Tuesday, 6 October 2015

Poverty | World Bank Report

  • Why in news?
    • According to the report — Ending Extreme Poverty and Sharing Prosperity: Progress and Policies - See more at: http://indianexpress.com/article/india/india-others/world-bank-report-electrification-in-rural-areas-has-changed-consumption-and-earnings/#sthash.FDDiGyrG.dpuf
      According to the report — Ending Extreme Poverty and Sharing Prosperity: Progress and Policies - See more at: http://indianexpress.com/article/india/india-others/world-bank-report-electrification-in-rural-areas-has-changed-consumption-and-earnings/#sthash.FDDiGyrG.dpuf
        Ending Extreme Poverty and Sharing Prosperity: Progress and Policies
      According to the report — Ending Extreme Poverty and Sharing Prosperity: Progress and Policies - See more at: http://indianexpress.com/article/india/india-others/world-bank-report-electrification-in-rural-areas-has-changed-consumption-and-earnings/#sthash.FDDiGyrG.dpuf
      According to the report — Ending Extreme Poverty and Sharing Prosperity: Progress and Policies - See more at: http://indianexpress.com/article/india/india-others/world-bank-report-electrification-in-rural-areas-has-changed-consumption-and-earnings/#sthash.FDDiGyrG.dpuf
      According to the report — Ending Extreme Poverty and Sharing Prosperity: Progress and Policies - See more at: http://indianexpress.com/article/india/india-others/world-bank-report-electrification-in-rural-areas-has-changed-consumption-and-earnings/#sthash.FDDiGyrG.dpuf
      According to the report — Ending Extreme Poverty and Sharing Prosperity: Progress and Policies - See more at: http://indianexpress.com/article/india/india-others/world-bank-report-electrification-in-rural-areas-has-changed-consumption-and-earnings/#sthash.FDDiGyrG.dpuf
      According to the report — Ending Extreme Poverty and Sharing Prosperity: Progress and Policies - See more at: http://indianexpress.com/article/india/india-others/world-bank-report-electrification-in-rural-areas-has-changed-consumption-and-earnings/#sthash.FDDiGyrG.dpuf
      According to the report — Ending Extreme Poverty and Sharing Prosperity: Progress and Policies - See more at: http://indianexpress.com/article/india/india-others/world-bank-report-electrification-in-rural-areas-has-changed-consumption-and-earnings/#sthash.FDDiGyrG.dpuf
      According to the report — Ending Extreme Poverty and Sharing Prosperity: Progress and Policies - See more at: http://indianexpress.com/article/india/india-others/world-bank-report-electrification-in-rural-areas-has-changed-consumption-and-earnings/#sthash.FDDiGyrG.dpuf
      According to the report — Ending Extreme Poverty and Sharing Prosperity: Progress and Policies - See more at: http://indianexpress.com/article/india/india-others/world-bank-report-electrification-in-rural-areas-has-changed-consumption-and-earnings/#sthash.FDDiGyrG.dpuf
      According to the report — Ending Extreme Poverty and Sharing Prosperity: Progress and Policies - See more at: http://indianexpress.com/article/india/india-others/world-bank-report-electrification-in-rural-areas-has-changed-consumption-and-earnings/#sthash.FDDiGyrG.dpuf
  • Key Take-aways:
    • the proportion of people living below the global poverty line in 2015 will fall to single digits — 9.6 per cent — down from 12.8 per cent in 2012. This is a first, ever since such data was calculated in 1990. 
    • One, the famous dollar-a-day poverty line (actually $1.25), prevalent since 2005, stands updated to nearly two dollars a day ($1.90 — based on 2011 price levels) to better reflect current realities. 
    • Two, the decline has happened despite the near-global slowdown of growth since the 2008 crisis. 
    • Three, notwithstanding the overall fall, poverty is getting increasingly concentrated in South Asia and sub-Saharan Africa. 
      •  For instance, despite the rapid alleviation of poverty over the past three decades, South Asia continues to be home to one-third of the world’s poor. 
        • In fact, as of 2012, India had the largest number of the world’s poor.
    •  The poverty rate in low-income countries averages 43% in 2012, compared to 19% in lower-middle-income countries. Yet lower middle-income countries are home to about half of the global poor, compared to a third for low-income countries
      * Part of the reason is that four nations with the largest populations were once classified as low-income but have moved into lower-middle-income category: China, India, Indonesia & Nigeria.
    • INDIA:
      • One, there is unequal progress across states when it comes to non-income dimensions of development. 
        • Data shows that it is easier to reduce income or monetary poverty, but multidimensional poverty is far more persistent. 
        • This underlines the increasingly important role of state governments when it comes to implementing poverty alleviation programmes. 
        • This is crucial because public provisioning of health and education, both in terms of the budget allocated as well as ground-level implementation, varies significantly across states. 
        • With states expected to fund more such activities from the increased devolution of tax funds, this aspect will assume importance. 
      • Two, the fall in poverty globally as well as in India is due to methodological reasons that will further fuel the ongoing debate on India’s domestic poverty-line calculations.
        • One is the way India measures poverty. 
          • The WB report has chosen a new method, wherein consumption expenditure is based on “modified mixed reference period” (or MMRP) against the Indian norm of “uniform reference period (URP)”. 
            • In URP - people over-estimate the expenditure - seems that they are not that poor - opposite to WB MMRP system 
              • So, in reality - India's poverty must be more than that being calculated using present method! This results in a lower poverty figure. 
              • The additional problem is that India started collecting MMRP-based data only since 2009-10 and so, there is no comparative data. It would be best to regard the latest numbers with some caution.
      • We are in botttom 10! - with CINI - China, India, Nigeria and Indonesia  
      • Capture2

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