Biz Resrch
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Transcript of Biz Resrch
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Poverty And inequal ity.
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Inequality
Distribution of Income
Distribution of Wealth
Distribution of any other Attributes
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Poverty
Lack of Income
How much?
General condition of people who are badlyoff and encompasses many aspects of want
and disadvantages (Chambers)
What are these wants and disadvantages? A severe failure of basic capabilities (Sen)
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Absolute or Relative?
Something DefinitelyAbsolute
Adequate level of Food, Clothing and Shelter
Minimum Level of Nutrition
Whether Acceptable Level can be given AbsoluteMeaning independent of the Contours of the Society?
Ownership of Television?
Minimal Standards of Leisure?
Access to Scientific Education?Private Means of Transportation?
etc. etc.
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Two Reasons for Studying Distribution
- Income, Wealth , Poverty
Philosophical & Ethical Functional
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Philosophical & Ethical
Why Individuals should be treated
differently in terms of their access to life
time economic resource?
Answer : Personal Decisions Good or bad
They are poor because They had it
coming to them
In some cases it is true
But in most cases it is not so.
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Philosophical & Ethical
Unequal Treatment starts from Day1
Parental wealth, local environment, accessto utilities, etc.
To hold descendents responsible for the
sins of their ancestors is unfair. At the same time it is unfair to deprive the
parents of the right to bequeath their
children No way to resolve the dilemma at
philosophical level
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Functional aspects of Inequality
Functional and Personal Income Distribution
Distribution and Production Pattern
Relationship between past and future Distribution
Distribution on Savings and Growth
Motivations for savings Inequality over time Inverted U
Inequality, Tolerance level and Impact on futureTunneleffect
In an imperfect capital market if the distribution ofproductive ideas is loosely correlated with the distributionwealth or asset, ideas may not be implemented.
Distribution and Incentive
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Functional aspects of Poverty
Low income leads to low nutrition ( Wage affectsfood consumption)
Low nutrition creates low income ( Food consumptionaffects ability to work i.e. productivity)
Another Vicious circle of poverty
Lack of access to credit because of lack of collateral Collateral
- Insurance against the genuine failure of the project- Is a means to prevent intentional default on the part ofthe borrower
- The possibility of lost collateral reduces the incentive towalk away without repaying
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Poverty : Definitional Issues
Concern about Basic needs
Food, Housing and Clothing
A family may be deprived in one aspect, notin others
A family may be deprived in several
dimensions: Multiple deprivation
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Conflict In deciding parameters
Income or expenditure ?
Temporary or Chronic ?
Household or Individual ?
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Nutrition Based Poverty Line
Nutrition Based Poverty Lines are not Uncommon
Calorie Energy Input Resting ( Basic) Metabolism
Energy required for WorkSedentary WorkModerate ActivityHeavy Work
Other Nutrients: Protein, Vitamin etc.
Relationship Between Calorie and Other Nutrients
Nutrition Requirement Nutrition Cost at Low LevelAcceptable Expenditure
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Measurements
Inequality , Poverty and Human
Development
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Inequality Indicators
Range
Coefficient of Variation
Kuznet ratio
Lorenz Curve/ Lorenz Ratio/ Gini Coefficient
1) G1=Lorenz Ratio Pi the Cumulative Population Share
Qi the cumulative Income Share
Area Below the Lorenz Curve = {(Pi+1)-Pi))*(Qi+1)+(Q(i)}[ i= 0 to L-1]
L is total number of Income Classes ( Class Intervals)
G1= 1/(1/2)[(1/2)-Area Below the Lorenz Curve ] = 1-{(Pi+1)-Pi))*(Qi+1)+(Q(i)} [ i= 0 to L-1]
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Poverty Indicators
1)Poverty Ratio = ( Number of People Below PovertyLine=HC)/Total No. of People(=n) = Head Count Ratio =HCR =PR
2) Consumption Gap = Difference Between the per capitaconsumption of the Poor and the Poverty Line
= ( Z-yi) [i= 1,2,3----- to q ] [ yi< Z] = CG
Where, Z is the poverty line and yi is the income of ith poorpeople
= 1/q fi( Z-yi) [i=1,2,3----l] where l is number of classes
below poverty line ( For Group data)
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3) Income Gap Ratio = IGR= 1- ( Average Income ofthe Poor/ Poverty Line) = (p-yi )/p*HC
4) Poverty Gap Ratio = PGR=PR*IGR = n/N [1-(y pBar/y*)
Y pBar = average income of poor Y*= Poverty line If n increases PGR increases If IGR increases PGR increases
Sens Index ( For raw data) = SI Sens Index = PR*[ IGR+ (1-IGR)*LRP] Where, LRP
is Lorenz Ratio of Poor Persons
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Alternative Development Indicator: PQLI
Physical Quality of Life Index
1-100 Scale
Three Components
Life Expectancy (X1) at age ONE
100 Best Performance : Sweden ( 77 years in1973)
1 Worst Performance: Guinea Beasue ( 28 years in 1950)
Infant Mortality (X2)
100 Best Performance: Sweden ( 9 per 1000 in 1973)
1 Worst Performance: Gabion ( 229 per 1000 in 1950)
Literacy Rate (X3)
Percentage of Literacy 100---- 1
PQLI= (X1+X2+X3)/3 Major Criticism
Fail to incorporate many other Social and Psychological Characteristics likeSecurity, Justice, Human Rights and so on.
Income is completely ignored
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Human Development Index
Longevityas measured by Life Expectancy at Birth
Knowledge as measured by a weighted average of
Adult Literacy ( w=2/3)
Mean years of schooling (w=1/3) Standard of Living measured by real per capita
income adjusted for the differing purchasing powerparity (PPP) of each countrys currency to reflect cost
of living
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Life Expectancy Index
UNDPs
Lowest goal post with regard to Life Expectancy atBirth is 25 Years
Maximum reasonable life expectancy for a country
to try to achieve over the coming generation is 85Years
PLE=Present Life Expectancy
ALE= Aspired Life Expectancy=85
MLE= Minimum Life Expectancy=25 Life Expectancy Index
={PLE-MLE}/{ALE-MLE}
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Income Index
Adjusted Income= Natural Log of Current Income(CI)
Lowest Per Capita Income in last generation That Could Have
been $100
Log(CI) log(100) = Amount by which the Country has
exceeded this lowest goalpost
Consider this in relation to the maximum that a country
could reasonably aspire to over the coming generation.
UNDP takes this at $40000PPP
Income Index={log(CI)-log(100)}/{log(40000)-log(100)}
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HDI
It reveals that a Country can do much better
than might be expected at a low level of
income
Substantial Income gains accomplish relatively
little in Human Development.
HDI= 1/3{Income Index}+1/3{LEI}+1/3{EI}
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HDI-GDP Comparison: Medium HDI
Country HDI HDI Rank GDP (PPP$) per
capita
GDP Rank GDP Rank-HDI Rank
Russia 0.797 65 9902 59 -6
Brazil 0.792 69 8195 74 5
Thailand 0.784 74 8090 65 -9
Saudi
Arabia
0.777 76 13825 45 -21
Armenia 0.768 80 4101 112 32
China 0.768 81 5896 90 9
Sri Lanka 0.755 93 4390 106 13
Vietnam 0.709 109 2745 121 12
Kyrgyzstan 0.705 110 1935 142 32
India 0.611 126 3139 117 -9
Mynamar 0.581 130 1027 163 33
Pakistan 0.539 134 2225 128 -6
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Poverty al lev iat ion
programmes.
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NATIONA RURAL EMPLOYMENT
GUARANTEE PROGRAMME :-
The NREGA is an INDIAN job guarantee scheme , enacted
by legis lat ion on august 25, 2005
The scheme provides a legal guarantee for 100 days o f
employment in every f inancia l year to adu l t members o f
any rural househo ld w i ll ing to do publ ic wo rk- related
unsk i lled m anual work at the statutory m in imum wage of
RS.100/day . The central government ou tlay for s cheme is
RS 39,100cr ($8bi ll ion ) in FY 2009-10.
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Work and activities..
The NREGA achieves tw in object ives of rural
development and emp loym ent. The NREGA st ipu lates
that works mus t be targeted tow ards a set of speci f icrural development act iv i t ies such as: water
conservat ion and harvest ing, afforestat ion , rural
connect iv ity, f lood con tro l and protect ion such as
construct ion and repair of embankments, etc .
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Conclusion..
Job guarantee
National Advisory Council
RTI India Right To Information
NREGS (India)
NREGS (Kerala)
http://en.wikipedia.org/wiki/Job_guaranteehttp://en.wikipedia.org/wiki/National_Advisory_Councilhttp://en.wikipedia.org/wiki/RTI_Indiahttp://en.wikipedia.org/wiki/Right_To_Informationhttp://en.wikipedia.org/w/index.php?title=NREGS_(India)&action=edit&redlink=1http://en.wikipedia.org/wiki/NREGS_(Kerala)http://en.wikipedia.org/wiki/NREGS_(Kerala)http://en.wikipedia.org/w/index.php?title=NREGS_(India)&action=edit&redlink=1http://en.wikipedia.org/wiki/Right_To_Informationhttp://en.wikipedia.org/wiki/RTI_Indiahttp://en.wikipedia.org/wiki/National_Advisory_Councilhttp://en.wikipedia.org/wiki/Job_guarantee -
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Jawaharlal Nehru
National Urban Renewal Mission(JNNURM)
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Context for JNNURM
JNNURM, launched in Dec 2005, is the GOIs
response to the urban challenge
Urban System
Second Largest System Globally
Urban Population: 315 million
Urban Decadal Growth: 25-30%
GDP contribution 50% +
Urban Challenge
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Inadequate urban infrastructure,
water, sanitation, 60+ million
slum population, weak institutional
and financial frameworks
constraining adequate and
sustainable service delivery, and
more
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JNNURM Structure
Two major components
1. Urban Infrastructure and Governance
(UIGMOUD)
2. Basic services for the Urban Poor (BSP-
MHPA)
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Special Features..
First comprehensive and planned approach
Cities are required to prepare City
Development Plans (Vision Documents) asparticipatory frameworks for
Infrastructure planning and prioritization, and
Framing urban reform agendas
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Opportunities for Further Partnering
with JNNURM.. Funding for visible, big-ticket projects (e.g. MRTS)
Technical Assistance to individual states for
capacity building,project monitoring systems
Technical Assistance for specific weak states and
regions (e.g. NorthEast)
Facilitating PPP and non-sovereign financing as away of leveraging JNNURM funds
Consider earmarking loan funds to meet the gap of
JNNURM financing in selected states
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Financing the establishment
and capacity development of
urban institutions/researchcentres for sustainablecapacity building.
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THANK YOU
BY:
SAIMA ARSHAD(19)
TINGLE THOMAS(47)
NEKETA ADHIKARI(48)
LINCY KURIAN(50)
DEEPSHIKHA YADAV(51)