A recently published report by the World Bank, titled “Poverty and Shared Prosperity 2022: Correcting Course”, has shed light on the global poverty trends and its underlying causes. The findings of the report indicate a worrying trend that has seen a slowdown in poverty reduction efforts since 2015, further exacerbated by the ongoing Covid-19 pandemic and the war in Ukraine.
Global Poverty Reduction Trends
According to the report, worldwide efforts in reducing poverty have faced considerable challenges since 2015. While the global extreme-poverty rate had been halved by then, subsequent years saw a noticeable slowdown in poverty reduction. This was largely due to subdued global economic growth and recent unforeseen global crises. As such, it is anticipated that the global goal of eradicating extreme poverty by 2030 will not be achieved.
The Growing Number of People Living Below the Poverty Line
In 2020 alone, more than 70 million additional people were found to be living below the extreme poverty line, marking the largest one-year increase observed since global poverty monitoring began in 1990. Under the current trends, it is projected that by 2030, nearly 7% of the world’s population or 574 million people, would still be surviving on less than USD 2.15 a day, most of whom would be residing in African countries.
The Surge in Inequalities
The aftermath of the pandemic has disproportionately impacted the poorest populations. Income losses for the poorest 40% averaged at 4%, which was twice the amount experienced by the wealthiest 20%. Consequently, global inequality rose for the first time in several decades. Median global income also experienced a 4% decline in 2020, an unprecedented event since median income measurements started in 1990.
Policy Suggestions for Reducing Poverty
The report suggests a robust national policy reform body to help revive progress in reducing poverty. Three key aspects have been advised for governments to act upon promptly, including avoiding broad subsidies and increasing targeted cash transfers, focusing on long-term growth investments, and mobilizing domestic revenues without hurting the poor.
Poverty Scenario in India
A paper published by the World Bank titled ‘Poverty has Declined over the Last Decade But Not As Much As Previously Thought’ reveals that extreme poverty in India was 12.3% points lower in 2019 as compared to 2011, suggesting a significant but slower than expected decline.
Measures of Poverty Estimation
In India, NITI Aayog’s task force is responsible for poverty estimation through the calculation of the poverty line. The data for this calculation is sourced from the National Sample Survey Office under the Ministry of Statistics and Programme Implementation (MOSPI). The poverty line is determined based on consumption expenditure rather than income levels alone.
Recent Efforts in Mitigating Poverty
India has implemented a range of development programs to tackle poverty, which include the Integrated Rural Development Programme (IRDP), Pradhan Mantri Awaas Yojana, National Old Age Pension Scheme, and the Pradhan Mantri Jan Dhan Yojana, among others. However, poverty remains an elusive challenge due to factors like varying poverty rates, price levels, State Product, and quality of public distribution from state to state.