India will become the nation with the largest number of poor people, says Former Chief Economist of the World Bank Kaushik Basu, citing a study by Brookings Institution.
Sharing his thoughts on Twitter, the former India chief economic advisor urged the government to focus the upcoming Budget on the poor. He said that all the non-essential expenditure should be cut and the fiscal deficit is increased.
"A new study by Brookings using IMF & World Bank data shows, because of COVID, poverty is rising in most developing & emerging economies. The biggest rise in poverty is in India which will overtake Nigeria around now to be the nation with the largest number of poor people.
"The focus of the coming Budget should be the poor—the self-employed, unemployed & agricultural workers. All non-essential expenditure should be cut & the fiscal deficit should be increased. India’s FRBM Act 2003, first introduced by @YashwantSinha, has provision for this. Use it," Basu tweeted.
According to an October 2020 Brookings Institution report titled "The Impact of Covid-19 on Global Extreme Poverty" by Homi Kharas, India will record the largest number of people slipping into poverty.
In India, 85 million people will be pushed into poverty as a result of the Covid-19 pandemic, the report said.
This will imply that India, having dropped to the second position will once again reclaim the number one position from Nigeria of a maximum number of people living under poverty, the report stated.
As the world battles the Covid19 pandemic, the impact of the economic damage could be more long-lasting on the emerging economies, the report said.
In contrast t0 2019, the poverty in 2020 could rise by 120 million, said the report.
The benchmark for poverty is higher by 144 million people. While some of this would neutralize in 2021 as economies begin to recover, half of the rise in poverty may still be permanent, it said.
By 2030, the poverty figures could still be higher by 60 million people, the report stated.
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