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Rediff.com  » Business » India's poverty rate may 'fall' to 24% by 2015

India's poverty rate may 'fall' to 24% by 2015

June 23, 2010 18:52 IST

The global financial crisis has hit the realisation of Millennium Development Goals hard with loss of employment and food inflation slowing down the progress and an additional 64 million people expected to be thrown into extreme poverty by 2010-end relative to a no-crisis scenario.

"Poverty rates will be slightly higher in 2015 and even beyond, to 2020, than they would have been had the world economy grown at its pre-crisis pace," says a UN MDG report released on Wednesday.

The report said the progress against hunger has been impacted more severely by the economic turmoil with skyrocketing food prices and falling incomes swelling the ranks of undernourished.

"The ability of the poor to feed their families was hit consecutively by skyrocketing food prices in 2008 and falling incomes in 2009, and the number of malnourished already growing since the beginning of the decade may have grown at a faster pace," the report says.

Food prices spiked in 2008 and falling incomes due to the financial crisis further worsened the situation.

According to estimates of the Food and Agricultural Organisation globally, the number of people who were undernourished in 2008 could have been as high as 915 million and exceeded 1 billion in 2009.

South Asia, with India as a predominant player, has not faired well on most of the goals' fronts, with its record just above sub Saharan Africa.

However, the report is optimistic that progress can be made in reducing hunger and poverty by 2015, spurned largely by China in Asia.

"Poverty rates in China are expected to fall to around five per cent by 2015. In India, poverty rates are expected to fall from 51 per cent in 1990 to 24 per cent in 2015, and the number of people living in extreme poverty will likely decrease by 188 million," the report says.

The world could have faired much better on the MDGs if the global financial crisis had not occurred.

The Millennium Development Goals (MDGs) are eight international development goals that all 192 UN member states agreed to achieve by the year 2015.

They are eradicating extreme poverty and hunger, achieving universal primary education, promoting gender equality and empowering women, reducing Child Mortality Rate, improving maternal health, combating HIV/AIDS, malaria, and other diseases, ensuring environmental sustainability and developing a global partnership for development.

Estimates suggest that the crisis will leave an additional 50 million people in extreme poverty in 2009 and some 64 million by the end of 2010 relative to a no-crisis scenario, principally in sub-Saharan Africa, Eastern and South Eastern Asia.

The crisis also threw millions into a scenario of vulnerable employment and in the unorganised sector.

"The positive downward trend in vulnerable employment was interrupted by deteriorating conditions on the labour market following the financial crisis," the report says.

For many wage and salaried workers who lost their jobs, as well as first time job seekers who entered the labour market in the midst of the crisis, own-account and unpaid family work are options of last resort.

"The ILO estimates the global vulnerable employment rate in 2009 to be between 49 per cent and 53 per cent, which translates into 1.5 billion to 1.6 billion people who are working on their own or as unpaid family workers worldwide."

The goal of fighting hunger also met a roadblock with the progress made since 1990s watered down by the crisis. According to the report, since 1990, developing regions have made some progress towards the MDG target of halving the proportion of people suffering from hunger. The share of undernourished populations decreased from 20 per cent in 1990-1992 to 16 per cent in 2005- 2007.

However, progress has stalled since 2000-2002. Hunger may have spiked in 2009, one of the many dire consequences of the global food and financial crisis.

"In 2005-2007, the last period assessed, 830 million people were still undernourished, an increase from 817 million in 1990-1992," it said.

In the field of child mortality rate, India witnessed improvement but it was slow and highlighted disparity.

"Two states -- Tamil Nadu and West Bengal -- have reduced the child mortality rate by 70 to 56 per cent respectively but economically better off states like Maharashtra and Gujarat have shown almost no improvement," said Jayati Ghosh, professor of economics at the Jawaharlal Nehru University.

Maternal health and mortality rate continues to be another dark spot for South Asia, where only one in four rural women will have access to medically aided deliveries. There was some good news in the combating the spread of HIV AIDS, in which case the death rate and incidence has started to come down but the rate of new infections continue to outstrip access to treatment, according to the report.

Lack of access to sanitation is another area of concern where sufficient progress has not been made.

"In rural South Asia, only a quarter of people have access to sanitation. Improvement has been witnessed in the case of slum dwellers but that is perhaps more because of the change in definition of slums," Ghosh said presenting an analysis of the report.

The UN report cites big gains in getting children into primary schools in many poor countries, especially in Africa, strong interventions in addressing AIDS, malaria and child health and a good chance to reach the target for access to clean drinking water.

But also traces the poor record in some other fields like only half of the developing world's population has access to improved sanitation, girls in the poorest quintile of households are 3.5 times more likely to be out of school than those from the richest households, and four times more likely than boys from this background.

It also says that less than half of the women in some developing regions benefits from maternal care by skilled health personnel when giving birth.

The report also says that the sharpest reductions in poverty worldwide continue to be recorded in East and South East Asia where MDG target of halving extreme poverty has already been met, but most South Asia is in danger of missing the target.

 South Asia also has a large percentage of people in so-called vulnerable employment, characterised by inadequate earnings, substandard working conditions and a lack of formal work arrangement and benefits.

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