Poverty and Shared Prosperity Report 2020 | UPSC

Poverty and Shared Prosperity Report 2020 | UPSC


Poverty and Shared Prosperity 2020 : India stopped counting poor; now the world in bind on how to achieve zero poverty by 2030

      WHY IN NEWS:

COVID-19 impact: World will have 150 million ‘new extreme poor people’ in 2021



For PRELIMS it is important to note key points like percentage fall and rise in poverty with respect to previous report , Publishers , timeline of the report etc.

For MAINS analyse the report as if you have been asked to prepare a report on Indian poverty and Standard of living .

Note down the critical comments to conclude and remember this report for a long-long time . Try to embed such reports in your answer . Let us dive in !


This is nearly twice the number of ‘new extreme poor’ estimated by the World Bank in April 2020


  • The Poverty and Shared Prosperity series provides a global audience with the latest and most accurate estimates on trends in global poverty and shared prosperity.
  • For more than two decades, extreme poverty was steadily declining.
  • Now, for the first time in a generation, the quest to end poverty has suffered its worst setback.

The report presents new estimates of COVID-19’s impacts on global poverty and inequality.

  • Pandemic-related job losses and deprivation worldwide are hitting already-poor and vulnerable people hard.
  • The report signifies  partly  changing the profile of global poverty by creating millions of “new poor.”


Poverty and Shared Prosperity 2020 : Reversals of Fortune


World Bank


Poverty and Shared Prosperity is a biennial report by World bank.


The world will have 88-115 million ‘new extreme poor people’ in 2020 due to the novel coronavirus disease (COVID-19) pandemic.

  • The number could rise to as many as 150 million by 2021.
  • Six months ago, 40-60 million people were estimated to become extremely poor in 2020.
  • This is the first time in 20 years that global poverty rates will go up.

Global extreme poverty rate is projected to rise by around 1.3 percentage points, to 9.2 per cent in 2020.

  • If the pandemic would not have been there, the poverty rate was expected to drop to 7.9 per cent in 2020.
  • This is nearly twice the number of ‘new extreme poor’ estimated by the World Bank in April 2020.
  • Most of the ‘new extreme poor’ will be in countries that already have high poverty rates.
  • Several middle-income countries will see significant numbers of people slip below the extreme poverty line.
  • About 82 per cent of the total will be in middle-income countries, according to the new World Bank estimates.



  • Decision (to scrap the 75th round of survey by NSO) leaves an important gap in understanding poverty in the country (India).
  • This approach results in a lower national poverty estimate of 9.9 percent in 2017, with a 95 percent confidence interval of between 8.1 and 11.3.
  • The India and South Asia estimates are reported for the widest range of estimates derived from these methods.

For India, the values range between 8.1 percent and 11.3 percent nationally, that is, between 109 million and 152 million people.

  • This value would translate to between 7.7 percent and 10.0 percent poor in South Asia, that is, between 137 million and 180 million people.
  • Neither approach is without limitations.
  • Both these assumptions have been the subject of recent debate in India.
  • The survey-to-survey method takes advantage of the variation in the survey data to capture changes in the distribution of welfare.
  • However, if the imputation is done between periods too far apart, it may fail to capture important changes in the behavior of markets.


  • Important structural changes in the Indian economy between 2011 and 2017 may not be captured by these imputation techniques.
  • Thus, the range of poverty estimates could be even wider than those presented in this report.
  • The limitations of the methods described add to concerns about the lack of access to survey data to measure standards of living in India.

The lack of data creates doubts among the general public, obstructs scientific debate, and hinders the implementation of sound, empirically based development policies.

  • There is no alternative to timely, quality assured, and transparent data for the design and monitoring of antipoverty policies.


Poverty and Shared Prosperity Report 2020

  • When 52 million people were lifted out of poverty between 2015 and 2017, the rate of reduction slowed to less than half a percentage point per year between 2015 and 2017.

Global poverty had declined at the rate of around 1 percentage point per year between 1990 and 2015.

  • In two-and-a-half decades (1990-2015), the extreme poverty rate declined by 26 percentage points.


  • Shared prosperity focuses on the poorest 40 percent of a population (the bottom 40) .

It is defined as the annualized growth rate of their mean household per capita income or consumption.

  • Gains in shared prosperity, however, were unevenly distributed across country income categories and regions.
  • Average global shared prosperity may stagnate or even contract over 2019-2021 due to the reduced growth in average incomes.


Poverty and Shared Prosperity Report 2020

  • Under the COVID-19-baseline scenario, 6.7 percent of the global population will live under the international poverty line in 2030.
  • As efforts to curb the disease and its economic fallout intensify, development agenda in low- and middle-income countries must be put back on track.


Poverty and Shared Prosperity Report 2020 | UPSC Report

  • Most countries have experienced drops in labor incomes.
  • Income reductions have quickly translated into reduced consumption.

People who are already poor and vulnerable are bearing the brunt of the crisis.

  • Without strong action, COVID-19 will reduce inclusive growth and deepen inequality.
  • Conflict and climate change may force rising numbers of people into poverty in the medium term.


  • Policy responses need to reflect the changing profile of the poor.

Poverty action needs to address hot spots of conflict, climate change, and COVID-19.

  • Countries are taking action, innovating, and learning as they go.
  • Emergency action and long-term development can share lessons.


Poverty Report

  • Increasing numbers of urban dwellers are expected to fall into extreme poverty.
  • While less than a tenth of the world’s population lives on less than $1.90 a day.
  • Close to a quarter lives below the $3.20 line and more than 40 per cent.
  • Almost 3.3 billion people — live below the $5.50 line.

India, along with Nigeria, is considered to have the largest number of the poor in the world.

  • India tops the global list in terms of absolute number of poor, going by the last national survey of 2012-13.
  • Average income of people is projected to decline and this will hit the poorest the most .

      IASbhai WINDUP: 

  • This report paints a sobering picture of the prospect of eliminating extreme poverty by 2030.
  • The global poverty estimates show that poverty reduction continues to slow, confirming previous predictions .
  • The prediction was- the world will not reach the goal of lowering global extreme poverty to 3 percent by 2030 unless swift, significant, and sustained action is taken.

By not having latest poverty data, India joins the ranks of countries termed as ‘conflict-affected’ and ‘fragile’ in World Bank terminologies.

  • With just 10 years left to achieve the SDG I, it is an immediate crisis for the world.
  • Without India’s latest data, there can’t be an objective global estimate of poverty.
  • And without this, one can’t measure what is the level of poverty to be reduced nationally as well as globally.
  • It almost hinted at the fact that we precisely don’t know the level of poverty to be reduced to meet the SDG I.
     SOURCES:DownToEarth | Poverty and Shared Prosperity Report 2020 | UPSC



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