POVERTY INEQUALITY &

DEVELOPMENT (5.3-5.5)

Group members
 M.RAYYAN
 ZEESHAN AHMED
 SHOAIB HASAN
 M.USMAN NASAR SIDDIQUI
 DEFINITION OF POVERTY

 In simple terms, poverty means not having enough money or access

to resources to enjoy a decent standard of living
 lack of access to healthcare, education or water and
sanitation facilities
 A “poor” person would be anyone whose per capita income or buying
power within a household or family is below the minimum
considered essential for meeting basic human needs. This
minimum is widely known as the “poverty line”.
According to world bank
 “Poverty is pronounced deprivation in well-being, and comprises
many dimensions. It includes low incomes and the inability to
acquire the basic goods and services necessary for survival with
dignity.”
 ABSOLUTE POVERTY
• Absolute poverty refers to a condition where a person does not
have the minimum amount of income needed to meet the
minimum requirements for one or more basic living needs over an
extended period of time. This includes things like:
• Food:
Adults who have a body mass index that is below 17, or children
who are over three standard deviations below a certain age/weight/
height criteria
• Safe drinking water:
Many countries are deprived of the basic facilities of safe drinking
water and shortage of water has also become a global issue
• Sanitation facilities:
Lack of access to toilet facility.
• Health:
Lack of access to any type of health care, including immunizations,
prenatal care, or treatment for serious illnesses
• Shelter:
Kids who live in places where there are more than four people to a
room, adults who live in places with more than three people to a
room, or adults and children who live in places with no floors
• Education:
School-age children who have not in the past or are not currently in
school, or adults who have not attended school and cannot read or
write
• Information:
Lack of access to any type of media, including radio, television, or
computer
• Access to services:
Lack of access to schools, health services, etc.
 GROWTH & POVERTY
• Poverty reduction is one of the most important sustainable
development goals set by the UN in 2015. According to this goal,
Pakistan must reduce its poverty level to half by 2030 from 24.3
percent to 12 percent.
• Pakistan is asking hard efforts to achieve this target although the
COVID-19 pandemic has made it difficult to achieve this goal due to
severe macroeconomic imbalances in the economy.
• This brief provides the consistent data series of poverty in Pakistan
from 1998 to 2019 using the CBN estimation method. If we look at
the historical data, it suggests that poverty has declined to some
extent in Pakistan at the national as well as provincial level.
• Sustained economic growth is considered as the important driver of
poverty reduction and in Pakistan, there is a need to maintain an
economic growth of around 6 percent to 7 percent to alleviate about
30 percent of the population living under poverty.
• It is evident from the statistics that the early 2000s were a period
of high economic growth. Whereas after 2006 GDP grew at a
decreasing rate as compared to preceding years resulting in low
poverty decline and subsequently resulting in a greater number of
potential poor in the country.
• Therefore, this knowledge brief aims to discuss different groups of
poor people present in the country by categorizing these at different
poverty levels. This categorization will help us to get a deep insight
into the state of poverty across the country from 1998 to 2019 and
will help policy-makers to formulate more specific and relevant
policies concerning these different poverty group
 ECONOMICS CHARACTERISTICS OF HIGH POVERTY
GROUP
 
• Findings are that poverty characteristically has a language and is
multidimensional, complex, individual- or context-specific and absolute or
relative. The characteristics of poverty have significant implications for, and
should therefore be taken into consideration
• poverty analysis. The language of poverty reveals the dimensions and
severity of poverty faced by a given community. It also enables poverty
analysts to uphold the dignity of people and minimize misconceptions about
poverty in a society. Lastly, the language of poverty provides an
understanding of the context-sensitive meaning of poverty.
• The multidimensional and complex nature of poverty guides in the selection
of an appropriate poverty worldview for analyzing poverty. Moreover, the
individual- and context-specific characteristic of poverty reflects the
variation in the nature and severity of poverty according to age, gender and
context. Knowledge about the absolute or relative nature of poverty.
 PAKISTAN ECONOMIC GROWTH

GDP growth is projected to ease in FY 2022 (July 2021–June 2022)

following FY 2021’s rebound. A slowdown in domestic demand is
seen weighing on overall growth, while a normalization in foreign
demand will likely cap growth in the external sector. Downside risks
stem from new Covid-19 variants, twin deficits and geopolitical
tensions. Focus Economics panelist project growth of 4.1% in FY
2022, which is unchanged from the previous month’s forecast. In FY
2023, our panel forecasts GDP growth of 4.4%.
 RURAL POVERTY
• Rural poverty refers to poverty in rural areas, including factors of
rural societies, rural economy and political systems that give rise to
poverty found there. Rural poverty is often discussed in conjunction
with spatial inequality between rural and urban areas.
• The Rural Poor: Who Are They?
• The rural poor depend largely on agriculture, fishing, forestry, and
related small-scale industries and services. To understand how
poverty affects these individuals and households, and to delineate
the policy options for poverty reduction, we first need to know who
the rural poor are.
• The rural poor are not a homogeneous group. One important way to
classify the rural poor is according to their access to agricultural
land: cultivators have access to land as small landowners and
tenants, and non-cultivators are landless, unskilled workers. There is,
however, much functional overlap between these groups, reflecting
the poverty-mitigating strategies of the poor in response to changes
in the economy and society.
 How Rural Poverty Is Created?

• Numerous characteristics of a country's economy and society, as

well as some external influences, create and perpetuate rural
poverty:
• Political instability and civil strife.
• Systemic discrimination based on gender, race, ethnicity, religion, or
caste.
• ill-defined property rights or unfair enforcement of rights to
agricultural land and other natural resources.
• High concentration of land ownership and asymmetrical tenancy
arrangements.
• Corrupt politicians and rent-seeking public bureaucracies.
• Economic policies that discriminate against or exclude the rural
poor from the development process and accentuate the effects of
other poverty-creating processes.
• Large and rapidly growing families with high dependency ratios.
 RURAL POVERTY IN PAKISTAN

• Pakistan has a strong tradition of poverty estimation since early

1960s, mostly by independent researchers using the secondary
published data of the household income and expenditure surveys
(HIES). The estimation of poverty based on the micro-data of HIES
was started in 1980s, and the Pakistan Bureau of Statistics (PBS)
was the first public sector institution which estimated the poverty
number from HIES in 1990s by applying Food Energy Intake (FEI)
method on the micro datasets.
POVERTY
ESTIMATES FROM
1998-99 TO 2018-19

When we have a look at

rural/urban
categorization of poverty
estimates we see that
rural poverty is
significantly higher than
urban poverty. The
reason for these higher
poverty figures against
rural areas could be a
greater percentage of
people especially poor
concentration in rural
areas where they usually
do not have access to
health, education, and
employment
opportunities.
 Women & poverty

• Women make up a substantial majority of the world’s poor. If we compared

the lives of the inhabitants of the poorest communities throughout the
developing world, we would discover that virtually everywhere, women and
children experience the harshest deprivation. They are more likely to be poor
and malnourished and less likely to receive medical services, clean water,
sanitation, and other benefits.
• Women constitute majority of the poor and are often the poorest of the poor.
The societal disadvantage and inequality they face because they are
women shapes their experience of poverty differently from that of men,
increases their vulnerability, and makes it more challenging for them to climb
out of poverty. In other words, poverty is a gendered experience —
addressing it requires a gender analysis of norms and values, the division of
assets, work and responsibility, and the dynamics of power and control
between women and men in poor households.
 Women’s Experience of Poverty

• Girls and women in poor households bear a disproportionate share

of the work and responsibility of feeding and caring for family
members through unpaid household work. In poor rural households,
for example, women’s work is dominated by activities such as
firewood, water and fodder collection, care of livestock and
subsistence agriculture
• Women in poor households will often sacrifice their own health and
nutrition, or the education of their daughters, by recruiting them to
take care of siblings or share in other household tasks. This is just
one piece of a pattern of gendered discrimination in the allocation
of resources in poor households.
• Evidence shows that the gender gaps in nutrition, education and
health are greater in poorer households. This lack of investment in
the human capital of girls perpetuates a vicious, intergenerational
cycle of poverty and disadvantage that is partly responsible for the
intractable nature of poverty
• Women’s control over household resources may also be constrained
by the fact that many women from poor households are not paid for
the work they perform in family agriculture or business. For
example, in Mexico, it has been estimated that 22.5% of women in
the agricultural sector and 7.63% of women in the nonagricultural
sectors work full time without pay.
 WOMEN POVERTY IN PAKISTAN
• The developing countries of the world are facing severe problem
of gender inequality which results in absolute poverty, and slow
economic growth. Pakistan is one among them facing the same
problem. The socio-economic factors e.g., high population
growth rate, poor economic conditions, social and cultural
constraints, and political uncertainty greatly deteriorate the state
of poverty in Pakistan.
• According to survey The Gender Development Index (GDI) of
Pakistan stands at 0.745, which shows an improvement over
0.615 in 2000. GDI is a measure of gender gap, showing the
female Human Development Index (HDI) as a percentage of the
male HDI.
• HDI is based on three basic dimensions of human development
– health, knowledge and living standards. Pakistan ranks 154 on
the GDI, which is much below the ranking of its regional
counterparts, i.e., India (131), Bangladesh (133), Sri Lanka (72)
and Indonesia (107).
• Rural Baluchistan has the highest poverty headcount as
compared to its counterparts. Multidimensional poor means not
just having lack of income but also deprivation in terms of
children’s education, women’s health, and family health.
 WOMEN EMPLOYMENT RATES IN PAKISTAN
(2018-2019)

Pakistan had a Gender Inequality Index (GII) ranking of 133 in the

2017. It is not an encouraging sign that female participating in the
labor market is also decreasing with the passage of time, from 15.8
percent in 2014-15 to 14.5 percent in 2017-18. The Labor Force
Survey 2017-18 indicates that women are concentrated in
agriculture with a share of 67 percent, while in manufacturing they
have a share of 16 percent and in community and personal services
they average a share of 14.6 percent. In the case of occupational
groups, women are mostly working as skilled agricultural workers
55 percent, elementary/unskilled workers 18 percent, and craft and
related trade workers 14 percent.
 WAYS TO IMPROVE WOMEN POVERTY IN PAKISTAN

• There is a broad consensus that no country can progress without the

full participation of women in public life. Pakistan stands near the
bottom of women’s participation in the workforce. This lack of
participation is at the root of many of the demographic and economic
constraints that Pakistan faces.
• Increase access to education: Half of Pakistani women have not
attended school. Presently only 10 percent of women have post-
secondary education whereas their chances of working for pay
increase three-fold with post-secondary education compared to women
with primary education. More educated women are also more likely to
get better quality jobs
• Unpaid Care Work and informal economy: Women are 10 times more
involved in household chores, child, and elderly care than men in
PAKISTAN. This leads to women being more time poor and having less
time to spend in gaining skills and getting jobs
• Enabling environment for women-owned businesses: Globally
women-owned businesses are found to hire more women. Pakistan
has only one percent of women entrepreneurs because they
experience several challenges including limited access to finance
and markets.

• Pakistan needs its women to enter the workforce and thrive in

public and economic life. Investment in human capital, gender-
sensitive policies and transforming social norms can change the
status of women’s economic participation and put the country in
the direction of growth and prosperity. Without increasing women’s
participation, Pakistan cannot meet its development targets or
decreasing women’s poverty or reasonably expect to become a
competitive state and society in the 21st century.
ETHNIC MINORITIES, INDIGENOUS POPULATIONS,
AND POVERTY

• A final generalization about the incidence of poverty in the

developing world is that it falls especially heavily on minority ethnic
groups and indigenous populations. 40% of the world’s nation-states
have more than five sizable ethnic populations, one or more of
which faces serious economic, political, and social discrimination. In
recent years, domestic conflicts and even civil wars have arisen out
of ethnic groups’ perceptions that they are losing out in the
competition for limited resources and job opportunities.
• According to worldbank.org Indigenous Peoples and ethnic
minorities represent approximately 5% of the global population, but
account for about 15% of the world’s extreme poor; in some regions
and countries, the proportion of Indigenous Peoples among the poor
soars to 60-70%.
ETHNIC MINORITIES, INDIGENOUS POPULATIONS, AND
POVERTY IN PAKISTAN
 ROLE OF ASIAN DEVELOPMENT BANK IN ELEMENATING
ETHNIC MINORITIES, INDIGENOUS POPULATIONS, AND
POVERTY
• The Asian Development Bank (ADB) regional technical assistance
project (RETA 5953) on Capacity Building for Indigenous Peoples/
Ethnic Minority Issues and Poverty Reduction has two objectives:
o to strengthen ADB’s Policy on Indigenous Peoples through poverty
assessment of these peoples in selected Developing Member
Countries (DMCs)
o and to develop, using participatory methods, an appropriate agenda
for action to ensure poverty reduction for indigenous groups. The
specific objectives are:
• To conduct a poverty assessment of indigenous peoples/ethnic
minorities and examine the Developing Member Countries relevant
national policies and legislation, programs, projects, and initiatives
pertaining to indigenous groups/ethnic minorities as this address
the multifaceted dimensions of poverty.
• Evaluate and assess the impact of Asian Development Bank
interventions that address the vulnerability and poverty of
indigenous peoples/ethnic minorities in the Developing Member
Countries.
• Provide capacity building for government, nongovernment
organizations (NGOs), and indigenous peoples/ethnic minority
groups so that they can actively participate in formulating action
plans as well as in Asian Development Bank sponsored programs
and projects.
 Pakistan Poverty Alleviation Fund (PPAF):

• (PPAF) is a Pakistani Not-for-Profit company based on

the model of public-private partnership. PPAF aims to
promote an effective approach to poverty alleviation
across Pakistan. A few leading multilateral, bilateral,
and international corporate institutions such as the
World Bank contribute to PPAF’s poverty reduction
goal by providing financial support and funds to
promote grass root development.
• This 'Fund' mostly helps by providing microfinance
loans (very small loans) to the very poor households to
help lift them out of poverty. Established by the
Government of Pakistan as an autonomous not-for-
profit company, PPAF began its operations in 2000.
Thus far, it is working across 130 districts in the
country with 130 partner organizations.
• PPAF's poverty graduation approach has been tried and tested
successfully and is supported by the Government of Pakistan and
multiple donors. To date, the organization has disbursed USD 2
billion through grants and financial services in various programmers
targeting the vulnerable communities and areas of the country. It is
proud to have made such a vast impact through its various
approaches and focused operations and aims to continue building
and nurturing partnerships directed towards eliminating poverty in
Pakistan and empowering the local population.
 Poor Countries:
• GDP per capita is considered an important method to compare
how poor or wealthy countries are in relation to each other. While
GDP per capita is often considered the standard metric, by
compensating for differences in living costs and rates of inflation,
the purchasing power parity (PPP) can better assess an
individual’s buying power in a particular country. The negative
relationship between poverty and per Capita income.

• If higher incomes can be achieved, poverty will be reduced, if only

because of the greater resources that countries will have
available to tackle poverty problems and the growth of civil
society and the voluntary sector.
• The five poorest countries are all from Sub-Saharan Africa, a
region which continues to be held back by problems such as
institutional weakness, poor economy, poor infrastructure, a lack
of human capital, low-standard of living, lack of technology, low
level of education, and health care services.
Education:
• Many young people in developing countries who have not been able
to complete a quality education are lacking the foundational and
high level skills for work and life. In develop countries, most of the
people are literate but they can read and write with difficulties. Child
labor is another factor of lack of education because mostly children
work in fields to support their families. According to Govt. of Canada
website, around 59 million children in developing countries do not
have access to basic education. The quality of education is also a
key concern: 250 million children are unable to read, write or count,
even after four years of schooling.
Health Care:
• A lack of medicine, water and electricity; shortages of doctors;
prohibitive costs: they all stand in the way of providing good quality
healthcare to all. The World Health Organization estimates that in
22 countries, the entire healthcare systems need to be rebuilt.
According to World Economic Forum, Every year nearly 6 million
people die in developing countries from low quality healthcare - this
is how we help them.
Technology gap:
• Use of some new technologies, such as mobile phones, has risen
quickly, however, some technologies have spread very slowly. About
75% of low-income countries have fewer than 15 personal
computers for every 1 000 people. “Weak basic infrastructure
systems limit the range of technologies that can be employed in
many countries. Policies should ensure that critical enabling
services such as roads and electricity are widely available, whether
delivered by the private or public sector. In Sub-Saharan Africa, just
8% of the rural population has access to electricity," noted World
Bank lead economist Andrew Burns.
 Poorest Countries of the world
• According to world population, Africa is the poorest continent on
Earth. Moreover, the competition is not particularly close. Economic
insecurity, political instability and corruption, civil wars, and terrorist
insurrections have left millions of Africans living in abject poverty.
Of the 27 countries worldwide currently ranked by World Bank
as Low Income Economies, indicating they are the very poorest
countries in the world, 23 are located in Africa. Africa also includes
21 of the world's 55 Lower Middle Income countries.
• Two metrics often used to determine the wealth of a country are its
gross domestic product (GDP) per capita and gross national income
(GNI) per capita.
CALCULATING GDP & GNI PER CAPITA:
 TOP TEN POOR COUNTRIES BY GDP & GNP

• BY GDP • BY GNP

• Burundi ($771) • Burundi ($270)

• Somalia ($875) • Somalia ($310)
• Central African Republic • Mozambique ($460)
($980) • Madagascar ($480)
• Democratic Republic of • Sierra Leone ($490)
the Congo ($1,131) • Central African Republic
• Niger ($1,263) ($510)
• Mozambique ($1,297) • Liberia ($530)
• Liberia ($1,428) • Niger ($540)
• Malawi ($1,568) • Democratic Republic of
• Madagascar ($1,593) the Congo ($550)
• Chad ($1,603) • Malawi ($580)
 Policy option on Income Inequality and Poverty

• There is widespread concern that economic growth has not been

fairly shared, and that the economic crisis has only widened the gap
between rich and poor. The basic objective of economic
development is improvements in the living standards of the
common man and for that just economic growth would not be
sufficient. This is because the growth and income distribution jointly
determine improvements in the living standards of the common
man
 Areas of Intervention

• Functional Distribution:
• The functional distribution of income refers to the amounts of
income paid to various individuals or households. A single individual
may receive income from more than one factor of production or
from one source. A man may get income by offering his labor
service, from renting his property (land or building) and from his
holdings of company shares or government bonds.
• The Size Distribution:
• When income is classified according to the size of income received
by each households irrespective of the sources of that income, we
are dealing with the size distribution of income. Progressive income
taxes are imposed and subsidies are paid to reduce income
inequality.
• Reduce the size of distribution at the upper levels:
• Through progressive taxation of personal income and wealth.
Such taxation increases government revenues that decrease
the share of disposable income (income that is available to
households for spending and saving after personal income
taxes have been deducted) of the very rich class. Revenues
that can, with good policies, be invested in human capital and
rural and other lagging infrastructure needs, thereby
promoting inclusive growth and economic development.
• Increasing the size of distribution at lower levels
• Through public expenditures of tax revenues to raise the
incomes of the poor either directly or indirectly through
public employment creation such as local infrastructure
projects or the provision of primary education and health
care. Such public policies raise the real income levels of the
poor above the poverty line.
Altering the Functional Distribution of Income through
Relative Factor Prices:
• According to neo-classical theory, the income of any factor of
production (and hence the amount of the national product that it is
able to command) depends on the price that is paid for the factor
and the amount that is purchased or hired.
• For instance, total wage income = the wage rate x the number of
workers employed. Thus factor pricing and income distribution are
interrelated. If the wage rate rises and more workers are employed
at a higher wage, the share of labor in national income will also rise
and workers will now be able to buy those things which they could
not previously afford. Due to this most of the people come out from
poverty and growth rate may high and rise in economic
development.
 Income distribution

• In economics, distribution is the way total output, income or

wealth is distributed among individuals or among the factors of
production such as land, labor and capital
• Distribution of wealth and income is the way in which the wealth
and income of a nation are divided among its population
• The ultimate cause of the unequal distribution of personal incomes
in most developing countries is the unequal and highly concentrated
patterns of asset ownership (wealth) in these countries
• Human capital in the form of education and skills is another
example of the unequal distribution of productive asset ownership.
Public policy should therefore promote wider access to educational
opportunities (for girls as well as boys) as a means of increasing
income-earning potential for more people
• Policymakers need to have a strong knowledge base. Essential to
the process is a means to find out and utilize what the poor know
about their own conditions of poverty. Practitioners stress that the
more that people living in poverty are engaged in setting the agenda,
the more effective programs to increase their assets and
capabilities
 Causes of income inequality
Causes of income inequality include:
• labor economics
• tax policies, other economic policies
• labor union policies
• Federal Reserve monetary policies & fiscal policies
• the market for labor
• abilities of individual workers
• technology and automation
• education, globalization
• gender bias, racism, and culture
 How to improve income inequality?

Taxes
• The progressive income tax takes a larger part of high incomes and a smaller
percentage of low incomes so that the poor pay less on taxes and keep larger
percentage of their income, whereas the rich otherwise. The government uses
the tax revenue also for the necessary and beneficial activities for the society.
Let's say that everybody in society would have the same benefit from this activity,
but the rich pay more for it, so this tax reduces the inequality twice.
In-kind transfers
• If a cash is given to a poor person, he or she may not make "the best" choice in
case, what to buy for this extra money. Then, there is the solution in form of the
food stamps or directly the food as an in-kind transfer to the poorest.
Housing subsidies
• The rent and upkeep of housing form a large portion of spending in the lower
income families. Housing subsidies were designed to help the poor obtaining
adequate housing.
Welfare and Unemployment benefits
• This provides actual money to the people with very low or no income and gives
them an absolute freedom in decision-making how to use this benefit. This
works best if we assume that they are rational and make decisions in their best
interest.
• The world’s ten richest men more than doubled their fortunes from
$700 billion to $1.5 trillion —at a rate of $15,000 per second or $1.3
billion a day— during the first two years of a pandemic that has seen
the incomes of 99 percent of humanity fall and over 160 million
more people forced into poverty.
 
• Inequality in income and asset is also a significant factor behind
crime and social unrest in the society like what we are seeing in
Karachi. Hike in street crime and other crime have increased rapidly
since the pandemic has hit because people lost their jobs and our
economic system is not so much advanced to deal with
unemployment and inflation
 Pandemic & income inequality
• The COVID-19 pandemic again shows us that there can be
widespread negative economic effects of a global pandemic. At this
stage, there are various papers on how the COVID-19 pandemic has
affected economic and financial indicators
• It is observe that the COVID-19 pandemic has increased commodity
price volatility. And the COVID-19 pandemic has slowed down the
world's macroeconomic activity
• The impact can be positive or negative. The first direct effect on the
mortality rate. The Spanish Flu in 1918 mostly affected young men,
and there was a direct impact of this pandemic on labor supply and
labor income. However, the pandemics in the 21st century have
mostly affected older people so there are negligible impacts of
these pandemics on labor income. The first channel of pandemics
can decrease income inequality in developing economies
• The second channel is the decline of households' income and the
rise of precautionary savings. According to World Bank, the lock-
down policies and the isolation measures during the COVID-19
pandemic caused a decline in the households' income. This issue
leads to lower household consumption and increased precautionary
savings but this increase in the precautionary savings can also hurt
returns on the capital, affecting income inequality. The second
channel of pandemics can also reduce income inequality in
developing economies
• The third channel is fiscal policy. During the COVID-19 crisis,
governments introduced fiscal stimulus packages to increase their
credibility and to mitigate the pandemics' negative effects on
households. However, these fiscal stimulus packages will lead to a
rise in public debts or tax rates in the forthcoming years. The third
channel of pandemics can increase income inequality in developed
economies
• The World Bank has approved financing for vaccine purchase and
deployment in over 64 countries, amounting to $6.3 billion. So far,
 almost 300 million COVID vaccine doses are under Bank contract
for developing countries
• Overall, the World Bank Group is supporting over 100 countries to
help address the health emergency, strengthen health systems and
pandemic preparedness, protect poor and vulnerable people,
support businesses, create jobs and jump start a green, resilient,
and inclusive recovery.
• The 2022 World Economic Situation and Prospects (WESP) report,
produced by the UN Department of Economic and Social Affairs
(DESA), cites a cocktail of problems that are slowing down the
economy, namely new waves of COVID-19 infections, persistent
labor market and lingering supply-chain challenges, and rising
inflationary pressures.
• The slowdown is expected to carry on into next year. After an
encouraging expansion of 5.5 per cent in 2021 — driven by strong
consumer spending and some uptake in investment, with trade in
goods surpassing pre-pandemic levels — global output is projected
to grow by only 4.0 per cent in 2022 and 3.5 per cent in 2023.
Taxation
 Transfer payment

• A transfer payment is a one-way payment to a person or

organization which has given or exchanged no goods or services for
it. This contrasts with a simple "payment," which in economics
refers to a transfer of money in exchange for a product or service
• Generally, the phrase "transfer payment" is used to describe
government payments to individuals through social programs such
as welfare, student grants, and even Social Security. However,
government payments to corporations—including unconditional
bailouts and subsidies are not commonly described as transfer
payments
 Types of transfer payment

• Subsidy A payment by the government to producers or distributors in

an industry to prevent the decline of that industry, to reduce the prices
of its products
• The most well-known form of transfer payment is likely Social Security
payments, whether for retirement or disability. These are considered
transfer payments even though most recipients have paid into the
system during their working lives. Similarly, unemployment payments
are also considered transfer payments.
• There are many other types of transfer payments. They can be made
from one person to another or even from an individual to an
organization. These can include individual donations to charities or
non-profit organizations, or even a simple cash gift from one person to
another
• Other human development program like KAMAYAB JAWAN and SEHAT
CARD, EHSAAS Program, NAYA PAKISTAN housing scheme are some
of the program started by government to facilitate the youth and to
enable them to start their own business and become an entrepreneur
and contribute towards the economy
THANK YOU !