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    Question

    With reference to Poverty Gap Ratio, consider the

    following statements; 1. The poverty gap ratio is the mean shortfall of the total population from the poverty line (counting the non-poor as having zero shortfall), expressed as a percentage of the poverty line. 2. There was a nearly 50% decline in PGR both in rural and urban areas during 2004- 05 to 2011-12, reflecting that the conditions of the poor have improved both in rural and urban areas. Which of the statements given above is/are correct?
    A 1 only Correct Answer Incorrect Answer
    B 2 only Correct Answer Incorrect Answer
    C Both 1 and 2 Correct Answer Incorrect Answer
    D Neither 1 nor 2 Correct Answer Incorrect Answer

    Solution

    ● Statement 1 is correct: The Poverty Gap Ratio is the gap by which mean consumption of the poor below poverty line falls short of the poverty line. It indicates the depth/intensity of poverty; the more the PGR, the worse is the condition of the poor. While the number of poor people indicates the spread of poverty, PGR indicates the depth of the poverty. ● Statement 2 is correct: During 2004-05 to 2011- 12, PGR also reduced in both rural and urban areas. While the rural PGR declined from 9.64 in 2004-05 to 5.05 in 2011-12 in the urban areas, it declined from 6.08 to 2.70 during the same period. A nearly 50% decline in PGR both in rural and urban areas during 2004-05 to 2011- 12, reflects that the conditions of the poor have improved both in urban and rural areas.

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