POVERTY REDUCTION STRATEGY TN

the total poor accounted for a progressively increasing share so that by 2004-05 the
urban poor are nearly half of the total poor.
Chart 1.2: Urban Poor in the Total Poor in Tami Nadu
50.00
45.00
40.00
35.00
30.00
25.00
20.00
15.00
10.00
5.00
0.00
1973-74 1977-78 1983 1987-88 1993-94 2004-05
Urban Poor/Total Poor in %
As the poverty ratio does not make any distinction within the broad category of the poor
on the basis of their actual levels of consumption and deprivation, the Poverty Gap Index
(PGI) is widely used to capture the depth and severity of poverty. The PGI measures the
total shortfall of consumption below the poverty line, per capita of the total population
(Appendix Table 1.3 gives the details).
Thus, it measures the magnitude of the effort that would be required to raise the
consumption level of all the persons below the poverty line to the consumption level of
the poverty line. During 1987-88 to 1993-94 the PG Index for rural India (adjusted
estimates) declined from 9.2 percent to 7.0 percent (2.2 percentage points decline) and
the index for Tamil Nadu from 13.7 to 9.1 percent (4.6 percentage points decline). The
PG Index for urban India also declined from 4.8 percent to 3.7 (i.e., 1.1 percentage
points decline) percent while PG index for urban Tamil Nadu declined from 6.2 percent to
4.5 percent. In 1999-00, there was a sharp decline of PG index for rural Tamil Nadu (4.5
percentage points decline). The urban Index also declined by 2.5 percentage points. In
1999-00, both urban and rural indices for Tamil Nadu were lower than that for the nation
(Appendix Table 1.3). Thus, the depth and severity of poverty has declined as fast as
incidence of poverty.
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