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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

    â—Ź 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. â—Ź 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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