A recent study by the South Asian Network on Economic Modeling (Sanem) highlights a concerning rise in urban poverty over the past five years, despite a decrease observed in rural and national poverty levels. Factors contributing to this surge include the presence of vulnerable populations, escalating commodity prices, inadequate social security programs, and the compounding effects of the Covid-19 pandemic, Russia-Ukraine war, and global energy crisis. The report recommends increased allocation for education, health, and social security programs, along with modernizing the tax collection system.
Data from the study shows that while rural poverty rates decreased from 24.5% in 2018 to 21.6% in 2023, urban poverty rates rose from 16.3% to 18.7% during the same period. Moreover, rising inequality and the impact of Covid-19 on various socio-economic indicators, including food security and employment, underscore the urgent need for comprehensive policy interventions. Therefore, the government needs to expand social safety net programs, increase budgetary allocations for critical sectors, and reform the tax framework to address the growing urban poverty crisis.
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