The International Monetary Fund (IMF) on Wednesday lauded India’s efforts for food distribution during the pandemic and said that the country averted the rise in extreme poverty during the period by assuring food security through Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY). The IMF further noted that extreme poverty in India is less than 1 percent and the same was maintained in the year 2020.
The IMF April 5 published a research paper presenting the estimates of poverty and consumption in India during the COVID-19 spread. According to the IMF paper titled ‘Pandemic, Poverty, and Inequality: Evidence from India’, Prime Minister Narendra Modi’s food security scheme, the Pradhan Mantri Garib Kalyan Anna Yojana was critical in preventing an increase in extreme poverty levels in the country.
1) Extreme poverty in India was as low as 1% in 2019. This is a substantial reduction in poverty rates from 2011 levels.
— Surjit Bhalla (@surjitbhalla) April 6, 2022
2) Low inflation, more equitable growth and improvement in public distribution thanks to Aadhar helped reduce poverty.
2/n
“The expansion of India’s food subsidy program rather than increasing cash transfers enabled India to provide free food as per the average monthly requirement to all those who were in need. This helped maintain extreme poverty at the low 0.8% level. Without any food subsidies, extreme poverty in the pandemic year would have increased by 1.05% (from 1.43 to 2.48 %)”, the paper read.
The report further mentioned that the food transfers were instrumental in ensuring that extreme poverty remained at that low level in the pandemic year 2020. The IMF also noted that the consumption growth was higher in the years leading up to the pandemic than before it. Also, post-food subsidy inequality at 0.294 is now very close to its lowest level of 0.284 observed in 1993/94, it said.
Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) was announced by the government in March 2020 amid the COVID-19 spread to supply free food grains to migrants and the poor. The government had announced the distribution of 5 kg foodgrains per person per month, over and above the regular monthly NFSA foodgrains. It had also announced an additional supply of free-of-cost foodgrains to about 80 crore National Food Security Act (NFSA) beneficiaries.
The initiative was due to expire by the end of June 2020 but the government extended the PMGKAY up to November 2020. Recently, PM Modi on March 25 further announced the extension of the scheme till September 2022. PM Modi said more than 80 crore people in the country will benefit from the decision.
Meanwhile, the IMF noted that India’s efforts demonstrated the social safety net through the expansion of the food subsidy program. It claimed that the program absorbed a major part of the pandemic shock to the Indian economy by providing insurance to the poor and prevented an increase in the prevalence of extreme poverty in India.
