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  Opinion   Columnists  28 Feb 2024  Patralekha Chatterjee | Acute poverty falls in India, but not extreme inequality

Patralekha Chatterjee | Acute poverty falls in India, but not extreme inequality

Patralekha Chatterjee focuses on development issues in India and emerging economies. She can be reached at
Published : Feb 29, 2024, 12:00 am IST
Updated : Feb 29, 2024, 12:00 am IST

Amidst political narratives of progress, a recent survey reveals stark economic disparities, fueling debate on India's development trajectory

The latest household survey offers some stark facts about the gaps -- between the richest and the poorest, between states, between cities and villages and between social groups.
 The latest household survey offers some stark facts about the gaps -- between the richest and the poorest, between states, between cities and villages and between social groups.

Everyone loves a survey, especially in a paradox-ridden country. Take the survey that has been making news and is fast emerging as potent campaign fodder as the Lok Sabha elections draw nearer. After a gap of 11 years, the National Sample Survey Office (NSSO) has released data on household consumption expenditure in the country. It is a preliminary fact sheet, not the detailed report yet. But in a sharply polarised landscape, both the ruling Bharatiya Janata Party (BJP) and its opponents have jumped on to it to sell their own political narratives. On offer are dramatically different images of India.

The “good news” emanating from the Household Consumption Expenditure Survey (HCES), conducted during August 2022 to July 2023, and flagged by government spokespersons, is about a dramatic reduction in poverty, about per capita monthly household spending more than doubling in 2022-23 compared to 2011-12, about Indians who are eating better and have more disposable incomes. There is data to buttress some of these assertions -- Indians are indeed spending less on food as a percentage of their monthly per capita consumption expenditure (MPCE) and more on clothes, toiletries, durable goods, etc. They are spending more on dry fruit -- up from 0.58 per cent of the MPCE in 2011-2012 to 1.15 per cent in 2022-23.

All this is part of the India story. But it is not the full story. If everything in the country is so “shiny”, why do the poorest five per cent of rural India -- about seven crore people -- spend only Rs 46 per day, asked Congress president Mallikarjun Kharge.

That a survey released on the eve of elections becomes a political tool should surprise no one. But there is also the citizen’s perspective. One basic question leaps out: is India progressing towards better living standards for all citizens? Here, the picture is a mixed one.

Clearly, extreme poverty is declining across vast swathes of the country. But extreme inequality is not. Extreme inequality matters because it comes in the way of the country realising its full potential.

The latest household survey offers some stark facts about the gaps -- between the richest and the poorest, between states, between cities and villages and between social groups.

The bottom five per cent of India’s rural population has an average MPCE of only Rs 1,441; it is Rs 2,087 in the urban areas; the top five per cent of India’s rural and urban population has an average MPCE of Rs 10,581 and Rs 20,846, respectively.

Among the states, Sikkim has the highest MPCE (rural – Rs 7,787 and urban – Rs 12,125); Chhattisgarh has the lowest (rural – Rs 2,575, urban -- Rs 4,557), says the report.

The latest HCES data also reflects the sharp cleavage between social groups. The Scheduled Tribes and Scheduled Castes continue to trail behind others. In rural areas, the Scheduled Tribes reported the lowest MPCE at Rs 3,098, followed by Rs 3,571 for the Scheduled Castes.

It is interesting to look at changing patterns of household spending on food. The share of cereals and pulses within overall expenditure on food has reduced sharply, both in villages and cities. The MPCE share spent on cereals fell to 4.9 per cent in 2022-23 from 10.7 per cent in 2011-12. Part of the reason can be attributed to the government’s free foodgrain schemes. It is also true that more protein-rich dairy products, eggs, fish, meat, and fresh fruits are being consumed.

That said, there are questions, troubling takeaways, and much that we do not know.

For example, when we say Indians are moving towards better food, are we factoring in the sharp spike in consumption of ultra-processed food? The HCES 2022-2023 shows that Indians in rural and urban areas are consuming greater quantities of beverages and ultra processed food that are unhealthy. The share of expenditure on “beverage, processed food, and others” has gone up from 7.9 per cent of the total MPCE in 2011-12 to 9.4 per cent of the same. Alongside, expenditure on “pan (betel leaf), tobacco, & intoxicants” has risen from 3.2 per cent to 3.7 per cent in the same period.

This is happening against a backdrop of rising obesity among adults and children and an alarming spike in lifestyle diseases in the country. The latest household consumption survey shows rising expenditure on medical treatment (both hospitalisation and non-hospitalisation) in both rural and urban areas.

There is another very important dimension: gender. The fact sheet does not tell us anything about intra-household food consumption or allocation of resources. We need more granular data on who is eating what, when and how much to be able to conclusively say if diets have improved for all Indians. Ditto with the data on conveyance. Both urban and rural Indians are spending more on conveyance. Overall, spending on conveyance has jumped from 4.2 per cent of the MPCE in 2011-12 to 7.3 per cent of the MPCE in 2022-23.

The question: is this sharp spurt in expenditure about greater mobility or about increase in fuel costs and rising inflation? Further, is the extra money spent on transport leading to greater freedom of movement and opportunities for women as well as men? The most recent National Family Health Survey (NFHS-5. 2019-2021) tells us that only 42 per cent of women in the 15-49 age group reported enjoying “freedom of movement”. That means being able to go alone to the market, health facility, and places outside the village or community. This marked a very slight increase from 41 per cent (NFHS-4, 2015-16).

There are more worrying takeaways. Indian families are cutting down on expenditure on education. The factsheet does not tell us why, but some analysts say the data in HCES 2022-2023 could well be reflecting the after effects of the Covid-19 pandemic or pandemic effect. Many children were pulled out of private schools and put into government schools. “Many children did not resume private schooling after that… there was a shift to govt schooling/cheaper options noted during those years. Many small private schools were shut down or handed over to the state,” says education strategy expert Meeta Sengupta. Clearly, we need much more research on why expenditure on education has come down.

As the poll season kicks off, data wars are going to intensify. There are great stories tucked within a survey. It depends on which story one wants to listen to, whether one has the appetite to listen to all the stories, and ask about the ones that are not being told loud enough.

Tags: nsso survey, economic disparities, household consumption expenditure, political campaigns