Gauging inflation, poverty and GDP growth

financialexpress.com:

By R Gopalan and MC Singhi,

The ministry of statistics and programme implementation, after a gap of 11 years, released a fact sheet on per capita expenditure for 2022-23. A detailed report on private consumption expenditure is awaited, yet the fact sheet itself has generated many observations. Four issues are significant here, and we briefly indicate our observations on them.

Between 2011-12 and 2022-23, the overall increase in per capita consumption expenditure has been 9.45% for rural and 8.61% for urban areas. While growth in per capita expenditure is nearly uniform across the decile classes of population, at the lower levels there is a relatively faster increase. Consumption of the bottom 10% of the population has increased by 9.8% and 10.4% in rural and urban areas respectively compared to a growth of 8.7% and 7.3% for the top 10% of the population. Notwithstanding the moderate increase in consumption expenditure at the bottom level, we do not see much improvement in access to consumption at this level. Based on the debt and assets survey, it is observed that more than half of the household assets are still concentrated in the top 10% of the population. Though this inequality has moderated slightly, it remains much above the inequality in consumption. The assets held by the bottom 40% of the population is just 6% in rural and 3.3% in urban areas. The new surveys indicate persistent inequality in consumption and access to assets.

Post-1973, poverty estimates in India are made with reference to a basket of goods. The task force in 1979 and expert groups afterwards, including the one under C Rangarajan in 2014, have continued estimating poverty solely with reference to the distribution size of private consumption