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India’s poor face low inflation risk: UN

NEW DELHI: A study by the UN Development Programme (UNDP) has concluded that low-income population in India is negligibly vulnerable to slipping into poverty due to a global spike in inflation. The conclusion comes even as the paper points out that people in different income segments in some of the European countries could be at risk.
Amid rising food and energy prices in the wake of the Ukraine war as well as disruptions in supply chain, the paper — titled ‘Addressing the Cost-of-Living Crisis in Developing Countries’ — has estimated that nearly 71 million people could be pushed into poverty with the Caspian Basin, Balkans and sub-Saharan Africa expected to see maximum impact. It has advocated targeted and time-bound cash transfers as an effective tool.
FM Nirmala Sitharaman told reporters that the government’s intervention over the last three years, which included free foodgrains to the poor and cash transfers to the poor have helped mitigate the risk to the poor. “Inflation in India will push 0% of the population below the poverty line of $1. 9 a day, just 0. 02% of those below $3. 2 a day and 0. 04% of those below $5. 5 a day are seen at risk. The overall impact is negligible, according to the report,” the FM said.
The study has used the distribution of per capita household income for benchmark and cost of living scenarios at three income levels — $1. 9 a day (World Bank’s standard for absolute poverty), $3. 2 and $5. 5. For vulnerability to poverty, the analysis uses a threshold of $13 a day.
Based on its assessment, Pakistan & Sri Lanka in South Asia are among countries likely facing high poverty impacts across all poverty lines. “In these countries, around 3% of the population, on average, could fall into poverty,” the report concluded.



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