Welfare measures saved people from the effects of inflation: Nirmala Sitharaman

The report included India, the US, France, Japan and China among countries that had less impact on poverty due to inflation in the context of the ripple effects of the Russo-Ukraine war, which led to disruption of energy and food markets. A UNDP report released last week said rising food prices and energy prices could push 71 million people into poverty globally and named Argentina, Iraq, Sri Lanka and Uzbekistan among high-impact countries.

It also said that a recent comparative evaluation of price and income support measures showed that targeted transfers help poor households cope with price hikes.

“Well-designed programs have worked to ensure that people do not risk going into poverty,” Sitharaman said at a briefing on Tuesday.

The UNDP report studied the impact of inflation growth and support from governments on various poverty lines of less than $1.9 per day, less than $3.3 per day and less than $5.5 per day. The report showed the average impact of poverty as a percentage of a country’s population as a percentage of falling into poverty on each of the three poverty lines and classified nations into low-impact, medium-impact and high-impact categories. India falls in the low influence class.

The report showed that inflation in India would push 0% of the population below the poverty line of $1.9 per day, while 0.02% of the population would be affected by the poverty line of $3.3 per day and 0.04% of the population. Poverty line of $5.5 per day.

The report said that targeted and time-bound cash transfers are the most effective policy tools to address the impact of the war ravages. Inflation, as measured by the Consumer Price Index (CPI), softened in May to June, official data on Tuesday showed. The data shows that overall inflation declined from 7.04% in May to 7.01% in June, while consumer food price inflation declined from 7.97% in May to 7.75% in June.

The central government and some state governments have distributed free food grains during the pandemic. Under the Pradhan Mantri Garib Kalyan Anna Yojana, the Center 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 program, which started in April 2020, will run till September 2022, which will benefit 80 crore people for two and a half years. The government transferred in the early months of the pandemic 500 per month for three months to women Jan Dhan account holders, benefiting about 20 lakh women.

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