In news– World Bank has recently released a report titled “Poverty and Shared Prosperity 2022: Correcting Course.
Key findings of the report-
- It stated that the world is unlikely to meet the goal of ending extreme poverty by 2030 absent history-defying rates of economic growth over the remainder of this decade.
- By 2015, the global extreme-poverty rate had been cut by more than half. Since then, poverty reduction has slowed in tandem with subdued global economic growth.
- The economic upheavals brought on by COVID-19 and later the war in Ukraine produced an outright reversal in progress.
- In 2020 alone, the number of people living below the extreme poverty line rose by over 70 million; the largest one-year increase since global poverty monitoring began in 1990.
- As a result, an estimated 719 million people subsisted on less than $2.15 a day by the end of 2020.
- Inequalities, too, have risen. The poorest people bore the steepest costs of the pandemic: income losses averaged 4 per cent for the poorest 40 per cent, double the losses of the wealthiest 20 per cent of the income distribution.
- Global inequality rose, as a result, for the first time in decades.
- Global median income declined by 4 per cent in 2020—the first decline since measurements of median income began in 1990.
India’s poverty levels-
- Poverty has gone up in India too. Previous estimates suggested a poverty headcount rate at the US$1.90 poverty line of 10.4 percent in 2017.
- The latest estimate based on Sinha Roy and van der Weide (2022) shows that poverty at the US$1.90 poverty line was 13.6 percent in 2017.
- However, the report uses data from the Centre for Monitoring Indian Economy (CMIE), because there are no official estimates of poverty available since 2011.
- The most recent survey data released by the National Sample Survey Office of India used to measure poverty is the 2011/12 National Sample Survey (NSS). The government decided not to release the 2017/18 NSS round because of concerns about data quality.
The World Bank has three specific suggestions when it comes to fiscal policy-
- Choose targeted cash transfers instead of broad subsidies.
- Prioritize public spending for long-term growth.
- Mobilize tax revenues without hurting the poor.