor? How far are the poor from the poverty line? In Country A, that answer is 400. In Country B, that answer is 500. And in Country C, that answer is 900. Okay? So, today we have read many new concepts. Okay? I am not explaining any more concepts to you after this. I am not explaining any more concepts to you. Let's do a revision. Of everything that we have read so far. Now, to do questions, we are still far from the point where we can do questions because we have just started. I hope you are enjoying it so far. And I think for the first time, when I first read this in my UPSC preparation, I understood the meaning of poverty line for the first time. Because earlier, I used to think that poverty line means, you know, those people who earn less money. They earn less than a certain level, they are below the poverty line. Those who earn above a certain level are above the poverty line. But actually, it is not like that. It is consumption expenditure based. It is how much money someone spends. Not how much money someone earns. And we understood why we looked at expenditure. So, in today's class, now we will do a revision session. We will do a small revision session, and we will continue tomorrow. We have just read about poverty gap. There is another concept called squared poverty gap. So, I will tell you in advance what we need to do tomorrow. Tomorrow, first, we will read the concept of squared poverty gap. If there was a poverty gap, why did squared poverty gap come? We will see this. Then, I have said just now that yes, let's construct a basket. Let's look at the price of this basket. How was that poverty line basket actually constructed in India? What were the prices? What did which economist say? And whom do we follow today. So, we will also see this idea that how this basket is actually constructed based on various committee recommendations. What recommendations have various committees given, and based on that, how is this basket actually getting constructed? Okay? We will see this. Lastly, tomorrow we will see one more thing. Right now, we are looking at the measurement of poverty for national progress. Tomorrow, we will also understand, if we reach this point, measurement of poverty for beneficiary identification. This is very much in the news. You must have heard something called Socio-Economic Caste Census. This is nothing but Socio-Economic Caste Census. Tomorrow, we will also see this. This is also in the news. And tomorrow, if we can complete this part. This is a slightly big topic. When we complete this part, I will show you a magic. Right? This is what I do in my economics classes. I feel this is a subject that opens up the mind. So, what will we do? When we finish this part, we will look at a PIB article, and I will show you how well we understand current affairs when we know the background. So, I will show you an article in PIB. Okay? I will show you an article from PIB, from which we will relate all these things. Actual government statistics, what the honorable Prime Minister has said, we will see all this here. Okay? We will do this work tomorrow. Most likely, we will complete this part. We will see as much as possible in the class. Otherwise, we will do it the day after. On Friday. Okay? Now, let's revise whatever we did today. Look, now I will show you how I expect you to revise. I will tell you how I expect you to revise. Okay? I will do this for you. You also do this as soon as this class ends. Okay? Generally, our class runs until 7:30. Today, since there are no questions, we are able to do this. Otherwise, as soon as it is 7:00, we will stop at that topic and start questions. After two-three days, we will have done enough that questions will come. Then we will do MCQs daily together. Okay? Look, if someone tells me now to revise today's class, what will I do? I will remember where I started reading today. First, I was trying to understand basic terms. Some basic terms. What have I revised today? Or what have I read today? I have read about sustainability. I have read about growth. I have read about development. I have read about choice from choice. I have read about opportunity cost, and I have read about the emergence of various disciplines like polity, society, coming from the same question. Okay? I saw this. Then I started with the topic of poverty. When I started with the topic of poverty, my first question was, how do you define poverty? In my definition of poverty, I saw that it is not merely one dimension. Like poverty or hunger, etc., are not just one dimension. It is a proper definition that is deprivation of multiple dimensions of well-being. So, there were many definitions. There were many dimensions of well-being. Like security, lack of voice, inability to acquire basic goods. All these things were in my definition. In my definition, I also looked at the official definition of the World Bank, which was pronounced deprivation on various indicators of well-being. Among which one was inability to acquire basic goods and services. I also understood that when there is a broad concept like poverty, we generally pick a broad definition. We pick a broad definition because it helps us put our ideal goals on paper. But after we define poverty, our next job is to measure poverty. Now, first, I understood why do we measure. We would want to measure poverty for two reasons. One is for national progress. One is for beneficiary identification. When I am measuring for beneficiary identification, my procedure must be elaborate because here I cannot afford to have errors, because on this basis, I will make my policy. On this basis, I will give benefits of schemes. But when I am measuring for national progress, here also I will try that there are not enough errors, but I don't want to make a very elaborate criterion, since this is actually just a statistical exercise. This is not a policy-making exercise. Okay? Now, after why, logically, you will understand how logically we have studied. After why, my question came, how do I measure? In how do I measure, I first had to see which dimension to choose. So, which dimension to choose? I said, let's choose a dimension that is quantifiable. That can actually be put on paper. Any can be picked. But I decided to pick one for my convenience. I decided to pick a dimension that is quantifiable, which has numbers. So, it can be put on paper. So, I put the dimension of inability to acquire basic goods and services. How will I see this? I will see this through money. Again, very quantifiable, easy to put on paper. Right? How do I measure money? Consumption expenditure, wealth, and income. Among these three, I selected consumption expenditure because it was stable and it was possible to have accurate reporting, and it aligns with my target group. Okay? I have selected consumption expenditure, but now what? Consumption expenditure has been selected. Now what? Now I will say that what are basic goods and services. I will make a list of them, or rather, I will make a basket of items. Some economist must have made this. After making a basket of items, I will call this the poverty line basket. Then I will check the price. I will check the price of this. I will check the price of this. When I check the price of this, that price I will call the poverty line. I will take people's consumption expenditure and I will tabulate my survey results. So, in a consumption expenditure survey, what will I do? I will write everyone's name and write their consumption expenditure in descending order. Let's say 1 lakh at the top, 1000 or 100 at the bottom. Like this, I will write everyone's consumption expenditure. On this consumption expenditure table, I will draw a line. This line is nothing but this same poverty line. The people below this poverty line, that I will call below poverty line. The people above, that I will call above poverty line. When I get below and above poverty line, then what about below poverty line people? First, I will measure how many are there. This I will call headcount ratio. Headcount ratio. These are the numbers of people who are below the poverty line. By counting their heads, I will tell the headcount ratio. Second, second, second, I will try and understand how poor are the poor. For this, I want to see the severity of poverty. For this, I have just seen one thing, poverty gap. But I know there is one more thing coming, which is squared poverty gap. This is how I want you to revise. Now, according to my watch, I started this at 7:09. It is 7:15. How much time did it take? 6 minutes. Giving these handwritten notes, thinking about each thing with you, giving you thinking time, this increases my teaching time. But it increases it so that you can do this work very quickly. Now, if you have listened without a lapse of concentration, I have told you, one momentary lapse of concentration and the class is dead. You will forget, then you won't understand because it is a technical subject. This is from one of the least technical areas we have started. Okay? Still, still, if I have listened to this class with full concentration, I can revise the entire class in six to seven minutes. The class is over. It is 7:16 now. Before 7:45, you start this work. Take a half-hour break. You have also been sitting for a long time. Take a half-hour break. Okay? Relax a bit. During this break, don't watch TV, don't watch Netflix. Go for a walk, close your eyes. And spend half an hour and revise all of this. Revise it by writing. You will never forget it. If you leave it for tomorrow, it will take 2 hours. If you leave it for the day after, you will feel like I don't know this at all. Maybe Shivam sir didn't teach anything. Okay? So, I hope you had a good class today. I hope you guys understood something new, something different. Something that all Indians know, that there is a poverty line, you understood its basics today. I hope you understood, and I hope you enjoyed it. I will now see you tomorrow at 4:30, and we will continue with these topics. Squared poverty gap, basket of poverty line, or various committee recommendations, and the final actual measurement of India on the basis of national progress. Okay? See you guys tomorrow. Have a good day. Bye-bye.