Why does the government run a rural job guarantee, sell cheap grain through ration shops, or open bank accounts for the poor? These are all part of India’s drive to remove poverty and inequality. In this Cavalier guide we decode the most important government schemes and policies in plain language, with the exact facts, dates and figures the NDA exam asks.
Why Government Schemes Exist
When India became independent in 1947, it was one of the poorest nations on earth. A huge share of people lived below the poverty line, could not read or write, and had no secure job or food. A free market alone could not fix this quickly, so the government decided to step in directly through schemes and policies.
A government scheme is a planned programme, backed by public money, that delivers a specific benefit — a job, cheap food, a bank account, free schooling or a pension — to a target group of citizens. These schemes turn the promise of a welfare state in our Constitution into real action on the ground.
The aim of welfare schemes is to reduce poverty, unemployment and inequality, and to provide social security. Most flow from the Directive Principles of State Policy (Part IV of the Constitution).
For the NDA exam you do not need every tiny detail. You need the name, the launch year, the ministry or aim, and the target group of each major scheme. That is exactly what gets asked, often as a simple matching or ‘which year was X launched’ question.
Schemes are also classified by who funds them. A Central Sector Scheme is fully paid for by the Union government, while a Centrally Sponsored Scheme shares the cost between the Centre and the States in a fixed ratio. Knowing this difference helps you answer the occasional ‘who funds this scheme’ question that examiners slip in.
Planning: The Backbone of Policy
Before schemes came planning. India chose a mixed economy, where both the government (public sector) and private businesses work together. To guide this, the government set up the Planning Commission in 1950.
The Planning Commission prepared Five-Year Plans — detailed targets for growth, industry, agriculture and welfare over five years. The First Five-Year Plan (1951–56) focused on agriculture, while the Second Plan focused on heavy industry.
In 2015, the Planning Commission was replaced by NITI Aayog (National Institution for Transforming India). The era of Five-Year Plans formally ended; India now uses shorter strategy documents and vision plans.
A turning point came in 1991, when India faced a serious balance-of-payments crisis. The government introduced the LPG reforms — Liberalisation, Privatisation and Globalisation. This opened the economy, reduced government control over industry, and welcomed foreign investment. Many later schemes were designed to make sure the poor were not left behind by these reforms.
Poverty and Employment Schemes
The biggest group of schemes targets poverty and unemployment. The flagship here is the rural job guarantee programme.
The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) was passed in 2005. It guarantees 100 days of wage employment in a financial year to every rural household whose adult members volunteer to do unskilled manual work. It is a legal right, not just a promise.
Other important employment and livelihood schemes include:
- Deen Dayal Antyodaya Yojana – National Rural Livelihoods Mission (DAY-NRLM) — promotes self-help groups (SHGs) for rural women.
- Pradhan Mantri Kaushal Vikas Yojana (PMKVY), 2015 — a skill-development scheme to make youth employable.
- Pradhan Mantri Rojgar Protsahan Yojana — encourages employers to create new formal jobs.
Remember the ‘100 days’ figure and the year 2005 for MGNREGA — these two facts are the most repeated NDA points on this scheme.
Food Security and the Public Distribution System
No matter how many jobs exist, the poorest still need guaranteed food. India delivers this through the Public Distribution System (PDS).
Under the PDS, the government buys foodgrains (mainly wheat and rice) from farmers at a Minimum Support Price (MSP), stores it through the Food Corporation of India (FCI), and sells it cheaply at ration shops (fair price shops) to people holding ration cards.
The Targeted PDS (TPDS) divides households into Below Poverty Line (BPL) and Above Poverty Line (APL) so subsidies reach the truly needy.
The biggest legal step was the National Food Security Act (NFSA), 2013. It gives up to two-thirds of India’s population the legal right to subsidised foodgrains. Linked schemes include the Mid-Day Meal Scheme in schools and the Integrated Child Development Services (ICDS) for young children and mothers.
Do not confuse MSP (Minimum Support Price) with the ration-shop price. MSP is what the government pays farmers; the ration price is the cheaper rate at which grain is sold to the poor.
Financial Inclusion Schemes
For decades, crores of poor Indians had no bank account. Without an account they could not save safely or receive government benefits directly. Financial inclusion means bringing every household into the formal banking system.
The Pradhan Mantri Jan Dhan Yojana (PMJDY) was launched in 2014. It opens zero-balance bank accounts for the poor, with a RuPay debit card and accident insurance cover. It entered the record books for opening the most accounts in the shortest time.
Jan Dhan made possible the JAM trinity — Jan Dhan, Aadhaar and Mobile. Together these allow Direct Benefit Transfer (DBT), where subsidies and pensions are paid straight into a person’s account, cutting out middlemen and leakage.
Related schemes:
- Pradhan Mantri Mudra Yojana (PMMY), 2015 — small loans up to ₹10 lakh for tiny businesses, under three categories: Shishu, Kishore and Tarun.
- Stand-Up India — bank loans for SC/ST and women entrepreneurs.
Insurance and Pension Schemes
A poor family can be ruined by a single accident, illness or death of the earning member. Social security schemes protect them at very low cost.
- Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) — life insurance cover for a small yearly premium.
- Pradhan Mantri Suraksha Bima Yojana (PMSBY) — accident insurance at a very low yearly premium.
- Atal Pension Yojana (APY) — a guaranteed pension after the age of 60 for workers in the unorganised sector.
- Ayushman Bharat – PM Jan Arogya Yojana (PM-JAY), 2018 — health insurance cover of ₹5 lakh per family per year for treatment in hospitals.
Group the three ‘BY’ schemes together: PMJJBY (life), PMSBY (accident), APY (pension). All three were launched in 2015 as a social-security package.
Flagship Missions and Infrastructure
Beyond cash and food, several national missions aim to change everyday life — clean toilets, houses, gas, water and electricity.
- Swachh Bharat Mission, 2014 — cleanliness and toilet building to make India open-defecation free.
- Pradhan Mantri Awas Yojana (PMAY), 2015 — the goal of ‘Housing for All’, with a rural and an urban version.
- Pradhan Mantri Ujjwala Yojana, 2016 — free LPG (cooking gas) connections to women from poor households.
- Jal Jeevan Mission, 2019 — tap water (‘Har Ghar Jal’) to every rural home.
- Digital India, 2015 — digital services, internet access and e-governance for citizens.
- Make in India, 2014 — encourage manufacturing and turn India into a global production hub.
Many flagship missions cluster around 2014–2016. If you forget an exact year, this window is a sensible educated guess for the big ‘Pradhan Mantri’ missions.
Agriculture and Farmer Welfare
About half of India still depends on agriculture, so farmer-focused schemes are a major policy area and a favourite of examiners.
- Pradhan Mantri Fasal Bima Yojana (PMFBY), 2016 — crop insurance against failure due to natural causes.
- Pradhan Mantri Kisan Samman Nidhi (PM-KISAN), 2019 — direct income support of ₹6,000 per year to small and marginal farmers in three instalments.
- Soil Health Card Scheme, 2015 — tells farmers the nutrient status of their soil.
- Pradhan Mantri Krishi Sinchayee Yojana (PMKSY) — promotes irrigation (‘Har Khet Ko Paani’).
India’s farm story also rests on the Green Revolution of the 1960s, which boosted wheat and rice output using high-yielding seeds, irrigation and fertilisers, and the White Revolution (Operation Flood), which made India the world’s largest milk producer.
Tax Policy and GST
Schemes need money, and that money comes mainly from taxes. Taxes are of two broad kinds:
- Direct taxes — paid directly to the government on income or wealth, e.g. income tax and corporate tax. The burden cannot be shifted to someone else.
- Indirect taxes — charged on goods and services and paid through the seller, e.g. GST. The burden is passed on to the final consumer.
The Goods and Services Tax (GST) was launched on 1 July 2017. It replaced many separate indirect taxes (excise, service tax, VAT) with ‘One Nation, One Tax’. It is run by the GST Council, a body of the Centre and States.
The government’s yearly financial plan of income and spending is the Union Budget, presented by the Finance Minister, usually on 1 February. When spending is more than income, the gap is called the fiscal deficit. The government covers this gap mainly by borrowing, which is why controlling the fiscal deficit is a key goal of economic policy.
A quick memory hook: direct taxes hit your income (you pay them yourself), while indirect taxes hit your shopping (you pay them through the price of goods). GST is the biggest indirect tax in India today.
Worked Example: Matching Schemes to Years
Let us solve a typical matching question the Cavalier way — by grouping schemes with their aim and year.
Match each scheme with its main purpose: (i) MGNREGA (ii) PMJDY (iii) PM-KISAN (iv) Ujjwala Yojana.
Notice the trick: if you anchor each scheme to a one-line aim and a year, even tricky four-way matches become easy. Build a small table and revise it daily.
Previous-Year Style Practice
Now apply everything to a question that mirrors the real NDA General Studies pattern.
Q. Consider the following statements: (1) MGNREGA guarantees 100 days of employment to every rural household. (2) The Goods and Services Tax (GST) is a direct tax. (3) PMJDY is a financial inclusion scheme. Which of the statements are correct?
Answer: Statements 1 and 3 are correct. MGNREGA does guarantee 100 days of wage employment, and PMJDY (Jan Dhan) is indeed a financial inclusion scheme. Statement 2 is wrong — GST is an indirect tax, not a direct tax. Correct option: 1 and 3 only.
Never label GST as a direct tax. It is charged on goods and services and the burden shifts to the consumer, making it an indirect tax. This trap appears repeatedly.
Quick Revision
- Schemes aim at poverty, unemployment, inequality and social security.
- Planning: Planning Commission (1950) → Five-Year Plans → NITI Aayog (2015); LPG reforms in 1991.
- MGNREGA (2005) = 100 days of rural jobs; NFSA (2013) = right to food via PDS.
- PMJDY (2014) = bank accounts; JAM trinity enables Direct Benefit Transfer.
- Social security trio: PMJJBY, PMSBY, APY (all 2015); health = Ayushman Bharat (2018).
- Farmers: PM-KISAN (2019, ₹6,000/yr); tax reform: GST from 1 July 2017.
Make a one-page chart of scheme → year → aim and revise it every day for a week. This high-yield topic can fetch you guaranteed marks in the NDA General Studies paper.
Frequently asked questions
In which year was MGNREGA launched and what does it guarantee?
The Mahatma Gandhi National Rural Employment Guarantee Act was passed in 2005. It legally guarantees 100 days of wage employment in a financial year to every rural household whose adults volunteer for unskilled manual work.
What replaced the Planning Commission and when?
NITI Aayog (National Institution for Transforming India) replaced the Planning Commission in 2015. This also marked the formal end of the Five-Year Plan era in India.
Is GST a direct tax or an indirect tax?
GST is an indirect tax. It is charged on goods and services, and its burden is passed on to the final consumer. It was launched on 1 July 2017 under the slogan 'One Nation, One Tax'.
What is the JAM trinity?
JAM stands for Jan Dhan accounts, Aadhaar and Mobile. Together they enable Direct Benefit Transfer (DBT), where subsidies and pensions are paid straight into a beneficiary's bank account, reducing leakage.
What income support does PM-KISAN provide to farmers?
PM-KISAN, launched in 2019, gives direct income support of Rs 6,000 per year to small and marginal farmers, paid in three equal instalments directly into their bank accounts.
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