World Bank praises India’s pro-poor digital cash tranfers during Covid , says initiative was ‘remarkable’

World Bank president David Malpass has said that India’s support in the form of targeted transfer to the poor and needy during the Covid 19 pandemic crisis has been remarkable and that other nations must adopt the same model instead of offering broad subsidies.

“Helped by digital cash transfers, India managed to provide food or cash support to a remarkable 85 per cent of rural households and 69 per cent of urban households. South Africa initiated its biggest expansion of the social safety net in a generation, spending USD 6 billion on poverty relief that benefited nearly 29 million people,” Malpass said, adding that half of all spending on energy subsidies in low- and middle-income economies went to the richest 20 per cent of the population, who also happen to consume more energy.

“Choose targeted cash transfers instead of broad subsidies,” he said.

Malpass said that targeted cash transfers are a far more effective mechanism for supporting poor and vulnerable groups: more than 60 per cent of spending on cash transfers goes to the bottom 40 per cent. “Cash transfers also have a larger impact on income growth than subsidies,” Malpass wrote in the forward to a study.

Meanwhile, the United Nations Conference on Trade and Development (UNCTAD) in its recent growth forecast has pegged India’s growth at 5.7 per cent in 2022 and 4.7 per cent in 2023. The Reserve Bank of India last week however, pegged India’s GDP growth for the current financial year at 7.0 per cent. Earlier, it had projected 7.2 per cent. The second quarter growth is projected at 6.3 per cent while the third quarter at 4.6 per cent and the fourth at 4.6 per cent, the RBI projection states.

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