A study by the United Nations Development Programme (UNDP) says that India’s low-income population is negligibly likely to slip into poverty due to a global spike in inflation; while people from different income groups in some European countries could be at risk.
The UNDP paper titled ‘Addressing the cost-of-living crisis in developing countries’ said that globally soaring food and energy prices could push up to 71 million people into poverty, with the Caspian Basin, the Balkans, and Sub-Saharan Africa (particularly in the Sahel) more vulnerable to the inflationary surge than other regions.
Among those countries likely facing high poverty impacts across all poverty lines are Armenia and Uzbekistan in the Caspian Basin; Burkina Faso, Ghana, Kenya, Rwanda and Sudan in Sub-Saharan Africa; Haiti in Latin America; and Pakistan and Sri Lanka in South Asia.
“In these countries, around 3 percent of the population, on average, could fall into poverty,” according to the study added.
FM Nirmala Sitharaman said the steps taken by the government over the last three years such as cash transfers and free food grains for the poor have helped blunt the edge of inflation risk for the poor.
“A recent UNDP report ‘Addressing the Cost-of-Living Crisis in Developing Countries’ shows that inflation will have only a negligible impact on poverty in India, adding that targeted transfers (such as what India has been doing) help poorer households cope with price spikes,” said FM in a series of tweets on Tuesday.
The FM also highlighted that the report recommended that targeted and time-bound cash transfers are the most effective policy tool to address the impacts—steps that, she added, were already taken by the government.
“The report shows inflation in India will not push anybody below the lower poverty line of $1.9/day, while only 0.02% & 0.04% of the population will go below higher poverty lines of $3.3/day & $5.5/day, respectively,” the FM added.
