India has one of largest social safety net programmes

While India and four other middle-income countries have the world's five largest social safety net programmes reaching over 526 million people, around 55 percent of the world's poor or 773 million people still lack safety net coverage.

This despite the fact that a growing number of developing countries are investing in social safety nets to improve the lives and livelihoods of billions of poor and vulnerable people, says a new World Bank Group report.

Calling for action to close this coverage gap, The State of Social Safety Nets 2015, notes that more than 1.9 billion people in 136 low- and middle-income countries are now on beneficiary rolls of social safety net programmes.

In Africa alone, the number of countries setting up social safety net programmes has doubled over the past three years, as evidenced by rigorous evaluations that prove these programmes work.

But three quarters of the poorest people in low- and lower-middle income countries, and more than one-third of the poorest people in middle-income countries, lack safety net coverage and remain at risk.

The report is the second in a series of studies that monitor and report on the growth and coverage of social safety nets in the developing world.

"More countries at all income levels are investing in social safety net programmes because they are transformational," said Arup Banerji, the World Bank Group's senior director for social protection and labour.

"Going forward, more can be done to close the coverage gap and reach the world's poorest by improving the effectiveness of these programmes," he said.

According to the report, the combined spending on social safety nets in 120 developing countries amounted to about $329 billion between 2010 and 2014.

Well-designed programmes are cost-effective, costing countries only between 1.5 percent and 1.9 percent of GDP -- far less than most government spending on fuel subsidies.

Conditional cash transfer programmes account for over 50 percent of the beneficiaries in social safety net programmes, and are now present in 64 countries, a dramatic increase from two countries in 1997, the report noted.

These programmes have major positive spillover effects on the local economy of target communities.

Recent evidence shows that these programmes have a nominal income multiplier ranging from $1.34 to $2.52 for each $1.00 transferred.

School feeding and fee waivers cover around 600 million people, or almost one-third of safety net beneficiaries.

Unconditional cash transfers and conditional cash transfer programmes, including public works, reach 718 million people or 36 percent of global social safety net beneficiaries.

However, the report argues that while the targeting of social safety nets is generally pro-poor, there is significant room for improvement, the report said.

Conditional cash transfers are the best targeted safety net programmes, devoting as much as 50 percent of benefits to the poorest 20 percent of the population, it said.

(Arun Kumar can be contacted at arun.kumar@ians.in)