Pew Research study on Poverty in India

Synopsis: A recent Pew research study report reveals increasing poverty in India. Further, the report also points out some serious flaws in the government policy during pandemic times.

Introduction

A recent Pew research study report reveals increasing poverty in India and China in 2020. As per the report, the pandemic has pushed approximately 7.5 crore people into poverty levels(earn less than $2 a day). In contrast, the pandemic pushed only 10 lakh people into poverty in China.

Intensity of the Pew Research study on Poverty:

On one hand, in India, the pandemic reversed the gains made in the preceding nine years in poverty reduction programmes. On the other hand, China pushed back only one year, matching the 2019 level.

Is the Pew research study reliable?

The Pew research study is based on the analysis of the World Bank’s database. However,  the research itself mentions that there are multiple assumptions in the report. This includes the assumption on-base years for income/consumption also. In India, the base year was 2011 and for China, the base year is 2016.

This might be the reason for the large difference between the poverty data in India and China. But still, there are few significant highlights of the report.

Highlights of the report:

1. Widening inequality in India: The pandemic increased the inequality level in India. As the lower-income populations have borne the job and income losses due to the multiple lockdowns.
2. The fiscal policy response of India is uncertain. India introduced many policy initiatives to revive the economy. Especially the pre-pandemic tax cuts provided to the corporates to revive private investment and revive growth.
   The Pew research report data reveals that the benefits of fiscal policy measures did not reach the desired persons. So the Fiscal policy has to be assessed.
3. The National Rural Employment Guarantee scheme’s record level of demand is proof of increasing Poverty in India.

Suggestions:

With the COVID-19 cases increasing once again. If the data on the report is not assessed properly then India might face two critical challenges.

1. The economic recovery might not be feasible to the desired level
2. The poverty level in India might increase dramatically.

So the government policy responses will test the government’s policy on ‘lives versus livelihoods’.

Source: The Hindu