The Great Indian Poverty Debate - Act I, Scene 2

The release of the 2023-24 household consumer expenditure survey fact sheet and its use to derive fresh poverty estimates have opened a new scene in the poverty debate

- P C MOHANAN AND AMITABH KUNDU

A recent State Bank of India (SBI) study says that India's poverty was well below 5 per cent in 2023-24. This was after the government released a fact sheet from the 2023-24 Household Consumer Expenditure Survey (HCES), recording a decline in poverty from 7.2 per cent in 2022-23 to 4.9 per cent in rural areas, and from 4.6 per cent to 4.1 per cent in urban areas during the same period.

The decline in poverty at the national level, by 17.2 percentage points, however, would be considered very sharp during the period from 2011-12 to 2023-24, with the poverty figure in the base year being 21.5 per cent.

In the past, the poverty debate in India had revolved around the release of the HCES reports roughly every five years. These surveys had a reasonably uniform data collection methodology from the 1970s to the mid-1990s.

There was a general acceptance of the concept of a poverty line corresponding to a minimum calorie intake norm following the initial work done by Vinayak Mahadev Dandekar and Nilkanth Rath in the 1960s. Subsequently, the then Planning Commission adopted the methodology with some modifications for the official poverty estimates.

However, the widening mismatch between the household consumption expenditure in the National Sample Survey (NSS) and that in the national accounts statistics forced a review of the survey methodology, specifically the reference period used for recording the expenditure. This and the subsequent attempts to review the methodology of defining the poverty line through the recommendations of the Suresh Tendulkar and C Rangarajan committees somewhat unsettled the entire debate. This has made the recent poverty debates a complex exercise of juggling data and methodology, leading to contradictory conclusions.

The latest release of the fact sheet from the 2023-24 survey, its use to derive fresh estimates of poverty has opened a new scene in the poverty debate.

Poverty line