Question – Distinguish between head-count ratio and poverty-gap ratio as measures of poverty. What is the extent of poverty in India?
Head-count ratio is a measure of poverty that calculates the percentage of the population living below the poverty line. The poverty line is the income level below which a household is considered to be poor. The head-count ratio does not take into account the depth of poverty, or how far below the poverty line households are living.
Poverty-gap ratio is a measure of poverty that calculates the average shortfall of income below the poverty line. The poverty-gap ratio is calculated by dividing the total income shortfall of all poor households by the total number of poor households. The poverty-gap ratio takes into account the depth of poverty, but not the severity of poverty.
The extent of poverty in India is significant. According to the World Bank, in 2019, 22.5% of the Indian population lived below the international poverty line of $1.90 per day. This means that over 260 million people in India are living in extreme poverty.
There are a number of factors that contribute to poverty in India, including:
- Low levels of education and skills
- High levels of unemployment and underemployment
- Inadequate access to healthcare and other essential services
- Social and economic exclusion
- Natural disasters and other shocks
The Indian government has taken a number of steps to address poverty, including:
- Investing in education and healthcare
- Providing employment opportunities
- Expanding access to essential services
- Implementing social safety net programs
Here is an outline for an answer to the given topic:
- Introduction
- What is poverty?
- What are the different measures of poverty?
- Head-count ratio
- Definition
- Calculation
- Advantages
- Disadvantages
- Poverty-gap ratio
- Definition
- Calculation
- Advantages
- Disadvantages
- The extent of poverty in India
- Data
- Factors contributing to poverty
- Government’s efforts to address poverty
- Conclusion
Here are some hints for each section of the answer:
- Introduction
- Poverty is a condition in which people lack the basic necessities of life, such as food, water, shelter, and healthcare.
- There are a number of different measures of poverty, each with its own advantages and disadvantages.
- Head-count ratio
- The head-count ratio is the percentage of the population living below the poverty line.
- The poverty line is the income level below which a household is considered to be poor.
- The head-count ratio is a simple and easy-to-understand measure of poverty.
- However, it does not take into account the depth of poverty, or how far below the poverty line households are living.
- Poverty-gap ratio
- The poverty-gap ratio is the average shortfall of income below the poverty line.
- The poverty-gap ratio takes into account the depth of poverty, but not the severity of poverty.
- The poverty-gap ratio is a more accurate measure of poverty than the head-count ratio.
- The extent of poverty in India
- According to the World Bank, in 2019, 22.5% of the Indian population lived below the international poverty line of $1.90 per day.
- This means that over 260 million people in India are living in extreme poverty.
- The factors contributing to poverty in India include low levels of education and skills, high levels of unemployment and underemployment, inadequate access to healthcare and other essential services, social and economic exclusion, and natural disasters and other shocks.
- The Indian government has taken a number of steps to address poverty, including investing in education and healthcare, providing employment opportunities, expanding access to essential services, and implementing social safety net programs.
- Conclusion
- Poverty is a major challenge in India. The government will need to continue to invest in poverty reduction programs in order to make progress in reducing poverty and improving the lives of the poor.