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Modi govt’s anna yojana helped curb rise in extreme poverty during pandemic, says IMF paper

New Delhi: The Centre’s coverage of offering free meals grains to 80 crore households during the pandemic prevented India from slipping into extreme poverty because it withstood one of many largest revenue shocks globally, a working paper by the International Monetary Fund mentioned. It has additionally advised a revision in India’s poverty line demarcation, because it progresses into the class of a center revenue nation.

The free meals grains was distributed as a part of the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY), launched in March 2020, beneath which the Centre offered 5 kilograms of meals grains each month to every beneficiary household at no cost. This was in addition to the traditional quota distributed beneath the National Food Security Act (NFSA), which is offered at a subsidised fee of Rs 2-3 per kg.

Last month, the Union Cabinet prolonged the PMGKAY programme until September 2022, at an extra estimated price of Rs 80,000 to the exchequer.

“The program provided insurance to the poor and prevented an increase in the prevalence of extreme poverty in India. This illustrates the robustness of India’s social safety architecture as it withstood one of the world’s biggest exogenous income shocks,” acknowledged the IMF paper, launched on 5 April.

Extreme poverty is outlined by the United Nations as “a condition characterised by severe deprivation of basic human needs, including food, safe drinking water, sanitation facilities, health, shelter, education and information. It depends not only on income, but also on access to services”.

The IMF paper added that it’s a cheap assumption that the free meals grain prevented enhance in prevalence of extreme poverty in India, provided that households may at all times promote the subsidised meals grains in the open market.

The paper has been authored by Surjit Bhalla, govt director on the IMF for India, Bangladesh, Bhutan and Sri Lanka and former part-time member of the Prime Minister’s Economic Advisory Council (PMEAC), New York-based economist Karan Bhasin, and former chief financial adviser Arvind Virmani.

According to the authors, the extreme poverty in India was as little as 0.8 per cent of the inhabitants in the pre-pandemic yr of 2019, and meals transfers have been instrumental in guaranteeing that it remained at that low degree even in the pandemic yr of 2020.

Also learn: Code pink on malnutrition: Why half the children in 3 poorest UP districts are stunted, many ‘wasted’

Need for a brand new official poverty line

The working paper additionally acknowledged that India ought to revise its poverty line demarcation to an revenue of $3.2 per particular person per day, from the present $1.9 per particular person per day, because it strikes from being a low-income nation to a middle-income nation.

“The low level of extreme poverty — around 0.8 per cent (of population) in both 2019 (0.76 per cent) and 2020 (0.86 per cent) — is suggestive of the need for the official poverty line to now be $3.2 in purchasing power parity (PPP),” it mentioned.

The PPP worth of a greenback is totally different from the market worth. According to knowledge with the Organisation for Economic Co-operation and Development, a greenback in PPP phrases is at the moment valued at Rs 23.30, towards Rs 15.55 in 2011.

Going by the IMF working paper’s estimate of the nation’s poverty line, India can fairly declare that earlier than the pandemic it was on the verge of eliminating extreme poverty.

The knowledge utilized by the authors in the working paper embody the buyer spending survey of 2011-12 by the National Statistical Office for its calculations, as the most recent survey of 2017-18 was junked by the federal government over alleged knowledge high quality points. The poverty figures have been derived by utilizing the actual gross state home product (GSDP) progress fee. To calculate the poverty figures past 2011-12, the authors have used the NSO’s knowledge on personal remaining consumption spending.

(Edited by Poulomi Banerjee)

Also learn: India is much less poor & extra fed, however almost as unequal as final yr, Niti Aayog report reveals

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