Poverty Drops To 5 Percent In India: Niti Aayog CEO (image-X/NITI Aayog)
The latest consumer expenditure survey conducted by the National Sample Survey Office (NSSO) suggests a decline in poverty levels in India. According to B. V. R. Subrahmanyam, the CEO of NITI Aayog, the survey indicates that poverty has reduced to five percent, reflecting a trend of prosperity across both rural and urban areas.
Released by the Ministry of Statistics and Programme Implementation, the survey highlights a substantial increase in per capita monthly household expenditure, which more than doubled in 2022-23 compared to 2011-12.
Subrahmanyam stated that the survey categorised individuals into 20 different segments. Notably, the data displayed an average per capita monthly expenditure of Rs 3,773 in rural areas in 2022-23 from Rs 1,430 in 2011-12 and Rs 6,459 in urban areas from Rs 2,630 during the same period. The expenditure of the 0-5 percent class, standing at Rs 1,373 in rural areas and Rs 2,001 in urban areas, indicates a consistent pattern of poverty concentration in this demographic.
Moreover, in rural areas, the share of food expenditure has declined to 46.4 percent in 2022-23 from 53 percent in 2011-12. This indicates the diversification of spending habits towards non-food items including electronics, beverages, processed food, medical care and transportation. Likewise, urban centers witnesses a trend with food expenditure dropping to 39.2 percent in 2022-23 from 43 percent in 2011-12.
The survey underscores a significant increase in consumption levels, indicating progress in both rural and urban sectors. Subrahmanyam pointed out that the consumption growth rate in rural areas exceeded that of urban areas, leading to a reduction in disparities between the two. Notably, the gap between rural and urban consumption, which was at its peak in 2004-05, has considerably narrowed.
Furthermore, the survey highlights the decline in cereal and food consumption across both rural and urban areas. Attributed to increased prosperity and higher disposable incomes, the decline signifies a shift towards a more diversified consumption pattern, including higher spending on processed foods, fruits, vegetables, and dairy products. The NITI Aayog CEO added that the recasting of consumer price index could lead to a reassessment of inflation levels, impacting the Reserve Bank of India”s (RBI) monetary policy decisions.
Subrahmanyam also hinted at potential implications on inflation and GDP, suggesting that the NSSO survey findings could change the consumer price index to better reflect current consumption patterns.
The data also challenges previous poverty estimates proposed by a panel led by ex-RBI governor C Rangarajan in 2014. According to the panel, poverty line was estimated as monthly per capita expenditure of Rs 1,407 in urban areas and Rs 972 in rural regions. However, the latest data indicates that poverty rates in India have significantly decreased, with consumption expenditure among the bottom 5-10% of the population reflecting levels consistent with low single digits.
