News Highlight,
A recent World Bank report, titled “Correcting Course”, captures the impact of the COVID-19 pandemic on global poverty.
Key Takeaway
- As per the report, the number of people living in extreme poverty rose by seven crore million in 2020, as the global poverty rate rose from 8.4% in 2019 to 9.3% in 2020.
- This is the first time the poverty rate has increased in two decades.
Poverty
- It is a state or condition in which a person or community lacks the financial resources and essentials for a minimum standard of living.
Causes of Poverty
- Population Explosion:
- The world’s population is expected to increase by 2 billion persons in the next 30 years, from 7.7 billion currently to 9.7 billion in 2050 and could peak at nearly 11 billion around 2100.
- Inefficient Resource utilisation:
- There is underemployment and disguised unemployment, particularly in the farming sector. This has resulted in low agricultural output and a dip in the standard of living.
- Low Agricultural Productivity:
- A significant reason for poverty is the low productivity in the agriculture sector. The reason for low productivity is manifold. Chiefly, it is because of fragmented and subdivided land holdings, lack of capital, illiteracy about new technologies in farming, the use of traditional methods of cultivation, wastage during storage, etc.
- Colonial Exploitation:
- The British colonisation and rule over India for about two centuries de-industrialised India by ruining its traditional handicrafts and textile industries. Colonial Policies transformed India into a mere raw-material producer for European industries.
- Climatic Factors:
- Most of India’s poor belong to the states of Bihar, Chhattisgarh, Odisha, Jharkhand, etc. Natural calamities such as frequent floods, disasters, earthquakes and cyclones cause heavy damage to agriculture in these states.
Poverty alleviation initiatives
- MGNREGA:
- Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) 2005.
- The Act provides 100 days of assured employment annually to every rural household.
- PMGKAY:
- Pradhan Mantri Garib Kalyan Anna Yojana.
- It has provided food security to the poor, needy and vulnerable households/beneficiaries so that they do not suffer because of the non-availability of adequate foodgrains.
- Food for Work Programme:
- It aims at enhancing food security through wage employment. Food grains are supplied to states free of cost; however, the supply of food grains from the Food Corporation of India (FCI) godowns has been slow.
Way forward
- Social mobilisation:
- Poverty can effectively be eradicated only when the poor start contributing to growth through active involvement in the growth process.
- This is possible through social mobilisation, encouraging poor people to participate and get them empowered.
- Targeted subsidies:
- The targeted subsidies would help to waste public money and spend subsidies to deserve sections of the people.
- Public investment:
- To build resilience and long-term infrastructure, which in turn help to improve economic and social development.
- Revenue mobilisation:
- The government should take measures to avoid tax evasion and improve tax collection mechanisms.
- Social investment:
- The government has to raise the spending on health and education. It helps to build strong and resilient social capital.
Content Source: The Hindu