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New Delhi, Along with the sharp decline in poverty in <keyword id="19895063" type="General" weightage="20" keywordseo="india" source="keywords">India</keyword>, there has also been a marked reduction in the rural-urban income divide in the country, according to an SBI Research analysis of a Consumer Expenditure Survey released on Tuesday. Rural Poverty has staged a significant 440-basis point decline since 2018-19 and <keyword id="20742154" type="General" weightage="20" keywordseo="urban-poverty" source="keywords">Urban Poverty</keyword> a 170-basis point decline post-pandemic, which shows that the government initiatives for promoting the welfare of the bottom of the pyramid are having a significant beneficial impact on rural livelihood, the report states. Rural Poverty is now at 7.2 per cent (25.7 per cent in 2011-12 while <keyword id="19945793" type="General" weightage="20" keywordseo="urban" source="keywords">Urban</keyword> Poverty is at 4.6 per cent (13.7 per cent in 2011-12), official data show. The report further states that India is becoming more aspirational as indicated by the increasing share of discretionary consumption (like spending on beverages, intoxicants, entertainment, durable goods, etc.) in rural and urban areas. The speed of aspiration is swifter in rural areas as compared to urban areas The SBI report states that the difference between rural and urban monthly per capita consumption expenditure (MPCE) is now at 71.2 per cent, a rapid decline from 88.2 per cent in 2009-10. Around 30 per cent of the Rural MPCE is explained mainly due to steps taken by the government in terms of DBT transfers, investments in building of rural infrastructures, augmenting farmer's income, all together improving the rural livelihood significantly. Enhanced physical infrastructure is enabling two-way rural-urban mobility, which is the prime reason for the incrementally shrinking horizontal income gap between the rural and urban landscape and the vertical income gap within rural Income classes, according to the SBI report. The states once considered laggards are showing the maximum improvement in rural and urban gap. States like Bihar, <keyword id="19894922" type="General" weightage="20" keywordseo="uttar-pradesh" source="keywords">Uttar Pradesh</keyword>, Madhya Pradesh are showing increasingly the impact of these factors, the report adds. The bottom half of the rural pyramid are now having consumption patterns mostly converging to urban counterparts. The report also states that revised MPCE weights in CPI computation could help India real GDP growth for FY24 to top 7.5 per cent. Other highlights: *Rural and Urban consumption are growing, on an average, at nearly the same growth rate (2.66 per cent for rural, 2.59 per cent for Urban) across classes. Using the statistical equivalent of <keyword id="20744250" type="General" weightage="20" keywordseo="gini-coefficient" source="keywords">Gini Coefficient</keyword>, Horizontal Consumption Inequality between Rural and Urban across fractiles has declined from 0.560 to 0.475 *Urban Rural gap as a percentage of rural consumption is on a declining trend. It has declined from 90.8 per cent in 2004-05 to 71.2 per cent in 2022-23 and we believe, is projected to further decrease to 65.1 per cent in 2029-30 *In the lowest segment, urban consumption is only 46 per cent more dissimilar than the rural counterpart. Across fractile classes, urban consumption is only 68 per cent more dissimilar than rural counterpart, a number much less than the all India average. This indicates the bottom half of the rural pyramid are now having MPCE patterns mostly converging to Urban counterparts.

India's rural-urban income gap declines sharply amid fall in poverty level: SBI Report

“Ye le beta, humare khaandani sone ke gehne. Ise girvi rakhva de, shayad kuch paise aa jaye ghar main.” How many times have we seen similar dialogues repeat itself in Bollywood films of the 70s and 80s—abject poverty and a frail-looking old mother pleading to her son to pawn the family’s heirloom gold ornaments to a jeweller, all to get a few bucks? Well, if you’d ask that son in 2024, he’d rather hit the loan button on his <keyword id="105386" type="General" weightage="20" keywordseo="Demat-account" source="Orion">Demat account</keyword> than pawn his mother’s gold jewellery. Given how Indians are rapidly resorting to taking loans against their investments in shares and mutual funds, these might as well be a cherished family heirloom in today’s time. Fair warning though; it's not as if gold and loans against it are going down in India’s lending scene. It's very much the opposite, shining brighter than ever! The secured loan category is having its time in the spotlight, and people are certainly looking beyond land and property to get their hands on some extra monies! But what is funding the steep rise behind these loans? And are they as failsafe and secure as they’re made out to be? We decode for you in this week’s Simply Put. <h2 style="margin-bottom: 0.7em; line-height: 1.3; color: rgb(0, 0, 0); font-size: 24px; background: 0px 0px; text-rendering: optimizelegibility;">The great Indian pawning party</h2>Pawning one’s gold has been, by far, the OG Indian financial move to get a loan. That continues well into 2024, and apparently, more so when India decides to wed and celebrate! Data from <keyword id="30067" type="General" weightage="20" keywordseo="RBI" source="Orion">RBI</keyword> suggests that the outstanding amount on gold loans has swelled from Rs 85,009 crore in September 2022 to Rs 1,47,081 crore in September 2024. It looks like Gold took the motto of rise and shine too seriously! Table 1: Growth in gold loans <table class="redcator-table-advance" style="border-width: initial; border-style: none; background-color: rgb(255, 255, 255); font-size: 16px; line-height: 1.6em; box-shadow: none; width: 468pt; font-family: Merriweather; table-layout: fixed; padding-bottom: 10px !important; background-image: inherit !important; background-position: inherit !important; background-size: inherit !important; background-repeat: inherit !important; background-attachment: inherit !important; background-origin: inherit !important; background-clip: inherit !important;"></colgroup><tbody><tr><td style="border-width: 1pt; border-style: solid; border-color: rgb(0, 0, 0); padding: 5pt; font-size: 16px; vertical-align: top; overflow: hidden; overflow-wrap: break-word;">Year </td><td style="border-width: 1pt; border-style: solid; border-color: rgb(0, 0, 0); padding: 5pt; font-size: 16px; vertical-align: top; overflow: hidden; overflow-wrap: break-word;">Amount (In Rs crore) </td></tr><tr><td style="border-width: 1pt; border-style: solid; border-color: rgb(0, 0, 0); padding: 5pt; font-size: 16px; vertical-align: top; overflow: hidden; overflow-wrap: break-word;">September 2022 </td><td style="border-width: 1pt; border-style: solid; border-color: rgb(0, 0, 0); padding: 5pt; font-size: 16px; vertical-align: top; overflow: hidden; overflow-wrap: break-word;">85,009 </td></tr><tr><td style="border-width: 1pt; border-style: solid; border-color: rgb(0, 0, 0); padding: 5pt; font-size: 16px; vertical-align: top; overflow: hidden; overflow-wrap: break-word;">March 2023 </td><td style="border-width: 1pt; border-style: solid; border-color: rgb(0, 0, 0); padding: 5pt; font-size: 16px; vertical-align: top; overflow: hidden; overflow-wrap: break-word;">89,370 </td></tr><tr><td style="border-width: 1pt; border-style: solid; border-color: rgb(0, 0, 0); padding: 5pt; font-size: 16px; vertical-align: top; overflow: hidden; overflow-wrap: break-word;">September 2023 </td><td style="border-width: 1pt; border-style: solid; border-color: rgb(0, 0, 0); padding: 5pt; font-size: 16px; vertical-align: top; overflow: hidden; overflow-wrap: break-word;">97,426 </td></tr><tr><td style="border-width: 1pt; border-style: solid; border-color: rgb(0, 0, 0); padding: 5pt; font-size: 16px; vertical-align: top; overflow: hidden; overflow-wrap: break-word;">March 2024 </td><td style="border-width: 1pt; border-style: solid; border-color: rgb(0, 0, 0); padding: 5pt; font-size: 16px; vertical-align: top; overflow: hidden; overflow-wrap: break-word;">1,02,562 </td></tr><tr><td style="border-width: 1pt; border-style: solid; border-color: rgb(0, 0, 0); padding: 5pt; font-size: 16px; vertical-align: top; overflow: hidden; overflow-wrap: break-word;">September 2024 </td><td style="border-width: 1pt; border-style: solid; border-color: rgb(0, 0, 0); padding: 5pt; font-size: 16px; vertical-align: top; overflow: hidden; overflow-wrap: break-word;">1,47,081 </td></tr></tbody><tbody></tbody><tbody></tbody><tbody></tbody><tbody></tbody><tbody></tbody><tbody></tbody></table> Source: RBI data While the world continues to be riled up in multiple geopolitical crises in 2024, gold has been making merry of these tough times. Thus far this year, <keyword id="3886593" type="General" weightage="20" keywordseo="domestic-gold" source="Orion">domestic gold</keyword> prices have grown by 23%, outperforming benchmark indices like Nifty and Sensex by a mile, which have gone up by 9.85% and 8.86%, respectively. The growth in gold loan disbursal rates month on month this year could also put Nifty and Sensex’s growth to shame. In just September 2024, gold loans grew an astounding 51%, up from 40.9% in August, 30.5% in June, and just 14.8% in March. <h2 style="margin-bottom: 0.7em; line-height: 1.3; color: rgb(0, 0, 0); font-size: 24px; background: 0px 0px; text-rendering: optimizelegibility;">Hey, wait up for me, says LAS</h2>In lockstep with the elder, gold loan sibling, advances against shares and bonds have also been inching up since 2022. Data from RBI (Reserve Bank of India) notes that as of September 2022, the outstanding quantum of loans that were taken against shares (LAS) and bonds stood at Rs 7,397.94 crores. This inched up to Rs 7,764 crore in September 2023. Come 2024, and it looked like this was LAS’ time to shine. Loans swiftly skyrocketed, with outstanding loans in this category going up from Rs 8,492 crore in March 2022 to a staggering Rs 9,546 crore at the end of September 2024. Naturally, the smoke of LAS has its fire in the record inflows that Indians are pouring into the stock market and mutual funds month on month. Per AMFI (<keyword id="134904" type="General" weightage="20" keywordseo="Association-of-Mutual-Funds-in-India" source="Orion">Association of Mutual Funds in India</keyword>), the net AUM (assets under management) of India’s mutual fund industry grew to Rs 67,25,614.61 crores in October 2024, up from Rs 67,09,259.24 crores in September 2024. Even the number of retail mutual fund folios, which include equity, hybrid, and solution-oriented mutual funds, burgeoned to 17,23,52,296 in October, as compared to 16,81,61,366 in September. The same goes for stock investments in India, where the number of new demat accounts that are added every month just simply refuses to climb down. As of last month, total demat accounts in the country stood at 17.9 crore, which is more than the entire population of full-fledged nations like Japan (12.45 crore), Russia (14.38 crore), and Bangladesh (17.3 crore). In fact, since February this year, the monthly growth of LAS has been hitting double digits. From 11.3% in March to 21.6% in May to 26.8% in August, growth in LAS has been exceptional, hitting 22.9% in September this year. For context, monthly growth in the LAS segment was at a mere 5% in September 2023. <h2 style="margin-bottom: 0.7em; line-height: 1.3; color: rgb(0, 0, 0); font-size: 24px; background: 0px 0px; text-rendering: optimizelegibility;">What's driving the growth?</h2>It's a win-win for both the bank and the customer. Customers love them because LAS is available at a lower interest rate compared to unsecured personal loans. You can get a loan at an interest rate of anywhere between 9 and 12% by pledging your gold, MF units, or shares. Compare this to over 10-28% rates, which is the range where unsecured personal loans charge interest. Banks love <keyword id="827883" type="General" weightage="100" keywordseo="Secured-Loans" source="Orion">secured loans</keyword> since they are well-secured. In case you default on paying back, the bank can sell off your gold, shares, or mutual fund units to recover the amount. This takes a lot of stress off the banks, which are already dealing with secured loans’ riskier sibling-<keyword id="947940" type="General" weightage="20" keywordseo="unsecured-lending" source="Orion">unsecured lending</keyword>. High NPAs (non-performing assets) and non-payments in the unsecured borrowing space have already put RBI on red alert, which is why the apex bank is tightening the screws on unsecured lending, which was well on its way to becoming a ticking time bomb. As a result, credit growth has moderated to 12.8% YoY in October, as against the 19.3% rise recorded in the year-ago period. Yet it's not like the banks won't feel the heat. Analysts at Nomura note that <keyword id="23954457" type="General" weightage="20" keywordseo="personal-loan-delinquencies" source="Orion">personal loan delinquencies</keyword> in India that have been overdue by over 90 days rose to 5.1% in the last financial year, as opposed to just 3.9% in the year prior. <h2 style="margin-bottom: 0.7em; line-height: 1.3; color: rgb(0, 0, 0); font-size: 24px; background: 0px 0px; text-rendering: optimizelegibility;">How does it work?</h2>Both these loans work on a similar principle: Your <keyword id="857141" type="General" weightage="20" keywordseo="loan-amount" source="Orion">loan amount</keyword> is equal to a certain percentage of the actual market value of your asset. This is known as the LTV (loan-to-value ratio). In the case of gold and debt mutual funds, RBI mandates that this LTV be about 75-80%. So, for every Rs 100 of gold or debt mutual fund unit you pledge, your maximum loan amount cannot exceed Rs 80. If you pledge gold, which has a market value of Rs 10 lakh, you can take a loan of up to Rs 8,00,000. In the case of shares and mutual fund units, this limit is set at 50%. So, your shares worth Rs 5,00,000 can only get you a loan worth Rs 2,50,000. But the bright side? You can continue earning returns on your investments and pay interest only on the amount you use, since this loan works as an overdraft facility. <h2 style="margin-bottom: 0.7em; line-height: 1.3; color: rgb(0, 0, 0); font-size: 24px; background: 0px 0px; text-rendering: optimizelegibility;">Super safe, you say?</h2>Interest rates on both of these loans are very much dependent on the market value of the asset, which wildly fluctuates on a day-to-day basis. So, in case the value of your asset falls, you’ll have to keep a margin or more of the same asset in order to continue with the loan and maintain the LTV balance. Failure to do so could mean the bank can even sell off your asset. Says financial planner Nema Chaya Buch. “Yes, LAS offers easy availability of funds since these loans come with a lower interest rate as compared to personal loans. Also, you continue to earn average returns of 10–13% on your equity investments. But the downside is, in case of emergency, those pledged securities cannot be sold. Also, if the equity market goes down, then the bank may ask for additional collateral. Raghvendra Nath, MD, Ladderup Wealth Management notes that taking a LAS is best when the value of your securities has appreciated significantly. “This allows you to maximize the loan amount based on your collateral while also addressing financial needs without having to liquidate your investment portfolio. However, there are notable disadvantages to consider. The market risk is significant; a substantial decline in market value could lead to margin calls, which may incur fees and charges if there are delays or prepayments, ultimately increasing the effective cost of borrowing. Furthermore, failure to make timely payments could result in the loss of your assets.”. Umesh Mohanan, ED &amp; CEO, of Indel Money, cautions that one should have a sufficient quantity of gold to get the loan amount one wants. "According to the current RBI rules, the loan applicant/borrower can draw up to 75% of the total market value of the collateral/gold jewellery. So, always carry a sufficient quantity of gold based on one’s loan requirement. “The most important thing is that the valuation of the gold depends on the purity of the gold. If the borrower pledges gold with higher purity, such as 24 carats or 22 carats, he will get the maximum loan amount," he adds.

Secured Loans 2.0 — why more and more Indians are turning to gold, shares and mutual funds to get loans

<ul class="summary-list"><li><keyword id="15219879" type="General" weightage="20" keywordseo="JPMorgan-CEO" source="Orion">JPMorgan CEO</keyword> <keyword id="20214240" type="General" weightage="20" keywordseo="Jamie-Dimon" source="keywords">Jamie Dimon</keyword> in April said Narendra <keyword id="19899684" type="General" weightage="20" keywordseo="Modi" source="keywords">Modi</keyword> had done "an unbelievable job" leading India.</li><li>But effusive praise from <keyword id="22000749" type="General" weightage="20" keywordseo="business-titans" source="keywords">business titans</keyword> didn't persuade voters to give Modi the victory he wanted.</li><li>Modi will now have to govern with allies, and the surprise result hit the Indian stock market.</li></ul>In a major upset, Indian Prime Minister Narendra Modi <a href="https://www.businessinsider.com/indian-election-results-shocking-blow-narendra-modi-2024-6" target="_blank">lost his absolute majority in parliament</a> on Tuesday. But, back when most expected Modi to cruise to a third big election victory, Western business titans lined up to praise him for transforming what is set to become the world's third-largest economy by 2027. His pro-growth, pro-business policies have been a huge draw for tech giants like <a href="https://www.businessinsider.com/apple-tim-cook-obsessed-india-consumers-iphone-2023-7" target="_blank">Apple</a> and <a href="https://www.businessinsider.com/tesla-would-spur-growth-in-india-ev-market-rival-says-2024-4" target="_blank">Tesla</a>, both of which have signaled intentions to expand operations there. In April, <keyword id="19967624" type="General" weightage="20" keywordseo="JPMorgan" source="keywords" meta.keywordsubtype="org" meta.entityname="JPMorgan" meta.hostid="261" meta.entityid="JPMorgan">JPMorgan</keyword> CEO <a href="https://www.businessinsider.com/jamie-dimon-career" target="_blank">Jamie Dimon</a> effusively praised the Indian leader during an event at The Economic Club of New York. "Modi has done an unbelievable job in India. I know the liberal press here, they beat the hell out of him," Dimon said. "He's taken 400 million people out of poverty." Dimon also said he thought US officials needed to stop "lecturing" Modi on how to run India and instead start taking lessons from the world's most populous democracy. "They've got an unbelievable education system. Unbelievable infrastructure. They're lifting up that whole country because this one man is tough," Dimon said. "He's breaking down some of the bureaucracy," he added. "And we need a little bit more of that here." Representatives for Dimon didn't immediately respond to a request for comment on the election result sent outside regular business hours. Dimon isn't alone. <a href="https://x.com/tim_cook/status/1648684750029340673" target="_blank">Apple CEO Tim Cook met Modi in April of last year</a>, saying the company shared his "vision of the positive impact technology can make on India's future." "India is an incredibly exciting market. It's a major focus for us," Cook said in a November <a href="https://www.bloomberg.com/news/videos/2023-05-05/tim-cook-india-is-an-incredibly-exciting-market-video" target="_blank">earnings call</a>. "I was just there and the dynamism in the market, the vibrancy is unbelievable." Without an absolute majority, <a href="https://www.businessinsider.com/narendra-modi-win-bjp-india-election-explained-2024-6" target="_blank">Modi will rely on the support of smaller parties, who could oust him if they switch allegiance</a>. News of the shrinking majority hit the Indian stock market on Tuesday — it <a href="https://markets.businessinsider.com/news/etf/indian-stocks-tumble-the-most-since-march-2020-with-modi-s-party-set-to-lose-majority-1033450216" target="_blank">registered its most significant daily drop</a> since March 2020. However, experts say the electoral surprise is unlikely to unravel his past reforms. "This surprise creates political and policy uncertainties that will have at least short-term consequences," said <a href="https://www.atlanticcouncil.org/blogs/new-atlanticist/experts-react-modi-loses-ground-electoral-surprise/" target="_blank">Jeff Lande</a>, a nonresident fellow at the Atlantic Council's South Asia Center. "A reversal of the sort of investments and capital expenditure that the government has advanced in recent years, in favor of a return to subsidies, protectionism, and welfare programs, is unlikely," he continued. It is true that his decadelong reign as India's prime minister has coincided with a decline in the country's poverty levels: Figures from the <a href="https://ourworldindata.org/grapher/share-of-population-in-extreme-poverty?tab=chart&amp;country=~IND" target="_blank">World Bank</a> indicate the share of its population living in extreme poverty dropped to 12.9% in 2021 from 18.8% in 2014. Some of Modi's critics, however, may argue that his track record in economic policymaking has been uneven. In October, India's unemployment rate hit 10.1%, per the <a href="https://www.cmie.com/kommon/bin/sr.php?kall=warticle&amp;dt=20231103192154&amp;msec=053" target="_blank">Centre for Monitoring Indian Economy</a>. That is the first time the country's jobless rate has exceeded 10% since the COVID-19 pandemic. "Growth has been good, but it has to be set in perspective," Raghuram Rajan, a former governor of the Reserve Bank of India, told the <a href="https://www.ft.com/content/8299d318-7c35-49a0-9a9a-b8e5abeba7be" target="_blank">Financial Times</a> in January.

Business titans like Jamie Dimon think Modi is great for India. It didn't convince voters.

<ul><li>The pandemic created 573 <keyword id="9858714" type="General" weightage="20" keywordseo="new-billionaires" source="Orion">new billionaires</keyword> at the jet rate speed of — one every 30 hours.</li><li>Every 33 hours, a million crashed into <keyword id="591923" type="General" weightage="20" keywordseo="extreme-poverty" source="Orion">extreme poverty</keyword> during the pandemic.</li><li>“The super-rich have rigged the system with impunity for decades and they are now reaping the benefits,” said Gabriela Bucher, executive director of <keyword id="226811" type="General" weightage="80" keywordseo="oxfam-international" source="Orion">Oxfam International</keyword>.</li><li>In East Africa, one person dies of hunger every minute.</li></ul>The income of 99% of humans fell because of COVID-19, but the rest 1% is doing much better than ever. The pandemic created 573 new billionaires at the jet rate speed of — one every 30 hours. On the darker side, a million people crashed into extreme poverty every 33 hours. It’s much expected as 125 million of jobs were lost in 2021. <cmsannotation type="cmsannotation" annotationid="Trillions of injected cash find their way into the billionaire bank vaults" comment="subhead" text="Trillions of injected cash find their way into the billionaire bank vaults">Trillions of injected cash find their way into the billionaire bank vaults</cmsannotation> <div type="image" title="Richest and the poors" msid="91734702" hostid="261"></div> The total wealth of the world’s billionaires is now almost equal to 13.9% of global GDP — a three-fold jump from a mere 4.4% in 2000. The report also said that the wealth of billionaires has risen more in the first 24 months of COVID-19 than in the last 23 years combined. “Billionaires’ fortunes have not increased because they are now smarter or working harder. Workers are working harder, for less pay and in worse conditions. The super-rich have rigged the system with impunity for decades and they are now reaping the benefits,” said Gabriela Bucher, executive director of Oxfam International. Most of this wealth increase came from the trillions of dollars that the governments injected into the world economy to tackle the pandemic and avoid an economic collapse. The side effect however was that it dramatically drove up asset prices, and with this the net worth of billionaires and the asset-owning classes. “They have seized a shocking amount of the world’s wealth as a result of privatization and monopolies, gutting regulation and workers’ rights while stashing their cash in tax havens — all with the complicity of governments,” said Bucher. <cmsannotation type="cmsannotation" annotationid="Hunger deaths, missing meals and overdue bills await the poor" comment="subhead" text="Hunger deaths, missing meals and overdue bills await the poor">Hunger deaths, missing meals and overdue bills await the poor</cmsannotation> <div type="image" title="Hunger missing meals" msid="91734688" hostid="261"></div> The income of the poor saw a steep decline of 40% during the pandemic, which was 6.7% lower than the pre-pandemic projections. In fact it is leading to hunger deaths especially in East Africa, where one person dies of hunger every minute. “Millions are skipping meals, turning off the heating, falling behind on bills and wondering what they can possibly do next to survive. This grotesque inequality is breaking the bonds that hold us together as humanity. It is divisive, corrosive and dangerous,” she added. According to Oxfam estimates, it would take 112 years for an average person in the bottom 50% to make equivalent to someone in the top 1% makes in a year. The richest 10 men have greater wealth than the poorest 40% of humanity combined. These billionaires are collectively worth $12.7 trillion – a real-term increase of $3.78 trillion (42%) during the pandemic, the report said. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/international/news/not-just-india-many-countries-are-protecting-their-wheat-to-keep-daily-bread-affordable/articleshow/91733019.cms">Not just India, many countries are protecting their wheat to keep daily bread, affordable</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/india/news/it-giant-infosys-reappoints-salil-parekh-as-ceo-and-md-for-next-five-years/articleshow/91734316.cms">IT giant Infosys reappoints Salil Parekh as CEO and MD for next five years</a>

Billionaire wealth rose more in 2 years than in the last 23 years combined

<keyword id="3658" type="LOCATION" weightage="20" keywordseo="India">India</keyword>'s economy has bounced back amazingly from the COVID-19 pandemic and nationwide lockdown over the last one year, but it is not out of the woods yet, according to the <keyword id="6354424" type="COMPANY" weightage="20" keywordseo="world-bank">World Bank</keyword>, which in its latest report has predicted that the country's real GDP growth for fiscal year 21/22 could range from 7.5 to 12.5 per cent. The Washington-based global lender, in its latest South Asia Economic Focus report released ahead of the annual Spring meeting of the World Bank and the <keyword id="6366068" type="COMPANY" weightage="20" keywordseo="international-monetary-fund">International Monetary Fund</keyword> (IMF), said that the economy was already slowing when the COVID-19 pandemic unfolded. After reaching 8.3 per cent in FY17, growth decelerated to 4.0 per cent in <keyword id="2708116" type="LOCATION" weightage="20" keywordseo="FY20">FY20</keyword>, it said. The slowdown was caused by a <keyword id="6354942" type="UNKNOWN" weightage="20" keywordseo="decline">decline</keyword> in private consumption growth and shocks to the financial sector (the collapse of a large non-bank finance institution), which compounded pre-existing weaknesses in investment, it said. Given the significant uncertainty pertaining to both epidemiological and policy developments, the real GDP growth for FY21/22 can range from 7.5 to 12.5 per cent, depending on how the ongoing vaccination campaign proceeds, whether new restrictions to mobility are required, and how quickly the world economy recovers, the World Bank said. "It is amazing how far India has come compared to a year ago. If you think a year ago, how deep the recession was... unprecedented declines in activity of 30 to 40 per cent, no clarity about vaccines, <keyword id="11020750" type="UNKNOWN" weightage="20" keywordseo="huge-uncertainty">huge uncertainty</keyword> about the disease. And then if you compare it now, India is bouncing back, has opened up many of the activities, started vaccination and is leading in the production of vaccination," Hans Timmer, World Bank Chief Economist for the South Asia Region, told in an interview. However, the situation is still incredibly challenging, both on the pandemic side with the flare up that is being experienced now. It is an enormous challenge to vaccinate everybody in India, the official said. "Most of the people underestimate the challenge," he said. On the economic side, Timmer said that even with the rebound and there is uncertainty here about the numbers, but it basically means that over two years there was no growth in India and there might well have been over two years, a decline in per capita income. "That's such a difference with what India was accustomed to. And it means that there are still many parts of the economy that have not recovered or have not fared as well as they would have without a pandemic. There is a huge concern about the financial markets," Timmer said. "As economic activity normalises, domestically and in key export markets, the current account is expected to return to mild deficits (around 1 per cent in FY22 and FY23) and capital inflows are projected by continued accommodative monetary policy and abundant international liquidity conditions," the report said. Noting that the COVID-19 shock will lead to a long-lasting inflexion in India's fiscal trajectory, the report said that the general government deficit is expected to remain above 10 per cent of GDP until FY22. As a result, public debt is projected to peak at almost 90 per cent of GDP in FY21 before declining gradually thereafter. As growth resumes and the labour market prospects improve, poverty reduction is expected to return to its pre-pandemic trajectory. The poverty rate (at the USD 1.90 line) is projected to return to pre-pandemic levels in FY22, falling within 6 and 9 per cent, and fall further to between 4 and 7 per cent by FY24, the World Bank said. The Indian economy, Timmer said, has bounced back from the initial enormous hit. "It has bounced back even quicker than we initially thought. The availability of vaccines helped a lot there. That made it possible to open up more and in general to improve confidence in the economy. "If you have no further deterioration or fall back then, that means that the economy this year would grow around nine per cent. With some additional growth you are in double digits. That's the positive story," Timmer said, adding that there is also the uncertainty. India also has the advantage as compared to some of the other countries that it has foreign direct investment inflows. "(This) probably has to do also with the geopolitical changes in the world economy... investors moving away from China and looking at India. That is an advantage, but you don't see very strong investments, you see some first signs of domestic investments recovering, that is still an uncertain point," Timmer said. Responding to a question, Timmer said it is "impressive" how quickly the Indian government came up with relief efforts including the transfer of money, measures allowing companies to forego debt service. "Given the difficult situation, I think that was very impressive. At the same time, it was not enough because, and that's one of the lessons of the crisis. "There are so many people and so many, very small companies that are really difficult to reach, and you need a more comprehensive overhaul of the whole system to make the support a lot more universal," Timmer added. According to officials, India has so far registered 1,20,95,855 COVID-19 cases and 1,62,114 fatalities. The number of people who have recuperated from the disease surged to 1,13,93,021, while the case fatality rate stands at 1.34 per cent. SEE ALSO: <a href="https://www.businessinsider.in/business/news/xiaomi-plans-to-enter-the-electric-vehicle-business-with-an-investment-outlay-of-10-billion/articleshow/81772965.cms">Xiaomi forays into the electric vehicle business with a $10 billion subsidiary</a> <a href="https://www.businessinsider.in/business/ecommerce/news/amazon-is-eyeing-india-startups-as-it-gears-up-for-a-fight-with-asia-richest-man-in-retail/articleshow/81773692.cms">Amazon is eyeing India's startups as it gears up for a fight with Asia's richest man in retail</a> <a href="https://www.businessinsider.in/tech/mobile/news/samsung-galaxy-a72-mobile-phone-review/slidelist/81774857.cms">Samsung Galaxy A72 review – a premium mid-range phone in a crowded market</a> <a href="https://www.businessinsider.in/science/environment/news/earth-lost-more-arctic-sea-ice-than-the-area-of-rajasthan-and-madhya-pradesh-combined-in-2021/articleshow/81775537.cms">The planet lost more Arctic sea ice than the area of Rajasthan and Madhya Pradesh combined in 2021</a>

India's real GDP growth could range from 7.5% to 12.5% in FY22, but economy "not out of the woods yet," says World Bank

<ul class="summary-list"><li>Roughly 54 million people fell out of the global <keyword id="57489" type="PERSON" weightage="60" keywordseo="Middle-class">middle class</keyword> during the pandemic recession, <keyword id="216884" type="ORGANIZATION" weightage="60" keywordseo="Pew">Pew</keyword> data shows.</li><li>About 152 million people sank into the lower-income class or into <keyword id="45057" type="PERSON" weightage="60" keywordseo="Poverty">poverty</keyword>, reversing years of improvement.</li><li>Poorer economies saw the biggest losses, adding to the global recovery's K-shaped trend.</li></ul>As economies turn toward reopening and recovery, the coronavirus' economic toll is coming into focus. The picture is incredibly bleak.The distribution of COVID-19 vaccines presents a clear end to the pandemic, but new data from the <a href="https://www.pewresearch.org/global/2021/03/18/the-pandemic-stalls-growth-in-the-global-middle-class-pushes-poverty-up-sharply/">Pew Research Center</a> suggests that returning to pre-pandemic unemployment levels is only the first step toward a full rebound. The firm estimates that 54 million more people fell out of the global middle class in 2020 than would have had the pandemic not emerged.The classification includes people who live on $10 to $20 a day, or those who earn roughly $14,600 to $29,200 a year. That spread straddles the US poverty line and is well below median earnings in advanced economies.That decline would've been larger had China, which is home to more than one-third of the world's middle class, not avoided a recession, Rakesh Kochhar, senior researcher at Pew, said. Still, growth in that country has slowed significantly as it faces obstacles to vaccinating its huge population.Separately, about 152 million people fell from the global upper and middle class into the lower class and poverty. Pew's definition of global poverty encompasses those living on less than $2 a day, or earning less than $2,920 a year for a family of four.Like other aspects of the economic downturn, the pandemic's negative effects have driven an <a href="https://www.businessinsider.com/k-shaped-recovery-recession-worse-for-bottom-better-for-top-2020-11">uneven, K-shaped recovery</a>. Middle-class dropouts were most concentrated in South Asia, East Asia, and the Pacific, as those regions saw growth in that cohort stall well before the pandemic hit. The increase in those classified as "poor" was primarily seen in India and Sub-Saharan Africa, reversing years of progress and plunging the regions into new economic pain, Kochhar said.The regional disparities reflect observations made by the International Monetary Fund in its <a href="https://blogs.imf.org/2021/04/06/managing-divergent-recoveries/">latest economic projections</a>. The organization expects emerging-market and low-income economies to "suffer more significant medium-term losses," as they lack the fiscal firepower to power a stronger recovery. Countries with large dependencies on the tourism industry also risk prolonged downturns, the IMF said."Recoveries are diverging dangerously across and within countries," wrote Gita Gopinath, chief economist for the IMF.At the same time, data collected by Bloomberg show wealthier countries <a href="https://www.businessinsider.com/vaccine-wealth-gap-between-rich-poor-countries-administered-doses-2021-4">vaccinating 25 times faster</a> than the world's poorest nations. Advanced economies snapped up doses throughout the fall, creating a shortage that further inflames the recovery's K-shaped trend.To be sure, the pandemic only exacerbated trends seen for many years. Most of the world's population landed in either the low-income or poor groups before the health crisis, while high-earners made up the smallest group. Yet the virus's damage to service jobs, which are primarily staffed by minorities, low-earners, and women, widened the gaps.That's not to say progress can't be made. The global middle-class population grew by 54 million people annually on average from 2011 to 2019. The pandemic only erased a year of gains at that pace.Poverty, however, jumped by 131 million people in 2020 after falling at an average annual rate of 49 million people, according to Pew. The setback signals that, at the pre-pandemic pace of improvement, it will still take years to rebound.

54 million people fell out of the global middle class last year as the K-shaped recovery went international

The Congress President announced the <keyword id="7461248" type="UNKNOWN" weightage="20" keywordseo="Nyuntam-Aay-Yojana">Nyuntam Aay Yojana</keyword> (NYAY) on Monday. If voted to power in the 2019 Lok Sabha elections, India’s grand old party, plans to implement this scheme. What is this scheme all about? The plan is to give ₹6,000 per month to every family which falls below the poverty line. The question is how was this number arrived at. In <a href="https://www.business-standard.com/article/elections/rahul-s-scheme-for-poor-to-cost-rs-3-5-trn-congress-data-analytics-chief-119032500999_1.html">an interview to the Business Standard</a>, Praveen Chakravarty, who is the head of the data analytics department of the Congress Party, explained the logic. He said that almost everyone earns ₹5,000-6,000 per month as a family. The Congress Party thinks that a minimum income of ₹12,000 per month is reasonable. In that sense, the plan is to pay ₹6,000 per month to every family which is below the poverty line, to get them to a level of ₹12,000 per month. So, to that extent this is a <keyword id="4034334" type="PERSON" weightage="20" keywordseo="basic-income-scheme">basic income scheme</keyword>, with the below poverty line families getting a fixed amount of money every month, with no conditions attached to the payment. In case of the just launched PM-Kisan scheme only landowners who own less than two hectares of land, stand to benefit. In the case of NYAY, anyone below the poverty line will be eligible for ₹6,000 per month, this will include landless labourers as well. What is the scheme trying to address? The scheme is trying to address poverty, especially in the eastern part of the country. Take a look at Figure 1, which basically plots the per capita income of different states in 2017-2018. The per capita income of many states is missing because the data is not currently available. In 2017-2018, Bihar had the lowest per capita income of ₹38,860 per year (or just about ₹3,500 per month). Uttar Pradesh came in next with a per capita income of ₹55,339. Now compare this with other states. Karnataka had a per capita income of ₹181,788 whereas Maharashtra had a per capita income of ₹180,596. 
 
 
 
 
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 So, clearly there is a problem. People living in heavily populated states like Bihar and Uttar Pradesh, are simply not making enough money and this needs to be addressed. Why does the government need to give money to citizens? Large states like Maharashtra, Gujarat, Tamil Nadu, Karnataka and Haryana, which have done much better than other states, have had some sort of business and industry going in the state. Haryana has also benefited on account of the agricultural revolution and the fact that the state borders New Delhi. The problem is that poorer states can no longer follow this formula, simply because India is going through what economists refer to as premature non-industrialization. As the Economic Survey of 2014-15 pointed out, “Uttar Pradesh’s maximum level of industrialization was about one-third that of Brazil and Indonesia (both have similar populations to UP); and the decline began at 15-20% of the income levels of these countries." In this scenario, the states with a lower income, need to be supported by the government, and there is clearly no denying that. Of course, this comes with the corollary that any basic income scheme cannot eradicate poverty. Where is the money going to come from? As the old adage goes, in economics there is no free lunch. Someone is going to foot the bill for delivering NYAY. NYAY is to be delivered to 20% of the population or around 50 million families. At ₹6,000 per family per month, the total bill works out to ₹3.6 trillion. The forecast gross domestic product for 2019-20 is ₹210.1 trillion. Hence, the bill for NYAY will work out to around 1.7% of the GDP. The question is how a bill of ₹3.6 trillion or 1.7% of the GDP is going to be financed? The Congress Party in its media interactions seems confident about being able to finance NYAY. Economists who have talked about the idea of a basic income in India in the past, have primarily talked about doing away with subsidies and raising taxes, in order to be able to finance any basic income scheme. Let’s try and take a look at how this would work in the case of NYAY. The total food, fertiliser and petroleum subsidy bill for 2019-20 stands at ₹2.97 trillion or 1.41% of the GDP. Once NYAY is implemented, it makes sense to do away with the subsidies, given that people will get money directly into their bank accounts. The point is this is easier said than done. Any government trying to do away with fertiliser subsidy will immediately be labelled anti-farmer. The food subsidy is the really tricky part. At ₹1.84 trillion, it is the largest of the subsidies offered by the central government. How does it work? The Food Corporation of India (FCI) along with state procurement agencies buys rice and wheat directly from farmers at a minimum support price, announced by the government. This rice and wheat bought, is then sold through the public distribution system (more popularly referred to as ration shops) at a much lower price. The government the compensates FCI for this subsidy through the food subsidy allocated in the budget. If this subsidy is done away with or even cut, then the rice and wheat buying by FCI and other state procurement agencies, will have to be cut or done away with. In this scenario, what happens to the FCI and other state procurement agencies? Will they be dismantled? Further, what will happen to the public distribution system? These are questions that will need to be answered before NYAY is launched. In fact, the public distribution system works well in states like Chhattisgarh and Tamil Nadu. What will happen there? The state of Punjab benefits the most through FCI buying rice and wheat directly from farmers. In fact, given that the FCI has a very good procurement system in Punjab, the farmers grow a lot of rice, in what is basically a semi-arid region. What will happen in the state of Punjab, if the procurement system is done away with? These are very difficult questions with answers which may perhaps even be politically suicidal. What about taxes? When it comes to basic income, economists have called for different kinds of taxes, from tax on agriculture income, to re-introduction of wealth tax and estate duty. These forms of taxes are fairly unpopular and it remains to be seen if any government will introduce them and face the wrath of the taxpayer. Nevertheless, one thing that can be done is to take a look at the tax incentives available to corporates. Along with every budget, the government puts out a Statement of Revenue Impact of Tax Incentives under the Central Tax System. When it comes to central excise duty and customs duty, the data is available only up to 2016-2017. In that year, the revenue impact of major tax incentives stood at ₹1.46 trillion. While, it is easy to point out that such exemptions exist, it won’t be so easy to do away with them. Another good source of revenue can be central public sector enterprises, which are sitting on a huge amount of land and other assets. Vijay Joshi, Reader Emeritus in Economics, University of Oxford, in his book India’s Long Road estimates that the value of enterprises owned by the government is around 40-45% of the GDP. The problem is that in all these years, no government has really managed to sell public enterprises to private companies, which is where they can hope to earn a good premium over the prevailing price. If the government gets around to the idea of selling public sector enterprises, a lot of money can be raised to finance. The trouble is the Congress Party has never believed in the idea of selling public sector enterprises (not that the BJP does either). To conclude, NYAY is basically a scheme, whose time has come. Having said that, it will be very difficult to implement. Identifying the people who are actually eligible for the scheme will be difficult. Hence, it is important the scheme is piloted well and then implemented throughout the country. Many systems which have been put in place will have to be challenged and junked. The problem is that with every system there come people who have benefitted and continue to benefit from the system, and hence, have a huge nuisance value. Will the Congress Party, if elected, be able to overcome this nuisance, is something that remains to be seen.

Can Congress' basic income scheme end India's poverty?

<ul class="summary-list"><li>Mass gatherings such as the farmers' protests didn't become the superspreader events experts feared.</li><li>COVID cases have steadily fallen, raising hopes the country is close to achieving herd immunity.</li><li>One expert says misinformation may have been an "accidental game changer" at encouraging mingling.</li></ul>When Indian farmers began gathering to protest in November 2020, at the height of the <keyword id="1754604" type="PERSON" weightage="60" keywordseo="coronavirus">coronavirus</keyword> pandemic, <a href="https://timesofindia.indiatimes.com/india/superspreader-protest-as-experts-worry-about-covid-farmers-say-new-laws-bigger-threat-to-their-survival/articleshow/79492667.cms">experts predicted these would be superspreader events</a>.Three months later, tens of thousands are still gathered in tents on the outskirts of Delhi with more still arriving in tractors for speeches and impromptu marches. <a href="https://www.bbc.co.uk/news/world-asia-india-54657433">Big election rallies took place in October</a> in the state of Bihar. Hundreds of thousands of pilgrims flocked to the annual religious gathering of Kumbh Mela in January, <a href="https://pib.gov.in/PressReleasePage.aspx?PRID=1692725">mostly without masks.</a>But not only have these not led to spikes in COVID cases, such cases have plummeted.This densely-populated country of nearly 1.4 billion people, whose median age is only 28, recorded just <a href="https://ourworldindata.org/coronavirus/country/india?country=~IND">11,583 cases on February 10, down from a high of nearly 100,000 a day in September</a>.<div type="image" title="India's daily cases" height="2400" width="3400" msid="80927635" hostid="261"></div><keyword id="3658" type="COUNTRY" weightage="60" keywordseo="India">India</keyword> began a full lockdown in March when cases were relatively low, then <a href="https://pib.gov.in/PressReleasePage.aspx?PRID=1692725">gradually emerged in stages from June</a>. Cases began to fall long before the country embarked in January on a vaccination programme that has so far inoculated nearly 8 million people."None of the horrors, that were imagined, happened during these gatherings," Dr Rajib Dasgupta, chair of the Centre of Social Medicine &amp; Community Health at Jawaharlal Nehru University, tells Insider.As India's case numbers continue to decline, experts hope that the world's second biggest country is approaching herd immunity, the "indirect protection" from infections "when a population is immune either through vaccination or immunity developed through previous infection," according to the World Health Organization.<div type="image" title="GettyImages 1231155229" height="3608" width="5128" msid="80927638" hostid="261"></div>Dasgupta says mass gatherings may have accelerated this among a population that is less vulnerable to COVID, due to a relatively young population.Misinformation about the danger of COVID may have emboldened people to gather together, he adds, saying it "might well have been an accidental game changer."The myths, often circulated through WhatsApp and social media, included that <keyword id="8763838" type="UNKNOWN" weightage="60" keywordseo="covid-19">COVID-19</keyword> was no worse than seasonal flu and that traditional herbal concoctions or spices such as turmeric or gooseberries can safeguard against it.Boom, an independent website that fights misinformation, <a href="https://www.boomlive.in/fact-file/fake-news-in-the-time-of-coronavirus-a-boom-study-8008">published 178 fact checks of false claims circulating about COVID</a> in the first five months in 2020.Read more: <a href="https://www.businessinsider.com/majority-of-coronavirus-cases-asymptomatic-study-2021-2">As little as 13% of people who get the coronavirus develop symptoms, a new study suggests</a><div type="image" title="Bihar election rally India October 2020" height="1185" width="2100" msid="80927643" hostid="261"></div>Monish Sengupta, who divides his time between Calcutta and the UK, tells Insider, a doctor friend "recommended consuming some homeopathic medicine and camphor with hot milk."At a tea shop in Calcutta in mid-February, Insider encountered a group of young men sipping tea and loudly arguing whether herd immunity meant they might skip taking the <keyword id="24209" type="PERSON" weightage="60" keywordseo="vaccine">vaccine</keyword>. "Where's the coronavirus? It's gone," one of them said. On February 5, a flight between New Delhi and Calcutta was packed. Both airports were crowded.But despite the warnings about mass gatherings, one volunteer reports seeing no one with COVID symptoms at a camp set up by doctors and volunteers at the site of the farming protests.Read more: <a href="https://www.businessinsider.com/fauci-worried-getting-coronavirus-trump-white-house-superspreader-2021-2">Fauci said he worried about getting COVID-19 while working in the 'superspreader' Trump White House</a>Indranil Mukhopadhyay, co-convener of the Delhi chapter of health movement Jan Swasthya Abhiyaan, says there is a noticeable lack of distancing and mask wearing at the protestors as well as a reluctance to getting tested for the virus.The professor, who teaches at New Delhi's Jindal School of Government and Public Policy, tells Insider the camp is "fertile ground" for the virus. But he adds the group's medical camp has so far not come across anyone displaying COVID symptoms, despite attending to more than 15,000 patients.A <a href="https://www.nber.org/papers/w27408">working paper</a> by the US National Bureau of Economic Research, that used data from last year's Black Lives Matter protests, provides a potential insight into why this was the case.It concluded that people who were least likely to contract the virus, were most likely to attend the protests in America, while those who were high-risk stayed away.<div type="image" title="Hindu devotees take a holy dip in the waters of the River Ganges" height="3000" width="4501" msid="80927646" hostid="261"></div>The BLM protests also prompted those who didn't participate in demonstrations to follow safety protocols more diligently because the protests raised the risk they perceived, the paper noted. The paper's lead author, economics Professor Dave Dhaval, tells Insider "some of the above factors may be in play" in the farmers' protest.Dr Satyabrata Routray, director of immunization at the India chapter of Path, a global nonprofit health organization, says misinformation played its part, but poverty was crucial in forcing people out of their homes.Read more: <a href="https://www.businessinsider.com/covid-19-vaccine-does-not-affect-fertility-doctors-reassure-public-2021-2">Doctors are speaking out to dispel the 'groundless' myth that the COVID-19 vaccine affects fertility in women or men</a>More than <a href="https://www.ilo.org/wcmsp5/groups/public/---ed_emp/---ifp_skills/documents/publication/wcms_734503.pdf">90 percent of India's workforce</a> is in the informal sector - lacking social insurance and often earning a low daily wage. India also has around <a href="https://www.indiaspend.com/1-77mn-indians-are-homeless-40-of-them-are-getting-no-lockdown-relief/">1.77 million homeless people</a>, who have no homes to lock themselves into."People needed to get out of their homes and get on with the business of earning their daily bread. A large majority of the Indian population are poor and depend on daily wages," Routray tells Insider."Any intermixing of infected population with the rest of the population would hasten herd immunity. And looking at the numbers I would say we are very close to herd immunity."Dasgupta says people are asking "if the situation is real" - whether India genuinely is approaching herd immunity. "I would say it is reasonably real. <a href="https://timesofindia.indiatimes.com/city/hyderabad/1-out-of-4-in-t-has-had-covid-reveals-nins-3rd-sero-survey/articleshow/80777381.cms">The sero surveys</a> have thrown up evidence of pretty high levels of exposure to infection," he adds, referring to blood testing to estimate the extent of exposure.The Indian Council of Medical Research (ICMR)'s latest sero survey showed 21.5% of Indians have been <a href="https://twitter.com/COVIDNewsByMIB/status/1357284699702390786?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1357284699702390786%7Ctwgr%5E%7Ctwcon%5Es1_&amp;ref_url=https%3A%2F%2Fwww.bbc.com%2Fnews%2Fworld-asia-india-559453825382">exposed to the virus</a>. While a sero survey in Delhi - <a href="https://www.mygov.in/covid-19">which has so far recorded 636,000 cases and 10,886 deaths</a> - showed more than 56% of people there had <a href="https://www.hindustantimes.com/cities/delhi-news/delhis-5th-sero-survey-over-56-people-have-antibodies-against-covid19-101612264534349.html">developed antibodies against the virus</a>. Calcutta -- which has more than 14 million in its wider metropolitan region - has so far recorded 571,000 cases and 10,220 deaths. Last June, much earlier in the pandemic, the ICMR had said <a href="https://www.indiatoday.in/india/story/kolkata-people-covid19-antibodies-icmr-sero-survey-1694917-2020-06-28">14% </a>of people in Calcutta had developed antibodies, while a private laboratory in September put the figure at <a href="https://www.thestatesman.com/cities/kolkata/kolkata-one-four-people-covid-antibodies-1502922912.html">50%.</a>Read more: <a href="https://www.businessinsider.com/doctor-nhs-covid-safety-social-distancing-hospital-protocol-lockdown-2021-2">I'm a NHS doctor and I've seen firsthand how devastating COVID is. Everyone needs have give up some freedoms to make it through the final stretch of the pandemic.</a>Dasgupta adds the coronavirus is not a new virus in the region. India was hit by the 2002-3 outbreak of SARS, which is <a href="https://www.indiatoday.in/india/story/sars-2002-03-india-coronavirus-outbreak-1683404-2020-05-29">a variant of the coronavirus</a>. The Middle East Respiratory Syndrome (MERS) hit in 2015. Studies have also detected the presence of <a href="https://link.springer.com/article/10.1007/s12098-018-2840-8">Human Coronavirus 229E</a> and <a href="https://link.springer.com/article/10.1007/s12098-018-2840-8">Human Coronavirus HKU1</a> among Indian children."COVID-19 is a new disease but the coronavirus is a very common virus in Asia and South Asia which means the pool of susceptible people was not as large as it was initially assumed," Dasgupta adds.Dasgupta agrees India is nearly at herd immunity, adding: "It's unlikely that there will be another huge wave." But he warns that there may yet be surges in rural areas, which so far have been less affected than cites."The game changer at this point would be to get more and more people vaccinated against the virus," he adds. "To convince and communicate to the people constantly that the threat is still alive."

Experts feared India's farming protests would be COVID superspreader events. Poverty, misinformation and a younger population may explain why cases plummeted instead.

New Delhi, May 17 () Following the COVID-19-induced economic disruptions, up to 135 million jobs could be lost and 120 million people might be pushed back into poverty in India, all of which will have a hit on consumer income, spending and savings, says a report. According to a new report by international management consulting firm Arthur D Little, the worst of COVID-19's impact will be felt by India's most vulnerable in terms of job loss, poverty increase and reduced per-capita income, which in turn will result in a steep decline in the Gross Domestic Product (GDP). "Given the continued rise of COVID-19 cases, we believe that a W-shaped recovery is the most likely scenario for India. This implies a GDP contraction of 10.8 per cent in FY 2020-21 and GDP growth of 0.8 per cent in FY 2021-22," the report said. India's COVID-19 tally has crossed 90,000 and the nationwide death toll has touched nearly 2,800 so far. The report titled "India: Surmounting the economic challenges posed by COVID-19: A 10-point programme to revive and power India's post-COVID economy" said the 'collateral damage' of the forecasted GDP slowdown, will be felt most acutely in employment, poverty alleviation, per-capita income and overall nominal GDP. "Unemployment may rise to 35 per cent from 7.6 per cent resulting in 136 million jobs lost and a total of 174 million unemployed. Poverty alleviation will receive a set-back, significantly changing the fortunes of many, putting 120 million people into poverty and 40 million into abject poverty," the report said. "India is headed towards a W-shaped economic recovery with a potential GDP contraction of 10.8 per cent in FY21. An opportunity loss of USD 1 trillion is staring India in its face," said Barnik Chitran Maitra, lead author of the report and Managing Partner &amp; CEO of Arthur D Little, India and South Asia. Maitra further said "for its USD 5 trillion vision, a radical economic approach is needed, centred on an immediate stimulus and structural reforms. The Prime Minister's visionary 'Atma Nirbhar Bharat Abhiyan' is a good start to this new approach." The report lauded the steps taken by the government and the Reserve Bank of India, but said a far more assertive approach may be required given the magnitude of the adverse economic output. The report suggested a 10-point programme to accelerate the recovery which include strengthening the 'safety net' significantly for the most vulnerable, enable survival of small and medium businesses, restarting the rural economy and providing targeted assistance to at-risk sectors. It further said the government should launch "Make in India 2.0" to capture global opportunities, build 'Modern India', accelerate Digital India and Innovation, strengthen global investment corridors with the US, UAE, Saudi Arabia, Japan and the UK, debottleneck land and labour and transform banking and financial markets in a bid to secure a sustainable economic future for 1.3 billion Indians. DRR MKJ

COVID-19 could cost 135 mn jobs, push 120 mn people into poverty in India: Report

A latest <a href="http://www.businessinsider.in/searchresult.cms?query=world+bank">World Bank </a>report has revealed that India accounted for the largest number of poor people in any country in 2012, but its <keyword id="45057" type="UNKNOWN" weightage="20" keywordseo="Poverty">poverty</keyword> rate was lowest among countries having large number of poor population. 
 
The report has also stated that the number of poor people across the world is likely to go down by 10% of the global population this year. 
 
It, however, indicates that the world is moving closer to its goal of ending <a href="http://www.businessinsider.in/searchresult.cms?query=poverty+">poverty </a>by 2030. The poverty rate in low-income countries was on an average of 43% in 2012, while in middle-income-countries, it was 19%. Still the lower-middle-income countries are home to about half of the global poor as compared to a third for low-income countries. 
 
What experts believe is that four nations – China, India, Indonesia and Nigeria – with the largest populations were once classified as low-income nations, but these have now moved into lower-middle-income category. 
 
In its report, the bank used an updated international poverty line of $1.9 a day, which incorporates new information on differences in the cost of living across countries. The new line preserves the real purchasing power of the previous line (of $1.25 a day in 2005 prices) in the world's poorest countries. 
 The <keyword id="6354424" type="ORGANIZATION" weightage="20" keywordseo="World-Bank">World Bank</keyword> president <a href="http://www.businessinsider.in/searchresult.cms?query=Jim+Yong+Kim+">Jim Yong Kim </a>said, “This is the best story in the world today - these projections show us that we are the first generation in human history that can end extreme poverty." 
 
The major reductions in poverty were because of strong growth rates in developing countries, investment in people’s education, health and social safety nets that helped people from falling back into poverty, said Kim. 
 The regional forecast for 2015 shows that the poverty in East Asia and the Pacific would fall to 4.1% of its population, down from 7.2% in 2012; <keyword id="48890" type="COUNTRY" weightage="20" keywordseo="Latin-America">Latin America</keyword> and the Caribbean would fall to 5.6% from 6.2% in 2012, as reported by The Economic Times. 
 In <keyword id="52011" type="CITY" weightage="20" keywordseo="South-Asia">South Asia</keyword>, the poverty would scale down to 13.5% in 2015 as against 18.8% in 2012; sub-Saharan Africa poverty would decline to 35.2% in 2015 as compared to 42.6% in 2012. 
 Kaushik Basu, the former chief Economic Advisor to the <keyword id="44734" type="ORGANIZATION" weightage="20" keywordseo="Indian-Government">Indian Government</keyword> and the chief economist of the World Bank, said, "Development has been robust over the last two decades but the protracted global slowdown since the financial crisis of 2008, is beginning to cast its shadow on emerging economies." 
 
Kim said the continued major reductions in poverty were due to strong growth rates in developing countries in recent years, investments in people's education, health and social safety nets that helped keep people from falling back into poverty. 
 
He, however, cautioned that the goal to end extreme poverty remained a highly-ambitious target owing to slow global economic growth, many of the world's remaining poor people living in fragile and conflict-affected states and the considerable depth and breadth of remaining poverty. 
Image: thinkstock

World Bank says India’s poverty rate lowest among nations with poor populations

<ul><li>The world is seeing a return of old sets of risks like inflation, trade wars, capital outflows from emerging markets and social unrest. </li><li>It also faces new risks like unsustainable levels of debt, a new era of low growth, low global investment and de-globalisation. </li><li>Concurrent shocks, deeply interconnected risks and eroding resilience are giving rise to the risk of polycrises. </li></ul>As a new year begins, India might face risks like digital inequality, geopolitical contestation of resources, <keyword id="14744072" type="General" weightage="20" keywordseo="cost-of-living-crisis" source="Orion">cost-of-living crisis</keyword>, <keyword id="167509" type="General" weightage="20" keywordseo="debt-crises" source="Orion">debt crises</keyword>, along with natural disasters and extreme weather events in the next two years, says a <keyword id="69007" type="General" weightage="20" keywordseo="world-economic-forum" source="Orion">World Economic Forum</keyword> report released on Wednesday. These were the top five risks identified in an executive opinion survey on national risk perceptions, conducted by WEF. The Global Risks Report 2023 said that the first five years of this decade heralded a particularly disruptive period in human history. Eerily familiar old risks with new risks Apart from a return of ‘eerily familiar’ older risks, the world is seeing a new set of risks emerge that are shaping an uncertain and turbulent decade to come. “We have seen a return of older risks – inflation, cost-of-living crises, trade wars, capital outflows from emerging markets, widespread social unrest, geopolitical confrontation and the spectre of nuclear warfare – which few of this generation’s business leaders and public policy-makers have experienced,” the report said. In addition, there are new developments like unsustainable levels of debt, a new era of low growth, low global investment and de-globalisation, a decline in human development after decades of progress, and rapid and unconstrained development of dual-use (civilian and military) technologies. There is also the growing pressure of climate change impacts and ambitions in an ever-shrinking window for transition to a 1.5°C world, says WEF. “Concurrent shocks, deeply interconnected risks and eroding resilience are giving rise to the risk of polycrises – where disparate crises interact such that the overall impact far exceeds the sum of each part,” it adds. ‘First rollback in human development in decades’ Inflationary pressures could remain stubborn over the next two years, the agency predicts — as war prolongs, pandemic lingers and economic-warfare spurred supply-chain decoupling continues. “Continued supply-driven inflation could lead to stagflation, the socioeconomic consequences of which could be severe, given an unprecedented interaction with historically high levels of public debt,” the report said. Even those countries that have a softer economic landing will also have to go through pain as the low-interest rate regime ends. “The knock-on effects will be felt most acutely by the most vulnerable parts of society and already-fragile states, contributing to rising poverty, hunger, violent protests, political instability and even state collapse,” WEF added. Governments will be stressed with protecting citizens from a long lasting cost-of-living crisis during an economic downturn, high interest costs due to high public debt and the urgent need to transition to new energy systems. Moreover, the geopolitical landscape might also be less stable. “The resulting new economic era may be one of growing divergence between rich and poor countries and the first rollback in human development in decades,” said WEF. The great tech divide The world has seen many emerging technologies evolve, with advancements in artificial intelligence (AI), quantum computing and biotechnology. The countries that can afford them will use them to partially mitigate health and food security threats, but for others, the inequality and divergence will only grow. “In all economies, these technologies also bring risks, from widening misinformation and disinformation to unmanageably rapid churn in both blue- and white-collar jobs,” the report said, adding that increasing digitization will also deepen the cybersecurity threats. Tech risks won’t just come from rogue actors but also from misuse of sophisticated analysis of large data sets that will weaken privacy even in democratic regimes, as per WEF. SEE ALSO <a href="https://www.businessinsider.in/business/startups/news/ecomm-edtech-see-sharpest-drop-as-startup-fund-raise-falls-33-in-2022-pwc/articleshow/96909018.cms">Ecomm, edtech see sharpest drop as startup fund raise falls 33% in 2022: PwC</a> <a href="https://www.businessinsider.in/business/corporates/news/why-mcdonalds-is-going-big-even-as-pizza-hut-and-other-rivals-slash-store-sizes/articleshow/96782982.cms">Delivery versus dine-in: Why McDonald's is going ‘big’ even as rivals slash store sizes</a>

You Searched For "india poverty decline" and got 11 results

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World Bank says India’s poverty rate lowest among nations with poor populations

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