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<p>Some can afford space travel, but for some, managing the one-time meal is rocket science. A harsh reality of the world, which is technologically so advanced that it can achieve anything possible, but the widening of the gap between the rich and poor just can not be ignored.&nbsp;</p>

<p>The world made remarkable progress to end persistent poverty in recent years, however, the unprecedented coronavirus (COVID-19) pandemic reversed decades of progress to a large extent in the fight against poverty and extreme poverty globally.&nbsp;</p>

<p>According to the World Bank, the COVID-19 crisis has pushed between 88 and 115 million people into poverty, with the majority of the new extreme poor being found in South Asian and Sub-Saharan countries. It is important to note that the poverty rates in such regions are already high.&nbsp;</p>

<p><strong>ALSO READ | <a href="https://www.wionews.com/india-news/why-is-india-poised-to-become-the-next-superpower-421146">Why is India poised to become the next superpower?</a></strong></p>

<p>October 17 is observed as the International Day for the Eradication of Poverty as it provides an opportunity to analyse the efforts made to eliminate poverty and acknowledge the struggle of people living in poverty.&nbsp;</p>

<p>It is a day to make sure that the concerns of those people living in extreme poverty are heard and the world is progressing together to build a sustainable future, with an aim to eradicate discrimination and poverty. World leaders also must ensure that everyone must fully exercise their human rights.&nbsp;</p>

<p><strong>Impact of COVID-19 on efforts to eradicate poverty:&nbsp;</strong></p>

<p>The World Bank report also mentioned that in 2021, the number of people being pushed into poverty is expected to have risen to between 143 and 163 million, joining the ranks of the 1.3 billion people who are already living in multidimensional and persistent poverty.&nbsp;</p>

<p>These "new poor" is an added challenge to the countries around the world and their efforts to eradicate poverty as the already-existing issues aggravated during the global pandemic.&nbsp;</p>

<p>However, as the world embarks on the post-Covid recovery, it is essential to move forward with better plans and sustainable development goals, instead of finding ways to get back to how it was before the pandemic because we certainly do not want to go back to a system with structural disadvantages and inequalities.&nbsp;</p>

<p><strong>Progress made by India:</strong></p>

<p>According to International Monetary Fund (IMF), at the growth rate of 11.5%, India was going to be the fastest-growing economy in 2021. The growth is a clear indication that the poverty rate in the country is on the decline, which is remarkable for a country aiming to become the next superpower.&nbsp;</p>

<p>As per the Brookings report, India is no longer the country with the most extreme poverty as in the global poverty ranking, India is sliding down.&nbsp;</p>

<p>The real-time data from the World Poverty Clock, 6 per cent or 86,799,498 (86.8 million) of the Indian population are living in extreme poverty and 30 Indians are escaping extreme poverty every minute. The Global MPI Reports 2019 and 2020 states that 21.9 per cent of the population was poor in the country.&nbsp;</p>

<p><strong>ALSO READ | <a href="https://www.wionews.com/world/status-of-women-and-state-of-feminism-in-china-419602">Status of women and state of feminism in China</a></strong></p>

<p>Illiteracy, unemployment, famines and malnutrition are some of the root causes of poverty in India, however, the Indian government is making efforts including spending on rural welfare schemes, etc and the 1991 economic reforms is a catalyst in India's emergence as a success story in globalisation that goes hand in hand with meeting infrastructural needs of its own people.&nbsp;</p>

<p>The government is focused on alleviating the poverty of Indian households with schemes like The Mahatma Gandhi National Rural Employment Guarantee Act 2005 (MNREGA), National Rural Livelihood Mission (NRLM), Pradhan Mantri Awaas Yojana-Gramin (PMAY-G), Public Distribution System (PDS), Housing for All, the Atal Mission for Urban Rejuvenation and Transformation (AMRUT), Smart Cities Mission, Digital India, Jan Dhan Yojana and Make in India.&nbsp;</p>

<p>The target of the government is to eradicate extreme poverty for all people everywhere by 2030.&nbsp;</p>


Some can afford space travel, but for some, managing the one-time meal is rocket science. A harsh reality of the world, which is technologically so advanced that it can achieve anything possible, but the widening of the gap between the rich and poor just can not be ignored.

Some can afford space travel, but for some, managing the one-time meal is rocket science. A harsh reality of the world, which is technologically so advanced that it can achieve anything possible, but the widening of the gap between the rich and poor just can not be ignored. The world made remarkable progress to end persistent poverty in recent years, however, the unprecedented coronavirus (COVID-19) pandemic reversed decades of progress to a large extent in the fight against poverty and extreme poverty globally. According to the World Bank, the COVID-19 crisis has pushed between 88 and 115 million people into poverty, with the majority of the new extreme poor being found in South Asian and Sub-Saharan countries. It is important to note that the poverty rates in such regions are already high. ALSO READ | Why is India poised to become the next superpower? October 17 is observed as the International Day for the Eradication of Poverty as it provides an opportunity to analyse the efforts made to eliminate poverty and acknowledge the struggle of people living in poverty. It is a day to make sure that the concerns of those people living in extreme poverty are heard and the world is progressing together to build a sustainable future, with an aim to eradicate discrimination and poverty. World leaders also must ensure that everyone must fully exercise their human rights. Impact of COVID-19 on efforts to eradicate poverty: The World Bank report also mentioned that in 2021, the number of people being pushed into poverty is expected to have risen to between 143 and 163 million, joining the ranks of the 1.3 billion people who are already living in multidimensional and persistent poverty. These "new poor" is an added challenge to the countries around the world and their efforts to eradicate poverty as the already-existing issues aggravated during the global pandemic. However, as the world embarks on the post-Covid recovery, it is essential to move forward with better plans and sustainable development goals, instead of finding ways to get back to how it was before the pandemic because we certainly do not want to go back to a system with structural disadvantages and inequalities. Progress made by India: According to International Monetary Fund (IMF), at the growth rate of 11.5%, India was going to be the fastest-growing economy in 2021. The growth is a clear indication that the poverty rate in the country is on the decline, which is remarkable for a country aiming to become the next superpower. As per the Brookings report, India is no longer the country with the most extreme poverty as in the global poverty ranking, India is sliding down. The real-time data from the World Poverty Clock, 6 per cent or 86,799,498 (86.8 million) of the Indian population are living in extreme poverty and 30 Indians are escaping extreme poverty every minute. The Global MPI Reports 2019 and 2020 states that 21.9 per cent of the population was poor in the country. ALSO READ | Status of women and state of feminism in China Illiteracy, unemployment, famines and malnutrition are some of the root causes of poverty in India, however, the Indian government is making efforts including spending on rural welfare schemes, etc and the 1991 economic reforms is a catalyst in India's emergence as a success story in globalisation that goes hand in hand with meeting infrastructural needs of its own people. The government is focused on alleviating the poverty of Indian households with schemes like The Mahatma Gandhi National Rural Employment Guarantee Act 2005 (MNREGA), National Rural Livelihood Mission (NRLM), Pradhan Mantri Awaas Yojana-Gramin (PMAY-G), Public Distribution System (PDS), Housing for All, the Atal Mission for Urban Rejuvenation and Transformation (AMRUT), Smart Cities Mission, Digital India, Jan Dhan Yojana and Make in India. The target of the government is to eradicate extreme poverty for all people everywhere by 2030.

As COVID-19 creates 'new poor', here's how India is progressing to eradicate extreme poverty

<p>Amidst the excitement and controversy over demonetisation and GST, and the earlier noise over flagship policies such as Make in India, an urgent issue has slipped through the cracks. That issue is, the extent of poverty in India, and what to do about it. India&rsquo;s poor performance on the recently published Global Hunger Index has been in the news last week.</p>

<p>This, taken together with the occasion of International Day for the Eradication of Poverty (October 17), is a good time to take stock of what is going on with poverty. The poverty issue has been overshadowed in recent years by the jobs issue. The two are related. Lack of decent jobs means lack of good incomes, which in turn means poverty. So in some ways, it is good that we are now talking about the root of the problem, the failure to create an adequate number of decent livelihoods. But this should not make us lose sight of the consumption side of poverty.</p>

<p>The first point worth noting is that reliable nationwide statistics on what economists call the poverty headcount ratio (the percentage of Indians spending less per day than the poverty line) are not available after 2011. This is because 2011-2012 is the last year that we have large sample consumption-expenditure data from surveys carried out by the National Sample Survey Organization.</p>

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<h5>In India poverty should be measured in terms of rupees spent only, or if there should be an attempt to analyse whether basic needs are being met.</h5>
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<p>As per this data 22 <span style="display: none;">&nbsp;</span> per cent of Indians lived in poverty in 2011, spending less than INR 27 per day in rural areas and less than INR 33 per day in urban areas. However, in 2009-2010 the NSSO also started experimenting with a different method of surveying people&rsquo;s spending habits. This method gives a poverty rate of 12.4 per cent in 2011-2012. A 2015 <a href="http://pubdocs.worldbank.org/en/109701443800596288/PRN03Oct2015TwinGoals.pdf">World Bank report</a> explains the differences in method.</p>

<p>So much for the headline statistics. Let us get into some more pertinent details. The poverty issue goes much beyond the poverty rate and the poverty line. India is not doing badly as far as a strict interpretation of poverty line goes. But as the <a href="http://nceuis.nic.in/condition_of_workers_sep_2007.pdf">Arjun Sengupta commission</a> showed nearly ten years ago, if we look at those who spend just a little more than the official poverty line (still a very low level of consumption), that percentage can be very high.</p>

<p>The figure that caught the nation&rsquo;s imagination was that 77 per cent of the population had a per capita daily consumption of INR 20 or less in 2005. The basic problem remains even today. Focusing only on the poverty line is dangerous because many people may hover right above it and they will not be any less poor in substantive terms than those just under it.</p>

<p>Second, there is a long-standing debate in India over whether poverty should be measured in terms of rupees spent only, or if there should be an attempt to analyse whether basic needs are being met. To those who have been paying to this debate, India&rsquo;s dismal performance on the Global Hunger Index does not come as a surprise.</p>

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<h5>Many people are cutting down on food and spending on other things instead.</h5>
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<p>For some years now, we have known that merely measuring daily spending adjusted for inflation is not a good way to estimate poverty, especially when nutrition is taken into consideration. What has been happening is that people are spending more money in real terms but that money is going to non-food necessities such as healthcare, education, transportation, and other services.</p>

<p>To put it another way, incomes have risen slowly for the poor while the need to consume non-food items mentioned above has become more and more compelling. The result: many are cutting down on food and spending on other things instead.</p>

<p>This much is known, indeed too well known. The question, as always, is what can be done about it. Here two recent ideas are worth exploring. One from the employment side and one from the consumption side: wage subsidies and universal basic services.</p>

<p>Last week the BJP government in Gujarat announced an interesting policy measure as an electoral promise. In addition to promising investments of around INR 20,000 crore in the garment sector to create one lakh jobs it also promised to pay a sizeable portion of the wages of the newly hired workers for a period of five years.</p>

<p>I have discussed in an <a href="http://www.wionews.com/south-asia/minimum-wage-wage-subsidy-is-the-solution-to-income-disparity-5949">earlier column</a>, the idea that the government can subsidise wages in the private sector in order to raise incomes or stimulate employment. It has also been discussed in the context of an extension of the current MGNREGA program. The bigger picture is if the government offers various forms of capital subsidies (like tax exemptions, land, lower interest rates etc.) why not wage subsidies?</p>

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<h5>Instead of giving people income grants and letting them purchase services in the market, the State should provide basic needs such as education, health, and housing free of cost.</h5>
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<p>The concept of universal basic services (UBS) has a long history but has recently been floated as an alternative to universal basic income (UBI) in developed countries. UBI has been discussed extensively in India as well (for e.g. see this year&rsquo;s Economic Survey). The UBS proposal is that instead of giving people income grants and letting them purchase services in the market, the State should provide basic needs such as education, health, and housing free of cost. This is a generalisation of existing public provisioning via the Public Distribution System (PDS) and various other schemes.&nbsp;</p>

<p>Of course many will object to such a program seeing in it a return to the &ldquo;bad only days&rdquo; of socialism and fiscal irresponsibility. The problem is that the &ldquo;good new days&rdquo; have been good only for a minority and this does not seem to be changing. If we take a look at the budgets of not only the poor but as much as half of the population, we are likely to find that the above-mentioned items account for most of the spending.</p>

<p>Universal public health, education, and housing will go a long way in alleviating pressure on people&rsquo;s budgets freeing up resources for better nutrition. Not only that it will give them much-needed room to take risks with employment, skill development as well as entrepreneurship. Further, provisioning of such services will create much-needed employment since these happen to be difficult to mechanise.</p>

<p>Overall the decline in poverty numbers till 2011 (and most likely these have declined further by now, though we don&rsquo;t have data), suggests that it is the time we stopped worrying purely about expenditure-based poverty lines and focused instead on providing basic services and raising incomes at the bottom.</p>


Job creation and providing basic services like healthcare, education will tackle poverty in India

Amidst the excitement and controversy over demonetisation and GST, and the earlier noise over flagship policies such as Make in India, an urgent issue has slipped through the cracks. That issue is, the extent of poverty in India, and what to do about it. India’s poor performance on the recently published Global Hunger Index has been in the news last week. This, taken together with the occasion of International Day for the Eradication of Poverty (October 17), is a good time to take stock of what is going on with poverty. The poverty issue has been overshadowed in recent years by the jobs issue. The two are related. Lack of decent jobs means lack of good incomes, which in turn means poverty. So in some ways, it is good that we are now talking about the root of the problem, the failure to create an adequate number of decent livelihoods. But this should not make us lose sight of the consumption side of poverty. The first point worth noting is that reliable nationwide statistics on what economists call the poverty headcount ratio (the percentage of Indians spending less per day than the poverty line) are not available after 2011. This is because 2011-2012 is the last year that we have large sample consumption-expenditure data from surveys carried out by the National Sample Survey Organization. In India poverty should be measured in terms of rupees spent only, or if there should be an attempt to analyse whether basic needs are being met. × As per this data 22 per cent of Indians lived in poverty in 2011, spending less than INR 27 per day in rural areas and less than INR 33 per day in urban areas. However, in 2009-2010 the NSSO also started experimenting with a different method of surveying people’s spending habits. This method gives a poverty rate of 12.4 per cent in 2011-2012. A 2015 World Bank report explains the differences in method. So much for the headline statistics. Let us get into some more pertinent details. The poverty issue goes much beyond the poverty rate and the poverty line. India is not doing badly as far as a strict interpretation of poverty line goes. But as the Arjun Sengupta commission showed nearly ten years ago, if we look at those who spend just a little more than the official poverty line (still a very low level of consumption), that percentage can be very high. The figure that caught the nation’s imagination was that 77 per cent of the population had a per capita daily consumption of INR 20 or less in 2005. The basic problem remains even today. Focusing only on the poverty line is dangerous because many people may hover right above it and they will not be any less poor in substantive terms than those just under it. Second, there is a long-standing debate in India over whether poverty should be measured in terms of rupees spent only, or if there should be an attempt to analyse whether basic needs are being met. To those who have been paying to this debate, India’s dismal performance on the Global Hunger Index does not come as a surprise. Many people are cutting down on food and spending on other things instead. × For some years now, we have known that merely measuring daily spending adjusted for inflation is not a good way to estimate poverty, especially when nutrition is taken into consideration. What has been happening is that people are spending more money in real terms but that money is going to non-food necessities such as healthcare, education, transportation, and other services. To put it another way, incomes have risen slowly for the poor while the need to consume non-food items mentioned above has become more and more compelling. The result: many are cutting down on food and spending on other things instead. This much is known, indeed too well known. The question, as always, is what can be done about it. Here two recent ideas are worth exploring. One from the employment side and one from the consumption side: wage subsidies and universal basic services. Last week the BJP government in Gujarat announced an interesting policy measure as an electoral promise. In addition to promising investments of around INR 20,000 crore in the garment sector to create one lakh jobs it also promised to pay a sizeable portion of the wages of the newly hired workers for a period of five years. I have discussed in an earlier column, the idea that the government can subsidise wages in the private sector in order to raise incomes or stimulate employment. It has also been discussed in the context of an extension of the current MGNREGA program. The bigger picture is if the government offers various forms of capital subsidies (like tax exemptions, land, lower interest rates etc.) why not wage subsidies? Instead of giving people income grants and letting them purchase services in the market, the State should provide basic needs such as education, health, and housing free of cost. × The concept of universal basic services (UBS) has a long history but has recently been floated as an alternative to universal basic income (UBI) in developed countries. UBI has been discussed extensively in India as well (for e.g. see this year’s Economic Survey). The UBS proposal is that instead of giving people income grants and letting them purchase services in the market, the State should provide basic needs such as education, health, and housing free of cost. This is a generalisation of existing public provisioning via the Public Distribution System (PDS) and various other schemes. Of course many will object to such a program seeing in it a return to the “bad only days” of socialism and fiscal irresponsibility. The problem is that the “good new days” have been good only for a minority and this does not seem to be changing. If we take a look at the budgets of not only the poor but as much as half of the population, we are likely to find that the above-mentioned items account for most of the spending. Universal public health, education, and housing will go a long way in alleviating pressure on people’s budgets freeing up resources for better nutrition. Not only that it will give them much-needed room to take risks with employment, skill development as well as entrepreneurship. Further, provisioning of such services will create much-needed employment since these happen to be difficult to mechanise. Overall the decline in poverty numbers till 2011 (and most likely these have declined further by now, though we don’t have data), suggests that it is the time we stopped worrying purely about expenditure-based poverty lines and focused instead on providing basic services and raising incomes at the bottom.

Poverty in India: Measurement and eradication

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As COVID-19 creates 'new poor', here's how India is progressing to eradicate extreme poverty

Poverty in India: Measurement and eradication