International Labour Organization (ILO) released a working paper on the “Financing gap for universal social protection.”
- The paper discusses the financing gap to achieve Universal Social Protection (USP) in 133 Low and Middle-Income Countries (LMICs).
Key highlights:
- The total financing gap for LMICs to achieve USP is 3.3% of GDP annually.
- This represents a need for an additional US$1.4 trillion per year.
- In 2024, the additional government spending required to achieve USP is 10.6% of their annual government expenditure.
- India specifically requires US$135.3 billion to ensure universal social protection.
Strategies to close the financing gap:
- Domestic resource mobilization, which includes increasing tax revenue and social security contributions.
- Removing explicit and implicit fuel subsidies, and introducing carbon pricing schemes.
- Eliminating illicit financial flows such as money laundering, tax evasion, and financial corruption.
- Effectively managing sovereign debt and creation of new international financing mechanisms.
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