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# POVERTY REDUCTION STRATEGY TN

## A number of poverty

A number of poverty “indexes” have been constructed in this kind of framework. Much of the initial work was done by Sen (1976, 1981), followed by Kakwani (1979), Thon (1979), and Takayama (1979). A recent measure which has gained considerable acceptance was proposed by Foster, Greer and Thorbecke (1984), known as the FGT index. Given the proliferation of poverty measures proposed in the literature, a number of survey papers have also appeared in the literature like Foster (1984), Seidl (1988), Chakravarty (1990), Sen (1979, 1983 and 1992), Kundu (1981) and Borooah (1991). A recent survey on poverty measurement (Zheng, 1997) provides a comprehensive analysis of the axiomatic framework behind different poverty measures explaining the properties of each poverty measure and the relationships among axioms and the poverty measures. While quite a number of poverty measures have been proposed in the literature, only a few have been used in actual practice. Most official estimates still use the head count ratio. Some of the important measures proposed in the poverty literature are considered below. The following symbols are used n = total population z = poverty line m = number of poor (below poverty line) y i = income (or other relevant indicator) of individual i µ = mean income of the whole population µ P = mean income of the poor Gp= Gini coefficient among the poor H = Head count ratio P = Poverty gap ratio Incomes are arranged in non-descending order: y 1 ≤ y 2 ≤ … ≤ y m < Z ≤ ym+1 ≤ … ≤ y n Most poverty measures can be seen as normalised weighted sums of poverty gaps, viz., m P = A Σ w t= 1 i (z − y ) + B i Some of the important poverty measures are defined below: (1) i. Head Count Ratio The head count ratio is defined as 238

H = m/n (2) The head count ratio ignores the extent of poverty, distribution of income among the poor, mean and distribution of income of the non-poor. It is not sensitive to transfer of income from poor to rich or among the poor so long as the recipient does not cross the poverty line. ii. Poverty Gap Ratio The poverty gap ratio is defined as m P = Σ (z − y ) / mz = (z − µ ) / z (3) = t 1 i P The poverty gap ratio measures the average depth of poverty relative to the poverty line. But it also ignores income distribution among the poor. It is also insensitive to income transfers among the poor so long as nobody crosses the poverty line. iii. Sen Index The Sen index is defined as 2 m P (Sen) = Σ ( m + 1)( z − yi ) (4) (m + 1) nz i= 1 Viewed as a normalised weighted sum of poverty gaps [Equation 1], it implies that A = 2/(m+1) nz; B = 0, and w i = (m + 1-i) The Sen index ordinally ranks incomes of the poor according to their relative deprivation among the poor. The number of non-poor enter the term “A”, but not their income characteristics. It is a measure ‘focused’ on the distribution of income among the poor. The weighting scheme provides transfer sensitivity to the measures in the sense that if income is transferred from a poor to a higher income poor, poverty would increase provided the richer person does not cross the poverty line. The measure can also be written in the following form P (Sen) = H [1 – (1 – I) {1 – Gp.m/(m + 1)}] (5) where I is the income gap ratio and G p is the Gini-coefficient of incomes among the poor. iv. Takayama’s Poverty Measure Takayama attempted a translation of the Gini coefficient of income inequality into a poverty measure. 2 n * P (Takayama) = Σ ( n + 1 − i)( µ * − y i ) (6) µ * n 2 i= 1 239

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MONOGRAPH 6/2010 MDGs-BASED POVERTY

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MONOGRAPH 6/2010 March 2010 Price:

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CONTENTS Acknowledgements Contents

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List of Tables Table 1.1 Millennium

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Table 5.10 Status of Urban Water Su

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Appendix 1.12 Maternal Mortality an

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MDGs-Based Poverty Reduction: Main

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. In terms of share of below povert

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of expenditure on public goods like

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households or individuals. For each

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Chapter 1 ISSUES AND INITIAL CONDIT

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The first three goals relate to era

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. Poverty in Tamil Nadu: Inter-stat

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and the urban poverty ratio was sli

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the total poor accounted for a prog

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physical development of people. Mor

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Table 1.11: Millennium Development

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indicates that Tamil Nadu will achi

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However, there is a scope for meeti

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status of malnutrition. The accepte

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The under-five mortality rate-U5MR

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(iv) HIV/AIDS, Malaria and Other Di

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3. While Tami Nadu has done compara

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Chapter 2 REDUCING POVERTY: THE MAC

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est of the economy indicates the ex

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share of the tertiary sector in Tam

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Chart 2.1: Sectoral Growth in Tamil

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policies are in place to absorb lar

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In the context of interface between

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Table 2.7: Decomposition of the Hea

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Dutt are not so relevant for predic

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The SDE estimates vary across the s

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Chart 2.3 highlights that agricultu

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2.6 Summary In summary the followin

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Chapter 3 FISCAL REFORMS FOR POVERT

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Bardhan (1996) emphasizes that ofte

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atio of government employees to pop

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Table 3.2: Tamil Nadu in Inter-stat

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Chart 3.4: Own Tax Revenues Relativ

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collected by state-owned enterprise

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Chart 3.5: Capital Outlay as percen

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The Fiscal Policy Strategy Statemen

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f. Pension and Salary Expenditures

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10 it is kept at 40 percent to acco

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Government of Tamil Nadu has to sub

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Chapter 4 COPING WITH SPATIAL IMBAL

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In order to focus on the deficient

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Chart 4.2 indicates the arrangement

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Chart 4.5: Human Development Index:

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Table 4.4: Index of Gender Deficien

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Districts Table 4.7: Health Facilit

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Regarding access costs in availing

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4.6 Incidence of Poverty: District

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district followed by Villupuram and

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household willing to do public work

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Districts Table 4.13: Implementatio

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Table 4.14: Share of BPL Population

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Table 4.16: Block -wise Gross Acces

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Table 4.18: Block-wise IMR in Thiru

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8. For provision of safe drinking w

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Chapter 5 WATER, LAND AND AGRICULTU

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5.2 Water: Key Issues in Tamil Nadu

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Table 5.3: Sources of Water Supply

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funding under the Water Resources C

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In 2006-7, 65.83 percent of habitat

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the major cause for poor maintenanc

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about 30 litre per capita per day (

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2006-07). However, total area under

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nearly 3.5 times as high as the pri

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5.4 Agriculture: Key Issues Agricul

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Table 5.19: Productivity (Yield) of

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Only rice and sugarcane received ir

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iv. There are severe water quality

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Chapter 6 LAST MILE REACH STRATEGIE

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targeting as a device to improve ef

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eneficiaries and of delivering prog

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In the nighbourhood of the poverty

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inefficiencies. Some of the major c

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Tamil Nadu is close to achieving un

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programmes. It is the only Self Emp

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6.5 Reaching Households and Individ

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proposition more insurable, a group

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line to post-office saving banks or

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each the urban poor who live in slu

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Eleventh Plan (2007) observes: “O

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i. provide financial assistance for

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unemployed or underemployed poor by

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Services Prepare detailed water sup

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Chapter 7 SUMMARY AND FORMULATION O

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positive and relatively high. The b

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3. In terms of composition of BPL p

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holdings are smaller than 4 hectare

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There are considerable inter-distri

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R i =(I a +I max -I i )/(I a +I max

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line to post-office saving banks or

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d. Targeting As far as rural areas

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7.6 Urban Poverty Reduction Strateg

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Fund, GoTN has created Tamil Nadu I

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Some initiative by Government of Ta

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land. There is need to develop a sc

• Page 209 and 210: REFERENCES Agarwal, S.P. (2005),
• Page 211 and 212: Deaton, Angus and Alessandro Tarozz
• Page 213 and 214: Himmelfarb, G. (1984), The Idea of
• Page 215 and 216: Report of the Working Group on Urba
• Page 217 and 218: APPENDIX TABLES Appendix Table 1.1:
• Page 219 and 220: Appendix Table 1.1 (contd.): Millen
• Page 221 and 222: Appendix Table 1.2 (a): Poverty Lin
• Page 223 and 224: Appendix Table 1.3: Poverty Gap Est
• Page 225 and 226: Appendix Table 1.5: Head Count Rati
• Page 227 and 228: Appendix Table 1.6 (contd.): Progre
• Page 229 and 230: Appendix Table 1.8: Women’s Malnu
• Page 231 and 232: Appendix Table 1.10: Child Mortalit
• Page 233 and 234: Appendix Table 1.11 (contd.): State
• Page 235 and 236: Appendix Table1.12 (contd.): Matern
• Page 237 and 238: Appendix Table 2.3: Decomposition o
• Page 239 and 240: and Publicity Relief from Natural C
• Page 241 and 242: Appendix Table 4.3: Demography Rela
• Page 243 and 244: Appendix Table 4.5: Health Faciliti
• Page 245 and 246: Sl. No Appendix Table 4.7: Efficien
• Page 247 and 248: Appendix Table 4.9: Employment unde
• Page 249 and 250: Appendix Table 5.1: Major and Mediu
• Page 251 and 252: Appendix Table 7.1: Indices for Dis
• Page 253 and 254: ANNEXURES 231
• Page 255 and 256: Monotonicity Sensitivity Axiom Mono
• Page 257 and 258: component of the poverty line is th
• Page 259: Fuchs (1969), while advocating the
• Page 263 and 264: Annexure 1.3 UNIFORM RECALL PERIOD
• Page 265 and 266: ‣ Periyar became Erode; ‣ Tirun
• Page 267 and 268: Women Receiving 3 Or More ANC Visit
• Page 269 and 270: In Sivagangai, as per 2001 census,
• Page 271 and 272: Table 4.3: Block wise Gender Wise G
• Page 273 and 274: Block Table 4.6: Trained Teachers a
• Page 275 and 276: Annexure 5.1 ENVIRONMENTAL CONSEQUE
• Page 277 and 278: Annexure 6.1 NOTES ON SELECTED CENT
• Page 279 and 280: 10. Kasturba Gandhi Balika Vidyalay
• Page 281: MSE Working Papers Recent Issues *
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