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India could see millions pushed into extreme poverty due to pandemic: World Bank analysis

South Asia may see 42 mn people being pushed into extreme poverty, according to World Bank analysis, as the pandemic leads to longer shutdowns, increase in costs.

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New Delhi: India may see millions pushed into extreme poverty on account of the Covid-19 pandemic, according to a World Bank analysis. 

The numbers are based on the recent growth projections, forecasting that the Indian economy may contract in 2020-21 by 3.2 per cent.

It pointed out South Asia may see a larger increase in the number of poor as a result of the pandemic, followed by Sub-Saharan Africa. Of the 100 million expected to be pushed into extreme poverty, 42 million are in South Asia and 39 million in Sub-Saharan Africa. 

“The new GEP (global economic output) forecasts give a particularly sobering picture for India, which is home to many of the world’s poor. As a result, though the picture is broadly unchanged for Sub-Saharan Africa compared to our last update, South Asia may see a larger increase in the number of poor as a result of Covid-19,” said the analysis published on the bank’s website on 8 June. 

However, the authors placed a caveat on their findings.

“A big caveat to this finding is that the latest poverty estimates we have from India are from 2011-12. This makes it very difficult to get an accurate picture of poverty there before the pandemic took off, let alone a picture of poverty today,” it said. 

With the last round of consumption survey for 2017-18 — that forms the basis of poverty estimates — scrapped by the Indian government and the 2020-21 survey unlikely to be taken up due to the pandemic, India may not have any poverty estimates for nearly 10 years.

Also read: India’s 50-day lockdown has brought economic misery even as Covid cases surge

What led to upswing in poverty estimates

Using the updated global growth numbers released in June by the World Bank, the analysts forecast that 71-100 million or 7-10 crore people across the world may be pushed into poverty due to the pandemic.

This corresponds to a predicted global growth contraction of 5-8 per cent this year. The earlier poverty projections in April had pegged this number at 40-60 million or 4-6 crore.

The analysts pointed out since April, the epicentre of the pandemic has “shifted from Europe and North America to the global south, increasing the death toll in low and middle-income countries, induced longer shutdowns, and increased the economic costs of the pandemic”. This has led to an uptick in the poverty estimates. 

The poverty line used to make the estimates is the international poverty line of $1.9 per day or roughly Rs 145-150 per day. 

Growth & poverty forecasts for next year

For the next year, the World Bank pointed out that projecting what happens in 2021 and beyond comes with even more uncertainty.

It added though the growth forecasts for next year expect the global economy to recover, poverty forecasts suggest that the number of people living in extreme poverty will be broadly unchanged between 2020 and 2021.

“A lot has to do with the growth rates of the countries with the most poor. Nigeria, India, and the Democratic Republic of Congo — three countries which we project are home to more than a third of the world’s poor — are predicted to have per capita growth rates in real GDP of –0.8%, 2.1% and 0.3%, respectively. With population growth rates of 2.6%, 1.0% and 3.1%, this is hardly enough for sustainable decreases in the poverty headcount,” the analysis said.

Also read: I will do any job I find – How India’s desperately poor hope to get out of Covid misery


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  1. Well, the Ram Mandir needs to be constructed, the bullet trains need to run, Lutyens Delhi needs to be torn down and the costly Central Vista needs to be built there, the PM needs alarger and more palatial house and he also needs 2 – not hust 1- expensive, highly customised being Boeing 757 aircraft to ferry him around the globe, money needs to be allocated to gomutra research and NaMo waves, concentration camps for termites have to be built and then, when all these have been completed, the plight of the poor may be taken up by the Modi government !

  2. The decline began with Demo and what accelerated the nosedive was botched up GST. Lockdown is just driving the last nail in the coffin. If economy is to register a V-shaped recovery, job generation on massive scale is absolutely necessary. This will empower people and will create demand. If demand is created, production will go up and economy will expand. Tax collection will concomitantly pick up substantially. Public spending is absolutely essential and a lot of developmental projects must be launched. This will create national wealth apart from enhancing the livelihood of the common man. If necessary, for a limited period and for a limited purpose, Govt must resort to printing of notes – only for capital expenditure and not for revenue expenditure. a k pattabiraman, chennai

    • Mr A.K.Pattabhiraman: I agree with much of what you write.

      As you rightly point out, the decline started with an unwanted, idiotic measure called demonetisation, followed up by another self-goal called GST. The relatively healthy economy that Dr Manmohan Singh bequeathed to PM Modi was not only driven to the ground by the latter, he also ensured that qualified economists like Dr Raghuram Rajan, Arvind Subramanian, Urjit Patel, Amartya Sen who could have formulated sound policies were replaced by pliant Hindutva apparatchiks and know-nothings. Worse still, at a time when oil prices were low and the Chinese juggernaut was wobbling, India could not strike the iron while it was hot due to these self-inflicted wounds. Clearly, there are limitations to Hindutva and chaiwala economics.

      I do see some issues with the Keynesian approach you outline in your comment:
      1. The influx of capital that India needs has slowed down to a trickle.
      2. FDI is down as foreign investors are wary of the regulatory chaos in India, the political risk due to riots, crazy Hindutva ideologies, atmanirbhar and other zany ideas.
      3. Remittances form foreign workers is down and
      4. Capital flight is rampant – most Gujaratis are moving their funds out of the country.

      Yes, public spending is essential and money must be put into the pockets of the poor so as to increase deamnd for goods and services. But as we see, the PM is doing the very opposite. Crazy vanity projects such as the Central Vista, statue of Patel, bullet trains, Ram Mandir and so on are being prioritised.

      But not entirely surprising – after all, there are no economists in the room now are there?

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