World Bank boss praises India’s targeted transfer of benefits to the poor during Covid 19

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World Bank President David Malpass said India’s support in the form of targeted transfers to the poor and needy during the Covid 19 pandemic crisis has been remarkable and other countries need to adopt the same model instead of offering large grants.

“Aided by digital cash transfers, India has managed to provide food or cash assistance to a remarkable 85% of rural households and 69% of urban households. South Africa has launched its biggest social safety net expansion in a generation, spending $6 billion on poverty reduction that has benefited nearly 29 million people,” Malpass said, adding that the half of all spending on energy subsidies in low- and middle-income economies went to the richest 20% of the population, who also use more energy.

“Choose targeted cash transfers over large grants,” he said.

Malpass said targeted cash transfers are a much more effective mechanism for supporting poor and vulnerable groups: over 60% of cash transfer spending goes to the bottom 40%. “Cash transfers also have a greater impact on income growth than grants,” Malpass wrote in a foreword to a study.

Meanwhile, the United Nations Conference on Trade and Development (UNCTAD) in its recent growth forecast pegged India’s growth at 5.7% in 2022 and 4.7% in 2023. The Reserve Bank of India, however, last week pegged India’s GDP growth for the current fiscal year at 7.0%. Previously, he had forecast 7.2%. The second quarter growth is projected at 6.3% while the third quarter at 4.6% and the fourth at 4.6%, according to the RBI projection.

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