Policies, Reforms and Laws for Higher HSI Chapter: 15 POLICIES, REFORMS AND LAWS FOR HIGHER HSI The objective of this Chapter is to identify policies, reforms, and laws to improve sub­components of the HSI which have contributed more to the fall in the HSI after 2015-16 or are relatively low in comparison to other countries. The presentation of the financing plan under the charter of the economy in the previous Chapter has quantified the additional resources that can potentially become available to achieve the improvements in these sub-components. 15.1 Alleviating Poverty Following COVID-19 and the disastrous floods, there has been a quantum jump in the incidence of poverty to above 40% of the population. There is the risk that it could rise further in the coming months in the presence of severe inflation, especially of food items, and lead to widespread protests. Already, the estimated‘poverty gap’ is Rs 1700 billion, equivalent to 2% of the GDP, as shown in Box 15.1. Cash transfers from the BISP are able to cover only 24% of this gap. Box 15.1: Size of the Poverty Gap The incidence of poverty in Pakistan is likely to have approached 40% of the population after the negative impact of the floods and earlier due to COVID-19. Therefore, almost 12 million households are below the poverty line today, based on the cost of meeting minimum basic needs, especially nutrition. The poverty gap is the difference between the poverty line and the actual income of a typical household. This gap is estimated at Rs 11,820 per household, with the poverty line at Rs 40,500 per month. Therefore, the total estimated poverty gap for the 12 million households is Rs 1702 billion in 2022-23. The cash transfers to poor households during the year are projected at Rs 400 billion. This is equivalent to only 24% of the national poverty gap. Implementation of the Financing Plan can lead to an increase in public pro-poor spending from 1% of the GDP to 2.5% of the GDP. This is a sizeable increase and will enable the launching of various initiatives for generally tackling poverty and for improving the welfare of special underprivileged groups in the population. These initiatives are described in Chart 15.1. 119