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Illustrate the difference between rural and urban poverty. Is it correct to say that poverty has shifted from rural to urban areas? Use the trends in poverty ratio to support your answer.

Accepted Answer

The difference between rural and urban poverty is mainly of the nature of poverty. The poor are identified on the basis of their occupation and ownership of assets. The rural poor work mainly as landless agricultural labourers, cultivators with very small landholdings, landless labourers who are engaged in a variety of non-agricultural jobs and tenant cultivators with small landholdings. On the other hand, the urban, poor are largely the overflow of the rural poor who had migrated to urban areas in search of alternative employment and livelihood, labourers who do a variety of casual jobs and the self-employed who sell a variety of things on roadsides and are engaged in various activities. It can be seen from the following table showing the trends in poverty ratio that poverty has shifted from rural to urban areas.
Yearwise Poverty Ratio:

Year	Poverty ratio
Year	Rural (%)	Urban (%)	Total (%)
1973-74	56.4	49.0	54.9
1977-78	53.1	45.2	51.3
1983	45.6	40.8	44.5
1987-88	39.1	38.2	38.9
1993-94	37.3	32.4	36.0
1999-2000	27.1	23.6	26.1
2004-05	28.3	25.7	27.5

Source Planning Commission Estimates (Uniform Reference Period). It is evident from the above table that rural poverty has declined significantly from 56.4% in 1973-74 to 28.3% in 2004-05 whereas decline in urban poverty (from 49% to 25.7%) is not that significant. Moreover, the gap between the rural and urban poverty ratios which was around 7% in 1973-74 fell to just around 2% in 2004-05 again signifying the shift in poverty from rural to urban areas.

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