The leaked NSSO report on consumption expenditure reveals the state of India’s rural economy
The National Sample Survey Office (NSSO) is again in the news, and not for the best of reasons.
A business daily recently did an expose about the NSSO’s periodic survey of consumption expenditure. This survey, though approved, was not released by the government.
Instead, it was scrapped for various reasons. This is the latest in the recent trend of NSSO surveys being regularly discarded by the government. Following the expose, more reports appeared in the media about consumption expenditure, than the NSSO has ever done officially.
But the survey on consumption expenditure is a critical one. Expenditure on consumption is accepted as a proxy for measuring income.
On the other hand, income level is used to measure poverty in the country. Overall, this survey would have indicated the general economic well-being at household level.
This report would have indicated how the ‘fastest’ economic growth rate had trickled down to an average Indian household. Going by the leaked report in the business daily, that is certainly not the case.
The economy might have grown but there was no proportionate increase in household expenditure on consumption. More worryingly, Indians — particularly in rural areas — are spending less and less on food.
The leaked survey report shows that consumption expenditure in India has declined between 2011-12 and 2017-18. Overall, India’s consumption spending has declined by four per cent in this period.
In rural areas, the dip in consumption expenditure is sharper at 10 per cent per annum. It is around two per cent in urban areas.
Is this something new for rural India? In fact, not. Since 1972-73, going by various NSSO surveys, in rural households, the monthly per capita consumption expenditure on food has been declining.
It has declined from 72.83 per cent (as percentage of total expenditure) in 1972-73 to 52.76 per cent in 2011-12. The expenditure on non-food items has increased during this period from 27.15 per cent to 47.24 per cent.
There is another curious aspect to this expenditure data. In this period, overall consumption expenditure at the household level has gone up. The new NSSO report has just re-emphasised this trend. But why is it so?
According to a new book Poverty, Chronic Poverty and Poverty Dynamics that deals with many aspects of poverty in India, the poorest people are consuming lesser amount of cereal, which is the cheapest form of food.
“As India moved to greater prosperity in the last twenty years, the cereal consumption of the rural rich went down, but there was no increase for the poor. At any given point of time, the cereal intake of the bottom 10 per cent in rural India continues to be about 15–40 per cent less than the cereal intake of the top deciles of the population, despite better access of the latter group to fruits, vegetables and meat products,” it says.
Poor or rural households, in general, are actually not prioritising food within their expenditure basket. And it is a sign of deep distress, particularly among the poor population.
For example, households earlier didn’t have to spend much on education, energy, transport and lighting. Similarly, the crop loss due to irregular weather conditions was also less, thus not denting the earning level.
Various NSSO surveys have established an increase in all these expenditure items. Now, with all these new expenditures to be made, households might be forced to spend less on food items.
For those in the ‘Poor’ category or just above the poverty line, this means a survival crisis as they cannot spend everything on food, even from the subsidised public distribution system.
The new NSSO survey has made this situation of distress public. And it is better to accept than to ignore it for political reasons. Ultimately, the same households vote for a government.
This will be published in Down To Earth's print edition dated 1-15 December, 2019
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