The International Monetary Fund (IMF) has released a paper, “Pandemic, Poverty, and Inequality: Evidence from India”, which said that extreme poverty was below one per cent in the pre pandemic year 2019 and Prime Minister Narendra Modi’s food security project — the Pradhan Mantri Garib Kalyan Anna Yojana ( PMGKY) — has prevented a rise in extreme poverty levels in India during the Covid-19 pandemic. Under the extended PMGKAY, each beneficiary will get an additional 5 kg free ration per person per month in addition to the normal quota of foodgrains under the National Food Security Act.
According to the IMF paper titled ‘Pandemic, Poverty and Inequality: Evidence from India’, authored by Surjit Bhalla, Karan Bhasin and Arvind Virmani , found that extreme poverty in the country was less than 1 per cent in the pre-pandemic year 2019, and food transfers were instrumental in ensuring that it remained at that low level in the pandemic year 2020.
“Extreme poverty was as low as 0.8 per cent in the pre-pandemic year 2019, and food transfers were instrumental in ensuring that it remained at that low level in pandemic year 2020,” the paper said adding that “Extreme poverty (less than PPP$ 1.9 per person per day) in India is less than one per cent in 2019 and it remained at that level even during the pandemic year 2020”.
Prime Minister Narendra Modi has extended the PMGKY by six months till September 2022. The government has spent approximately Rs 2.60 lakh crore so far on the scheme and another Rs 80,000 crore will be spent over the next six months till September 2022, taking the total expenditure under PMGKAY to nearly Rs 3.40 lakh crore.
It noted that it remained at the same level even during the pandemic year 2020. The report noted that the low level of extreme poverty in two consecutive years, including the pandemic year, could be considered the elimination of extreme poverty. Furthermore, the study found that subsidy adjustments on poverty are striking. The Gini Coefficient -- used to measure real inequality declined to near its lowest level reached in the last forty years. It was .284 in 1993/94 and in 2020-21 it reached .292. The paper attributed this to the incorporation of food subsidies into the calculation of poverty.
“Extreme poverty has stayed below 1 per cent for the last three years," the study said.