What to Read in Indian Express Editorial( Topic and Syllabus wise)

Editorial 1 : Good news in single digits

Context

Poverty fell significantly last year. Much of it was driven by GDP growth.

The Survey data

• The Household Consumption Expenditure Surveys by the National Statistics Office (NSO)for 2022-23 and 2023-24 help estimate recent poverty and inequality trends.
• Using the Rangarajan Committee’s poverty line, monthly per capita spending needed to stay above poverty in rural areas rose from Rs 972 in 2011-12 to Rs 1,940 in 2023-24, and in urban areas from Rs 1,407 to Rs 2,736 over the same period.
• The overall poverty rate (rural and urban combined) dropped sharply from 29.5% in 2011-12 to 9.5% in 2022-23 and further to 4.9% in 2023-24.
• While poverty has steadily decreased at about 2.05 percentage points per year since 2011-12, this is slightly slower than the 2.2 percentage point annual drop seen from 2004-05 to 2011-12.

Data from World Bank

• The World Bank recently released a Poverty & Equity Brief for over 100 developing countries.
• It says India has significantly reduced poverty over the past decade.
• Extreme poverty (living on less than $2.15 per day in purchasing power parity terms) declined from 16.2 per cent in 2011-12 to 2.3 per cent in 2022-23— more than 170 million were lifted above conditions of extreme poverty in this period.
• The number of people below the poverty line criteria for lower-middle-income countries — $3.65 per day — fell from 61.8 per cent to 28.1 per cent.

Determination of poverty

• Poverty is determined by factors such as GDP growth, prices and safety nets.
• GDP growth increased from 7.6 per cent in 2022-23 to 9.2 per cent in 2023-24 — an increase of 1.6 percentage points in one year.
• The consumer price index (CPI) declined from 6.7 per cent in 2022-23 to 5.4 per cent in 2023-24 — a decline of 1.3 percentage points.
• However, food inflation increased from 6.6 per cent to 7.5 per cent during the same period.
• There does not seem to be significant changes in welfare programmes that make up the safety next.
• It appears, therefore, that GDP growth could be a proximate reason for the decline in poverty in 2023-24 as compared to that of 2022-23.

Trends in Poverty Depth and Inequality Reduction

• The depth of poverty in India between 2011-12 and 2023-24 can be better understood by looking at how poverty ratios change with different poverty line cut-offs.
• The main questions are whether poverty is falling as fast when the poverty line is raised, and how far below the line the poor actually are.
• Between 2011-12 and 2023-24, the overall poverty ratio (rural and urban) dropped by 24.6 percentage points.
• Though the headcount ratio is often criticized for not showing how poor people are, data reveals that over half of the poor lie just below the poverty line — between 75% and 100% of it. In 2022-23, 56% of rural and total poor were in this group, while many non-poor were just above the line (115% to 125%).
• Inequality in consumption also decreased during this period.
• The Gini coefficient, which measures inequality, dropped from 0.310 in 2011-12 to 0.282 in 2022-23, with a bigger drop in urban areas.

Conclusion

To conclude, there has been a significant decline in poverty. The poverty ratio is now in single digits. The overall inequality in consumption expenditure has come down a bit. The analysis shows that most of the poor are concentrated around the poverty line — this makes poverty more manageable.

 

Editorial 2 : For IMF and World Bank, on Pakistan, a query

Context

Multilateral agencies need to introspect about need and justification for aid to Pakistan.

Role of multilateral agencies

• As tensions between India and Pakistan rise, serious questions emerge about the role of multilateral agencies like the IMF and World Bank.
• These institutions continue to offer economic aid to Pakistan, despite repeated warnings that this could be a case of good money chasing bad.
• For instance, the World Bank plans to give $20 billion over the next 10 years, while Pakistan’s current borrowing from the IMF stands at $8.5 billion.
• There is a real concern that new loans are being used to repay old ones, creating a cycle much like a Ponzi scheme.

Questionable Aid Utilization

• The IMF’s Extended Fund Facility (EFF)is meant to support countries with serious payment issues, helping with structural reforms.
• The World Bank claims its lending goes to causes like education and climate resilience.
• However, there is poor data verification by these agencies or third parties, weakening transparency. Aid money’s end use often remains unknown.
• Pakistan’s Federal Consolidated Fund (FCF) — like India’s Consolidated Fund— should ideally promote transparency.
• But unlike India, Pakistan’s parliament cannot vote on it and has limited oversight. This allows funds to be withdrawn without adequate scrutiny or accountability.

Spending Priorities and Lack of Accountability

• In 2024-25, Pakistan allocated $10 billion to defence — an 18% increase from the previous year.
• Even as its economy weakens, the country remains among the top arms importers.
• With per capita income falling to $1,459 in 2023, its per capita defence spending is still high at $41 — only slightly less than India’s $60, despite India’s much stronger economy and defence budget of over $86 billion.
• The concern is whether aid is indirectly enabling excessive defence spending, empowering military control, and fueling corruption.
• Funds withdrawn from the FCF might be disguised under legitimate causes due to weak oversight.
• World Bank data showing Pakistan’s defence spending as 3.5% of GDP appears misleading under these circumstances.

Cross-border Terrorism and FATF’s Role

• India has long protested that such aid might be misused to support cross-border terrorism.
• This concern intensified when the FATF (Financial Action Task Force) removed Pakistan from its grey list in 2022, citing its “high-level political commitment” to reforms.
• India believes the FATF should ensure Pakistan takes “credible, verifiable, and irreversible” action against terrorism, and align with Asia Pacific Group protocols.

Global Security Threats

• Two key issues demand urgent attention.
• First, democratic nations must end their moral hesitation in acting against a nuclear-armed countrythat once declared it would eat grass to achieve nuclear status even while supporting proxy wars.
• Second, Pakistan may be using multilateral aid to fuel global instability and economic terrorism, similar to Iraq in the past.
• The rise of Asim Munir as Field Marshal signals a potential return to military dictatorship and increases risks of nuclear black-market activity.

Conclusion

The world must not ignore the potential misuse of aid. India’s position is clear: national honour is no longer dictated by trade terms. Multilateral agencies must now act responsibly and ensure strict monitoring of aid before it fuels greater global threats.