Poverty and Shared Prosperity Report 2022


    In News

    • Recently, the World Bank has released the report titled Poverty and Shared Prosperity 2022: Correcting Course.

    Major Highlights of the report

    • Poverty
      • The world is unlikely to meet the goal of ending extreme poverty by 2030.
      • 70 million people were plunged into poverty in 2020, the largest one-year increase since global poverty monitoring began in 1990. 
      • An estimated 719 million people subsisted on less than $2.15 a day by the end of 2020. 
    • COVID pandemic and the war in Ukraine


    • The global poverty reduction has been slowing down since 2015 but the Covid pandemic and the war in Ukraine have completely reversed the outcomes.
    • Inequalities


    • They 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 percent of the income distribution.
    • Global inequality rose for the first time in decades.
    • Global median income
      • It declined by 4 per cent in 2020, the first decline since measurements of median income began in 1990.
        • The median divides the income distribution into two equal parts: one-half of the cases falling below the median income and one-half above the median. 
    • 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.

    Major challenges as cited by the report

    • 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.
    • Biggest poor population
      • Lack of data could not have left India out of the poverty estimates simply because India is one of the countries with the biggest poor population.
    • Poverty and Shared Prosperity 2020
      • Because of India’s size, the lack of recent survey data for the country significantly affects the measurement of global poverty, as was evident in Poverty and Shared Prosperity 2020.

    Way forward

    • Fiscal policy
      • Considering the initial country conditions in terms of fiscal space it does offer opportunities for policy makers in developing economies to step up the fight against poverty and inequality.
        • The average poverty rate in developing economies would have been 2.4 percentage points higher without a fiscal response.
    • Government spending
      • It proved far more beneficial to poverty reduction in the wealthiest countries, which generally managed to fully offset Covid-19’s impact on poverty through fiscal policy and other emergency support measures.
    • Resources
      • Developing economies had fewer resources and therefore spent less and achieved less.
      • Upper-middle-income economies offset just 50 per cent of the poverty impact.
      • Low- and lower-middle income economies offset barely a quarter of the impact. 

    What is Poverty?

    • It is a multidimensional concept. It can be defined as a condition in which an individual or household lacks the financial resources to afford a basic minimum standard of living.
    • Economists and policymakers estimate “absolute” poverty as the shortfall in consumption expenditure from a threshold called the “poverty line”. 

    Committees in India so far on poverty estimation

    • The working group of 1962
    • V N Dandekar and N Rath in 1971
    • Y K Alagh in 1979
    •  D T Lakdawala in 1993
    •  Suresh Tendulkar in 2009
    •  C Rangarajan in 2014. 
      • The government did not take a call on the report of the Rangarajan Committee; therefore, poverty is measured using the Tendulkar poverty line.

    Government’s initiatives in this context

    • Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS)
    • Deendayal Antyodaya Yojana – National Rural Livelihoods Mission (DAY-NRLM)
    •  Deen Dayal Upadhyay – Gramin Kaushalya Yojana (DDU-GKY)
    • Pradhan Mantri Awaas Yojana – Gramin (PMAY-G)
    • Pradhan Mantri Gram Sadak Yojana (PMGSY)
    • Shyama Prasad Mukherjee National RuRBAN Mission (SPMRM) and National Social Assistance Programme (NSAP), and programmes of Department of Land Resources, viz., Watershed Development Component of Pradhan Mantri Krishi Sinchai Yojana (WDC-PMKSY).
    • Pradhan Mantri Jan Dhan Yojana
    • Schemes for Financial Assistance:
    • Pradhan Mantri Kisan Samman Nidhi
    • Pradhan Mantri Jan Dhan Yojana
    • Integrated Rural Development Programme (IRDP)

    Source: IE