56 mn Indians may have turned poor in 2020 due to pandemic: World Bank

56 mn Indians may have turned poor in 2020 due to pandemic: According to new estimates by the World Bank, the pandemic has caused 56 million Indians to experience extreme poverty in 2020, bringing the global total to 71 million and making it the worst year for poverty reduction since World War II.

Indians turned poor in 2020: Key Points

• The World Bank updated its estimates of poverty in its most recent report, “Poverty and Shared Prosperity,” using a new extreme poverty limit based on the purchasing power parity (PPP) of $2.15 rather than the previous one, which was set at $1.9.
• According to estimates by economists, between 275 million and 300 million people experienced extreme poverty as a result of the pandemic. Even the multidimensional poverty index created by the NITI Aayog classifies 25% of the population as poor.
• The Ukraine conflict, as well as increasing food and energy costs, have made things worse. By the end of this year, 685 million people may be living in extreme poverty, which is almost 90 million more than what would have happened if poverty reduction had continued at the pre-COVID rate.
• According to the World Bank, the pandemic’s impact on poverty in 2020 would have been greater if governments had not responded fiscally with cash transfer programs, wage subsidies, unemployment benefits, and so on.
• The World Bank suggested fiscal policy measures to repair the damage, saying that programmes like targeted cash transfers were considerably more likely to reach poor and vulnerable groups.
• More than 60% of cash transfer spending goes to the lower 40% of the population. There is growing evidence that they have long-term benefits, such as helping families to make critical investments in their children’s education.
• In order to give the underprivileged in India food security, the Pradhan Mantri Garib Kalyan Yojana started a free food grain initiative.