India has implemented various economic policies in the last seven decades. Providing minimum basic needs to the people and reduction of poverty have been the major aims of independent India. The pattern of development that the successive five year plans envisaged laid emphasis on the upliftment of the poorest of the poor, integrating the poor into the mainstream and achieving a minimum standard of living for all. Poverty is not only a challenge for India, as more than one fifth of the world’s poor live in India alone; but also for the world, where about 300 million people are not able to meet their basic needs. Poverty has many faces, which have been changing from place to place and across time, and has been described in many ways. Most often, poverty is a situation that people want to escape. So, poverty is a call to action — for the poor and the wealthy alike — a call to change the world so that many more may have enough to eat, adequate shelter, access to education and health, protection from violence, and a voice in what happens in their communities.

Given below are some statements. Read them carefully and choose the correct statement (s) from the given options.

Statement 1:  When the number of poor is estimated as the proportion of people below the poverty line, it is known as Absolute Poverty Ratio.

Statement 2:  For the purpose of defining poverty, we divide people into two categories; the poor and the non-poor.

Only Statement 2 is correct.

The correct answer is Option 2: Only Statement 2 is correct.

Statement 1:  When the number of poor is estimated as the proportion of people below the poverty line, it is known as Absolute Poverty Ratio. This is false. When the number of poor is estimated as the proportion of people below the poverty line, it is known as ‘Head Count Ratio’.

Statement 2:  For the purpose of defining poverty, we divide people into two categories; the poor and the non-poor. This is true. For the purpose of defining poverty, we divide people into two categories; the poor and the non-poor and the poverty line separates the two.