Welfare measures shielded people from inflation impact: Nirmala Sitharaman
2 min read 12 Jul 2022, 10:50 PM ISTThe UNDP report named India, the US, France, Japan and China among the countries that had low impact on poverty due to inflation in the context of the ripple effects of the Russia-Ukraine war that led to disruption in energy and food markets
PremiumThe welfare measures announced by the Central government—food security measures and cash transfers—have been effective in shielding the vulnerable sections of the society from the inflation impact, finance minister Nirmala Sitharaman said on Tuesday citing a United Nations Development Programme (UNDP) report on inflation-led poverty.
The report named India, the US, France, Japan and China among the countries that had low impact on poverty due to inflation in the context of the ripple effects of the Russia-Ukraine war that led to disruption in energy and food markets. The UNDP report released last week said that soaring food prices and energy prices can push upto 71 million people into poverty globally and named Argentina, Iraq, Sri Lanka and Uzbekistan among the high impact countries.
It also said that a recent comparative assessment of price and income support measures showed that targeted transfers help poorer households cope with price spikes.
“Well tailored programmes to ensure that people do not run the risk of going into poverty have worked," Sitharaman said at a briefing on Tuesday.
The UNDP report studied the impact of inflationary surge and support from governments over different poverty lines of less than $1.9 a day, less than $3.3 a day and less than $5.5 a day. The report showed the average poverty impact in terms of percentage of the country’s population falling into poverty at each of the three poverty lines and classified nations into low impact, medium impact and high impact categories. India falls in the low impact class.
The report showed that inflation in India will push 0% of the population below the poverty line of $1.9 a day, while 0.02% of the population will get affected at the poverty line of $3.3 a day and 0.04% of the population will get affected at the poverty line of $5.5 a day.
The report said that targeted and time-bound cash transfers are the most effective policy tool to address the impact of the ripple effects of the war. On Tuesday, official data showed that inflation measured by the consumer price index (CPI) has softened in June from May. Data showed that overall inflation eased from 7.04% in May to 7.01% in June while consumer food price inflation eased from 7.97% in May to 7.75% in June.
The central government and some of the state governments have distributed free food grains during the pandemic. Under the Pradhan Mantri Garib Kalyan Anna Yojna, Centre provided five kilograms of free food grains per person every month in addition to the normal quota of food grains under the National Food Security Act. This programme that started in April 2020 will run till September 2022, benefiting 80 crore people for two years and a half. In the initial months of the pandemic, the government had transferred ₹500 a month for three months to women Jan Dhan account holders, benefiting about two million women.
