Poverty and Shared Prosperity in 2022

Poverty and Shared Prosperity in 2022

• A paper titled "Poverty and Shared Prosperity 2022: Correcting Course" was just published by the World Bank.

What are the Report's Findings?

• Global Poverty Reduction: Since 2015, the rate of global poverty reduction has been sluggish, but the cholera pandemic and the Ukraine conflict have completely turned the trend around.
• The rate of extreme poverty around the world had decreased by more than half by 2015.
• Since then, global economic growth has slowed as poverty alleviation has also slowed.
• As a result, the 2030 global objective to alleviate severe poverty would not be met.
• The number of people living below the poverty line increased by approximately 70 million in 2020 alone, the greatest one-year increase since global poverty monitoring began in 1990.
• With the majority of them living in Africa, 574 million people—nearly 7% of the world's population—will still be subsisting on less than USD 2.15 per day in 2030.
• An increase in inequality
• The costs of the pandemic were borne mostly by the most vulnerable: The poorest 40% of the income distribution saw income losses on average of 4%, which was twice as much as the richest 20%.
• As a result, global inequality increased for the first time in decades.
• The global median income fell by 4% in 2020, marking the first fall since 1990, when median income measurements first started.

What suggestions are there?

• Reforms to a national policy may help the fight against poverty get back on track.
• Additional international cooperation will be required.
• Governments should take fast action in three areas of fiscal policy:
• Stay away from general subsidies and enhance focused financial transfers:
• In low- and middle-income countries, the richest 20% of the population, who use more energy, receive 50% of all energy subsidies.
• Cash transfers are a much more effective means of assisting the underprivileged and needy.

Putting Long-Term Growth First

• The time has come to make high-return investments in infrastructure, research and development, and education.
• More effective expenditure and stronger crisis planning will be essential in a period of limited resources.
• Property taxes and carbon taxes are two ways to raise money domestically without harming the most vulnerable.
• The basis of personal and corporate income taxes might also be widened.
• If sales and excise taxes do need to be increased, governments should simultaneously deploy targeted cash transfers to counteract their effects on the most vulnerable households in order to reduce economic distortions and adverse distributional repercussions.

How bad is the poverty situation in India?

• According to a paper titled "Poverty has Declined over the Last Decade But Not As Much As Previously Thought" that the World Bank reportedly issued.
• With the poverty headcount rate falling from 22.5% in 2011 to 10.2% in 2019, with a relatively faster reduction in rural regions, extreme poverty in India was 12.3% points lower in 2019 compared to 2011.
• India's rural poverty decreased more than its urban counterpart, falling from 26.3% in 2011 to 11.6% in 2019, while urban poverty decreased from 14.2% to 6.3% over the same time period.
• Poverty Estimation: The task force of NITI Aayog determines the poverty line in India using information collected by the National Sample Survey Office, which is part of the Ministry of Statistics and Programme Implementation (MOSPI).
• In India, estimating the poverty line is based on consumption costs rather than income levels.

Recently Adopted Measures:

• Integrated Rural Development Programme (IRDP)
• Pradhan Mantri Awaas Yojana
• National Old Age Pension Scheme
• Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) 2005
• Deendayal Antyodaya Yojana - National Rural Livelihood Mission (DAY-NRLM)
• National Urban Livelihood Mission
• Pradhan Mantri Kaushal Vikas Yojana
• Pradhan Mantri Jan Dhan Yojana