Inflation, Poverty, Unemployment and Human Development
Inflation, Poverty, Unemployment and Human Development
These are the "health indicators" of an economy. NTPC asks the types of inflation and how it is measured, the committees and indices used for poverty, the kinds of unemployment, and the Human Development Index and who publishes it.
1. Inflation
| Item | Facts |
|---|---|
| Inflation | A sustained rise in the general price level |
| Deflation | A fall in the general price level |
| Stagflation | Inflation with stagnant growth and high unemployment |
| Demand-pull | Too much money chasing too few goods |
| Cost-push | Rising costs of production (wages, oil) |
| Measures | CPI (consumer prices, used for the inflation target; new base 2024) and WPI (wholesale prices, published by the Office of the Economic Adviser, DPIIT; new base 2022-23 from June 2026) |
| Inflation target | 4% CPI inflation with a band of ±2%, set by the Government under the RBI Act; retained for April 2026 to March 2031 |
2. Poverty
| Item | Facts |
|---|---|
| Poverty line | Based on consumption expenditure |
| Committees | Lakdawala (1993), Tendulkar (2009), Rangarajan (2014) |
| Multidimensional Poverty Index (MPI) | Used by NITI Aayog; covers health, education and standard of living (based on the UNDP-OPHI global MPI) |
3. Unemployment
| Type | Meaning |
|---|---|
| Disguised | More people working than needed; marginal productivity zero (common in agriculture) |
| Seasonal | Jobless in off-seasons |
| Structural | Mismatch between skills and jobs |
| Frictional | Between two jobs |
| Survey | Periodic Labour Force Survey (PLFS) by NSO |
4. Human Development Index
| Item | Facts |
|---|---|
| Publisher | UNDP, in the Human Development Report (first in 1990) |
| Developed by | Mahbub ul Haq, with Amartya Sen |
| Dimensions | Long and healthy life, knowledge (education) and a decent standard of living (income) |
✗ India's inflation target is based on WPI | ✓ It is based on CPI (4% ± 2%)
✗ Disguised unemployment is common in IT services | ✓ It is typical of agriculture, where extra hands add nothing to output
हिंदी नोट: महँगाई का लक्ष्य उपभोक्ता मूल्य सूचकांक (CPI) पर 4% ± 2% है। नीति आयोग गरीबी के लिए बहुआयामी गरीबी सूचकांक (MPI) का उपयोग करता है; तेंदुलकर समिति ने उपभोग व्यय से गरीबी मापी। छिपी बेरोज़गारी कृषि में आम है। मानव विकास सूचकांक UNDP प्रकाशित करता है।
Exam Pointer: Verified NTPC patterns: the index NITI Aayog uses to analyse poverty (March 2026 Graduate CBT-1) and the Tendulkar Committee's method (September 2025 UG CBT-1). Inflation-type and unemployment-type questions are tagged syllabus-based.
Pariksha Pattern: Every Way NTPC Asks This Topic
Pattern 1: Measuring poverty
[PYQ: NTPC Graduate CBT-1 27-Mar-2026 Shift-3 | NTPC UG CBT-1 2-Sep-2025 Shift-2]
EXAM LEVEL
Q. Which index does NITI Aayog use to analyse poverty?
The Multidimensional Poverty Index (MPI).
Answer: MPI
EXAMATLAS LEVEL
Q. On what basis did the Tendulkar Committee measure poverty, and which committee came after it in 2014?
Consumption expenditure; the Rangarajan Committee (2014).
Answer: Consumption expenditure; Rangarajan Committee
Pattern 2: Inflation types and measures
[Pattern: syllabus-based, PYQ-style]
EXAM LEVEL
Q. What is stagflation?
Inflation together with stagnant growth and high unemployment.
Answer: Inflation with stagnation
EXAMATLAS LEVEL
Q. Which price index is used for India's inflation target, and what is the target band?
The Consumer Price Index (CPI); 4% with a band of ±2% (2% to 6%).
Answer: CPI; 4% ± 2%
Pattern 3: Types of unemployment
[Pattern: syllabus-based, PYQ-style]
EXAM LEVEL
Q. What type of unemployment exists when more people work on a farm than needed?
Disguised unemployment.
Answer: Disguised
EXAMATLAS LEVEL
Q. What is unemployment due to a mismatch of skills called, and which survey measures employment in India?
Structural unemployment; the Periodic Labour Force Survey (PLFS).
Answer: Structural; PLFS
Pattern 4: Human Development Index
[Pattern: syllabus-based, PYQ-style]
EXAM LEVEL
Q. Which organisation publishes the Human Development Index?
The UNDP.
Answer: UNDP
EXAMATLAS LEVEL
Q. Who developed the HDI, and what three dimensions does it measure?
Mahbub ul Haq (with Amartya Sen); health (life expectancy), education and income.
Answer: Mahbub ul Haq; health, education, income
60-Second Revision
- Inflation target: CPI 4% ± 2%; CPI base now 2024.
- Poverty: Tendulkar (consumption, 2009), Rangarajan (2014); NITI Aayog uses MPI.
- Disguised (agriculture), seasonal, structural, frictional unemployment; PLFS.
- HDI by UNDP (Mahbub ul Haq): health, education, income.