World Bank says 70 million plunged into poverty in 2020: What caused setbacks in India, world

Source: The post is based on the article “World Bank says 70 million plunged into poverty in 2020: What caused setbacks in India, world” published in the Indian Express on 6^th October 2022.

What is the News?

The World Bank has recently released a report, titled “Poverty and Shared Prosperity 2022: Correcting Course.”

What are the key global findings of the report?

Poverty:

– By 2015, the global extreme-poverty rate had been cut by more than half.  Global poverty reduction has been slowing down since 2015 but the Covid pandemic and the war in Ukraine have completely reversed the outcomes.

-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.

–In 2020 alone, the number of people living below the extreme poverty line rose by over 70 million. This is the largest one-year increase since global poverty monitoring began in 1990.

The poorest people bore the steepest costs of the pandemic: income losses averaged 4% for the poorest 40%, double the losses of the wealthiest 20% of the income distribution. Global inequality rose for the first time in decades.

Global median income declined by 4% in 2020. This is the first decline since measurements of median income began in 1990.

What are the key findings of the report related to India?

Poverty has gone up in India: Previous estimates suggested a poverty headcount rate at the US$1.90 poverty line of 10.4% in 2017. But the recent report suggests that poverty at the US$1.90 poverty line was 13.6% in 2017.

The report mentions the lack of recent survey data significantly affects the measurement of global poverty.

Note: The report uses data from the Centre for Monitoring Indian Economy (CMIE), because there are no official estimates of poverty available since 2011. The government decided not to release the 2017/18 National Sample Survey (NSS) round because of concerns about data quality.

What are the suggestions mentioned in the report?

The fiscal policy offers opportunities for policymakers in developing economies to step up the fight against poverty and inequality. So, the World Bank has three specific suggestions when it comes to fiscal policy. Such as, 1) Choosing targeted cash transfers instead of broad subsidies, 2) Prioritising public spending for long-term growth, and 3) Mobilizing tax revenues without hurting the poor.