Previous Year Questions (PYQs)

on
Poverty Alleviation & Employment Generation
in India

Introductory Note

This document contains the following 3 sections –

Section A – Under this section, you will find the exact previous year’s questions that were asked in RBI
and NABARD. This section will enable you to test your knowledge based on different concepts and for
your comfort, we have segregated the questions according to the different examinations. The questions
have been arranged in the following manner

1. RBI Grade B - Here, you will find all the previous year’s questions, which were asked in phase
2 of the RBI Grade B exam, starting from 2016 onwards
2. NABARD Grade A - Here, you will find all the previous year’s questions, which were asked in
Phase 1 and Phase 2 of the NABARD Grade A exam, starting from 2016 onwards

If there is no question in this document on any exam for a particular year or years, it means no
question was asked for that exam in that year(s) or the exam itself was not conducted in that year.

Section B - In this section, you will find the answer key for all the questions, and it will enable you to
check your marks and understand your performance accordingly.

Section C – This section contains a detailed explanation of every question, and herein you will be able
to understand the concept in the best holistic manner possible.

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 Section A

Questions asked in Phase 2 of RBI Grade B exam, from 2016 onwards

Question 1 – With reference to Jawahar Rozgar Yojana, which of the following statement is correct? RBI Grade
B - Phase 2 - 2017
A. The scheme allowed only Scheduled Castes, Scheduled Tribes, and freed bonded labourers to become
beneficiaries.
B. Fifty percent of the employment opportunities were to be reserved for women in rural areas.
C. It was started with effect on April 1, 1999.
D. It was started by merging two erstwhile wage employment programme – National Rural Employment
Programme (NREP) and Rural Landless Employment Guarantee Programme (RLEGP)
E. All of the above

Question 2 – Poverty Gap is defined as___________________ RBI Grade B - Phase 2 - 2017

A. Difference between the poverty line and actual income level.
B. Gap between rich and poor.
C. Gap between developed nation and developing nation.
D. Difference between the poverty line and median income level.
E. None of the above

Question 3 – Swarnajayanti Gram Swarozgar Yojana has been restructured and launched as_______? RBI Grade
B - Phase 2 - 2018
A. Deen Dayal Antyodaya Yojana - National Livelihoods Mission
B. Pradhan Mantri Adarsh Gram Yojana
C. Prime Minister's Employment Generation Programme
D. Mahatma Gandhi National Rural Employment Guarantee Scheme
E. None of the above

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 Questions asked in Phase 1 and Phase 2 of the NABARD Grade A exam, starting from 2016 onwards

Question 1 – It is a radical and compelling paradigm shift in thinking about both social justice and a productive
economy. It could be to the twenty-first century what civil and political rights were to the twentieth century. It
is premised on the idea that a just society needs to guarantee to each individual a minimum income that they
can count on, and which provides the necessary material foundation for a life with access to basic goods and a
life of dignity.

Which concept is being discussed in the above lines? NABARD Grade A - 2017
A. Helicopter money
B. Universal Value
C. Living Wage
D. Minimum Wage
E. Universal Basic Income

Question 2 – The Phillips Curve is a graphical depiction of ___________ NABARD Grade A - 2017
A. Positive relationship between inflation and output.
B. Negative relationship between inflation and the CPI.
C. Negative relationship between inflation and unemployment.
D. Negative relationship between unemployment and output.
E. None of the above

Question 3 – It is a type of poverty generally caused by a sudden crisis or loss and is often temporary. It can be
caused by environmental disasters, divorce, or severe health problems. Which kind of poverty are we referring
to? NABARD Grade A - 2018
A. Generational poverty
B. Situational poverty
C. Absolute poverty
D. Relative poverty
E. None of the above

Question 4 – What type of unemployment occurs when a worker loses his/her current job and is in the process
to find a new one? NABARD Grade A - 2018
A. Cyclically unemployed
B. Seasonally unemployed
C. Structurally unemployed
D. Frictionally unemployed
E. None of the above
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Question 5 – Multidimensional Poverty Index is released by Oxford Poverty and Human Development Initiative
(OPHI) along with_________ NABARD Grade A - 2018
A. United Nations Environment Programme
B. United Nations Development Programme
C. United Nations Conference on Trade and Development
D. United Nations Children’s Fund
E. United Nations Educational, Scientific and Cultural Organization

Question 6 – Which of the following offers the largest employment but has a reducing share in economy?
NABARD Grade A - 2018
A. Manufacturing Sector
B. Primary Sector
C. Services Sector
D. Agriculture Sector
E. Secondary Sector

Question 7 – The most popular measurement of income inequality is the ______ index, which leverages a simple
scale of 0-1 to derive deviance from a given perfect equality point. If a system demonstrates a value of 0, the
implication is that income differences among any individuals in the population will be essentially zero, while a
measurement of 1 is complete income disparity. The primary drawback to this approach is that it measures
______ poverty.

Fill in the blanks: NABARD Grade A - 2018

A. Gini, Absolute
B. Palma, Relative
C. Gini, Relative
D. Palma, Absolute
E. Thiel entropy, Absolute

Question 8 – Which of the following is an example of structural unemployment? NABARD Grade A - 2018
A. Red Taxi lays off 500 taxi drivers and replaces them with automated self-driving cars. Taxi drivers look for
work in another industry.
B. The economy is experiencing a slowdown, so Red Taxi closes down 10 dispatch offices and lays off taxi
drivers.
C. Each month, on average three Res Taxi drivers quit their jobs in the city to move to their village and start
searching for work in their own native place.
D. Each month, on average, one of the Red Taxi drivers who quits and moves to the country will decide to
stop job searching for a new job and retire.
E. None of the above

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Question 9 – How much net calories intake has been recommended by the Ministry of Labour and Employment
for calculating minimum wages per day? NABARD Grade A – 2021

A. 2200
B. 2400
C. 2700
D. 2500
E. 2800

Section B

Answer Key

RBI Grade B questions

Question Number Answer

Question 1 Option D
Question 2 Option A
Question 3 Option A

NABARD Grade A questions

Question Number Answer

Question 1 Option E
Question 2 Option C
Question 3 Option B
Question 4 Option D
Question 5 Option B
Question 6 Option D
Question 7 Option C
Question 8 Option A
Question 9 Option B

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 Section C

Explanation
RBI Grade B questions

Question 1 – With reference to Jawahar Rozgar Yojana, which of the following statements is correct? RBI Grade
B - Phase 2 - 2017
A. The scheme allowed only Scheduled Castes, Scheduled Tribes, and freed bonded labourers to become
beneficiaries.
B. Fifty percent of the employment opportunities were to be reserved for women in rural areas.
C. It was started with effect on April 1, 1999.
D. It was started by merging two erstwhile wage employment programme – National Rural Employment
Programme (NREP) and Rural Landless Employment Guarantee Programme (RLEGP)
E. All of the above

Answer – Option D

Explanation

The question is based on the landmark scheme to address the issue of poverty.
 Jawahar Rozgar Yojana was launched on April 1, 1989, by merging National Rural Employment Program
(NREP) and Rural Landless Employment Guarantee Programme (RLEGP) at the end of the Seventh Five Year
Plan.
 So, this was a consolidation of the previous employment programs and it was the largest National
Employment Program of India at that time with a general objective of providing 90-100 Days of
Employment per person particularly in backward districts. People below Poverty Line were the main targets.
 The Yojana was implemented on a rural scale. Every village was to be covered through Panchayati Raj
Institutions. The village got aid and support from District Rural Development Authority. Expenditures were
born by central & state in 80:20 ratios.
 Since 1993-94 the Yojana was made more targets oriented and expanded substantially through increased
budgetary allocations. It was divided into 3 streams:
 First Stream: Comprising general works under JRY and also two sub-schemes Indira Awas Yojna and
Million Wells Scheme. This stream got 75% of the total allocation. In Indira Awas Yojna the allocation
was increased from 6% to 10 % and in Million Wells Scheme from 20% to 30 % during that period.
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  Second Stream: This was also called intensified JRY and was implemented in selected 120 backward
districts. It got a 20% allocation.
 Third Stream: This was left with a 5 % allocation for Innovative programs which included Prevention of
labor migration, drought-proofing watershed, etc. programs.

 On April 1, 1999, this Yojana was replaced by Jawahar Gram samridhi Yojana. Later on, September 25, 2001,
Jawahar Gram Samridhi Yojana was merged with Sampoorna Grameen Rozgar Yojana

Question 2 – Poverty Gap is defined as _________RBI Grade B - Phase 2 - 2017

A. Difference between the poverty line and actual income level.
B. Gap between rich and poor.
C. Gap between developed nation and developing nation.
D. Difference between the poverty line and median income level.
E. None of the above
Answer – Option A

Explanation

The question is a definition based as discussed below.

 The poverty gap is a ratio showing the average shortfall of the total population from the poverty line—
the minimum level of income required to secure the basic necessities for survival. In other words, it reflects
the intensity of poverty in a nation.
 The poverty gap reflects the intensity of poverty in a nation, showing the average shortfall of the total
population from the poverty line.
 The poverty gap is an indicator produced by the World Bank, which measures poverty by looking at per
capita income and consumption in households.
 The data is available for 115 countries and is updated semi-annually in April and September.
 The poverty gap statistic is most valuable to economists and government officials for calculating the poverty
gap index.

Question 3 – Swarnajayanti Gram Swarozgar Yojana has been restructured and launched as__________ RBI
Grade B - Phase 2 - 2018
A. Deen Dayal Antyodaya Yojana - National Livelihoods Mission
B. Pradhan Mantri Adarsh Gram Yojana
C. Prime Minister's Employment Generation Programme
D. Mahatma Gandhi National Rural Employment Guarantee Scheme
E. None of the above
Answer – Option A

Explanation

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The question is based on the landmark scheme of self-employment. One must be familiar with all such important
schemes.

 The Swarna Jayanti Swarozgar Yojana (SGSY) has been renamed as National Rural Livelihood Mission
(NRLM). NRLM is a poverty alleviation project implemented by the Ministry of Rural Development,
Government of India. This scheme is focused on promoting self-employment and the organization of rural
poor.

Explanation
NABARD Grade A questions

Question 1 – It is a radical and compelling paradigm shift in thinking about both social justice and a productive
economy. It could be to the twenty-first century what civil and political rights were to the twentieth. It is
premised on the idea that a just society needs to guarantee to each individual a minimum income that they can
count on, and which provides the necessary material foundation for a life with access to basic goods and a life
of dignity. Which concept is being discussed in the above lines? NABARD Grade A - 2017
A. Helicopter money
B. Universal Value
C. Living Wage
D. Minimum Wage
E. Universal Basic Income

Answer – Option E

Explanation

The question is based on current affairs. The UBI was a new concept introduced by the Economic Survey and
hence this question was asked in this particular year.

Universal Basic Income

 A universal basic income (UBI) is an unconditional and universal right. It requires that every person should
have a right to a basic income to cover their needs, just by virtue of being citizens.
 The Economic Survey (ES) 2016-17 says the time has come to think of UBI for a number of following reasons
 Social Justice - A UBI promotes many of the basic values of a society that respects all individuals as free and
equal.
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 Poverty Reduction - Conditional on the presence of a well-functioning financial system, a Universal Basic
Income may simply be the fastest way of reducing poverty.
 Agency - The poor in India have been treated as objects of government policy. An unconditional cash
transfer treats them as agents, not subjects.
 By taking the individual and not the household as the unit of the beneficiary, UBI can also enhance agency,
especially for women within households.
 Administrative Efficiency - It is a way of ensuring that state welfare transfers are more efficient so that the
state can concentrate on other public goods.

Basic principles of UBI

 The main features of UBI are that it should be universal and not targeted, it should be unconditional and
not tied to work or employment, and it should be in cash.
 UBI is envisaged as a method of redistribution of resources from the rich to the poor.
 It is envisaged as providing all persons (especially, the poor) with an income to lead a dignified life, with
basic needs taken care of.
 The UBI proposed in the Economic survey is hostile to each of these objectives.

Question 2 – The Phillips Curve is a graphical depiction of _________ NABARD Grade A - 2017
A. Positive relationship between inflation and output.
B. Negative relationship between inflation and the CPI.
C. Negative relationship between inflation and unemployment.
D. Negative relationship between unemployment and output.
E. None of the above
Answer – Option C

Explanation

The question is straightforward from the inflation topic.

 The inverse relationship between the unemployment rate and inflation when graphically charted is called
the Phillips curve. William Phillips pioneered the concept first in his paper "The Relation between
Unemployment and the Rate of Change of Money Wage Rates in the United Kingdom, 1861-1957,' in 1958.
This theory is now proven for all major economies of the world.

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Description: The theory states that the higher the rate of inflation, the lower the unemployment and vice-versa.
Thus, high levels of employment can be achieved only at high levels of inflation. The policies to induce growth
in an economy, increase employment, and sustain development are heavily dependent on the findings of the
Phillips curve.
 However, the implications of the Phillips curve have been found to be true only in the short term. The Phillips
curve fails to justify the situation of stagflation when both inflation and unemployment are alarmingly high.

Question 3 – It is a type of poverty generally caused by a sudden crisis or loss and is often temporary. It can be
caused by environmental disasters, divorce, or severe health problems. Which kind of poverty are we referring
to? NABARD Grade A - 2018
A. Generational poverty
B. Situational poverty
C. Absolute poverty
D. Relative poverty
E. None of the above
Answer – Option B

Explanation

The question is definition based on different types of poverty which are discussed below.

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1. Absolute poverty: Also known as extreme poverty or abject poverty, it involves the scarcity of basic food,
clean water, health, shelter, education, and information. Those who belong to absolute poverty tend to
struggle to live and experience a lot of child deaths from preventable diseases like malaria, cholera, and
water-contamination-related diseases. Absolute Poverty is usually uncommon in developed countries.
 It was first introduced in 1990, the “dollar a day” poverty line measured absolute poverty by the
standards of the world's poorest countries. In October 2015, the World Bank reset it to $1.90 a day.
This number is controversial; therefore, each nation has its own threshold for the absolute poverty line.
 "It is a condition so limited by malnutrition, illiteracy, disease, squalid surroundings, high infant mortality,
and low life expectancy as to be beneath any reasonable definition of human decency." Said Robert
McNamara, the former president of the World Bank.

2. Relative Poverty: It is defined from the social perspective that is living standard compared to the economic
standards of the population living in surroundings. Hence it is a measure of income inequality. For example,
a family can be considered poor if it cannot afford vacations, cannot buy presents for children at
Christmas, or cannot send its young to the university.
 Usually, relative poverty is measured as the percentage of the population with income less than some
fixed proportion of median income.
 It is a widely used measure to ascertain poverty rates in wealthy developed nations. In European Union
the "relative poverty measure is the most prominent and most–quoted of the EU social inclusion
indicators"

3. Situational Poverty: It is a temporary type of poverty based on the occurrence of an adverse event like an
environmental disaster, job loss, and severe health problems. People can help themselves even with small
assistance, as poverty comes because of unfortunate events.

4. Generational Poverty: It is handed over to individuals and families from one generation to the one. This is
more complicated as there is no escape because the people are trapped in its cause and unable to access
the tools required to get out of it.
“Occurs in families where at least two generations have been born into poverty. Families living in this type
of poverty are not equipped with the tools to move out of their situation” (Jensen, 2009).

Question 4 – What type of unemployment occurs when a worker loses his/her current job and is in the process
to find a new one? NABARD Grade A - 2018
A. Cyclically unemployed
B. Seasonally unemployed
C. Structurally unemployed
D. Frictionally unemployed
E. None of the above
Answer – Option D

Explanation

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The question is definition based. It is essential to be thorough with all different types of employment.

Frictional Unemployment: Frictional Unemployment also called as Search Unemployment, refers to the time
lag between the jobs when an individual is searching for a new job or is switching between the jobs.
 In other words, an employee requires time for searching a new job or shifting from the existing to a new job,
this inevitable time delay causes frictional unemployment.
 It is often considered as voluntary unemployment because it is not caused due to the shortage of job, but
in fact, the workers themselves quit their jobs in search of better opportunities.

Question 5 – Multidimensional Poverty Index is released by Oxford Poverty and Human Development Initiative
(OPHI) along with___________ NABARD Grade A - 2018
A. United Nations Environment Programme
B. United Nations Development Programme
C. United Nations Conference on Trade and Development
D. United Nations Children’s Fund
E. United Nations Educational, Scientific and Cultural Organization
Answer – Option B

Explanation

The question is fact-based. These kinds of questions are frequently asked time and again in different types of
examinations.

 The Multidimensional Poverty Index was launched by the UNDP and the OPHI in 2010.
 MPI is based on the idea that poverty is not unidimensional (not just depends on income and one individual
may lack several basic needs like education, health, etc.), rather it is multidimensional. The index shows the
proportion of poor people and the average number of deprivations each poor person experiences at the
same time.
 MPI uses three dimensions and ten indicators which are:

1. Education: Years of schooling and child enrollment (1/6 weightage each, total 2/6);
2. Health: Child mortality and nutrition (1/6 weightage each, total 2/6);
3. Standard of living: Electricity, flooring, drinking water, sanitation, cooking fuel and assets (1/18
weightage each, total 2/6).

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  A person is multidimensionally poor if she/he is deprived in one-third or more (means 33% or more) of
the weighted indicators (out of the ten indicators). Those who are deprived of one-half or more of the
weighted indicators are considered living in extreme multidimensional poverty.
 MPI is significant as it recognizes poverty from different dimensions compared to the conventional
methodology that measures poverty only from income or monetary terms.

Question 6 – Which of the following offers the largest employment but has a reducing share in economy?
NABARD Grade A - 2018
A. Manufacturing Sector
B. Primary Sector
C. Services Sector
D. Agriculture Sector
E. Secondary Sector
Answer – Option D

Explanation

The question is regarding the structure of Indian economy, which is again a basic aspect mentioned in Ncert
and all other books of Indian economy.

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 Workforce in Different Sectors

Contribution to GDP

Question 7 – The most popular measurement of income inequality is the ______ index, which leverages a simple
scale of 0-1 to derive deviance from a given perfect equality point. If a system demonstrates a value of 0, the
implication is that income differences among any individuals in the population will be essentially zero, while a
measurement of 1 is complete income disparity. The primary drawback to this approach is that it measures
______ poverty.

Fill in the blanks: NABARD Grade A - 2018

A. Gini, Absolute
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B. Palma, Relative
C. Gini, Relative
D. Palma, Absolute
E. Thiel entropy, Absolute
Answer – Option C

Explanation

The question is straightforward and is based on the important topic of the Gini index.

Gini Index

 The Gini Index is a summary measure of income inequality. The Gini coefficient incorporates the detailed
shares data into a single statistic, which summarizes the dispersion of income across the entire income
distribution.
 The Gini coefficient ranges from 0, indicating perfect equality (where everyone receives an equal share), to
1, perfect inequality (where only one recipient or group of recipients receives all the income).
 The Gini is based on the difference between the Lorenz curve (the observed cumulative income distribution)
and the notion of the perfectly equal income distribution.

Question 8 – Which of the following is an example of structural unemployment? NABARD Grade A - 2018
A. Red Taxi lays off 500 taxi drivers and replaces them with automated self-driving cars. Taxi drivers look for
work in another industry.
B. The economy is experiencing a slowdown, so Red Taxi closes down 10 dispatch offices and lays off taxi
drivers.
C. Each month, on average three Res Taxi drivers quit their jobs in the city to move to their village and start
searching for work in their own native place.
D. Each month, on average, one of the Red Taxi drivers who quits and moves to the country will decide to
stop job searching for a new job and retire.
E. None of the above
Answer – Option A

Explanation

The question is an application type based on the different types of unemployment.

 Structural Unemployment: It is a category of unemployment arising from the mismatch between the jobs
available in the market and the skills of the available workers in the market.
 Many people in India do not get jobs due to lack of requisite skills and due to poor education level, it
becomes difficult to train them.

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Question 9 – How much net calories intake has been recommended by the Ministry of Labour and Employment
for calculating minimum wages per day? NABARD Grade A – 2021

A. 2200
B. 2400
C. 2700
D. 2500
E. 2800

Answer – Option B

Explanation

The question is factual type.

 An expert committee set up by Ministry of Labour and Employment (MoLE) has recommended a
national minimum wage of Rs 375, up from Rs 176 (as of June 1, 2017), while reducing the calorie intake
(per person and per day) from 2,700 to 2,400.

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