Kurukshetra IAS Academy Blogs

1. Poverty levels below 5%, claims chief of Centre’s think tank

NITI Aayog CEO extrapolates Household Consumption Expenditure Survey findings to argue that growth is broad-based, while urban-rural inequality is shrinking; says destitution almost extinct; suggests lower weightage for food in CPI

Less than 5% of Indians are now expected to be below the poverty line, and extreme destitution has almost gone away, a top government official asserted on Sunday, citing the findings of the Household Consumption Expenditure Survey (HCES) for 2022-23. Retail inflation has also likely been overstated in recent years, he added.

Dismissing the narrative that rural economy is weak and India’s growth story is “restricted to a few people”, B.V.R. Subrahmanyam, chief executive officer of the Centre’s think tank NITI Aayog, averred that growth is “broad-based” with rural Indians’ incomes and spends rising faster than their urban peers. The urban-rural consumption divide has narrowed to 71% in 2022-23 from a peak of 91% in 2004-05, so inequality is declining, the official said, even as rural households’ spending on food has dropped below 50% of total expenditure for the first time.

Food spending changes

Lower spends on pulses and cereals — which dropped below 5% of per capita consumer expenditure as per the latest survey — and higher expenditures on conveyances, consumer durables, and consumer services indicate that people are earning more and need to spend a lesser share of their income on food, Mr. Subrahmanyam argued.

“It’s not that consumption levels of food are going down in absolute terms, but the relative spending on food is declining while consumption of products like TVs, fridges, mobile phones and cars have increased. This not only means there is a change in incomes for the better, but also a change in lifestyles,” he said. “Within food, we see the consumption of beverages, processed food, milk, and fruits is going up, an indication of more diverse and balanced food consumption,” he added.

Mr. Subrahmanyam noted that this was the first official data since 2011-12 and was much-awaited as there were inconsistencies in the 2017-18 Survey data, which was “just preceded by demonetisation”.

Citing the Monthly Per Capita Expenditure (MPCE) averages across fractile classes in 2022-23, Mr. Subrahmanyam noted that ₹1,373 was the average consumption level for the bottom 5% of rural households, while it was ₹1,782 for the next 5% of households.

“Poverty lines and estimates are derived from this. We have had four, five different informal estimates for poverty in the absence of the 2017-18 Survey findings. If we go by ₹32 a day, which was the last accepted poverty line as of 2011-12, and factor in inflation trends since then to double that level to about ₹60 a day, then you will see that poverty is less than 10%, as ₹1,782 is the average spending by those in the bottom 5% to 10% fractile class in rural India,” he said. “I am convinced poverty in India is certainly in the low single digits, and below 5% is what this data shows, if you add the imputed value of food transfers and subsidies received by households,” Mr. Subrahmanyam underlined.

Moreover, benefits like healthcare under the Ayushman Bharat scheme, and free education have not been factored into the consumption expenditure survey. “In a way, destitution and deprivation have almost gone,” he said. As per the NITI Aayog’s multi-dimensional poverty index, 11% of the population was below poverty line last year. “The big picture is, there is a sharp rise in urban and rural consumption by over 2.5 times from 2011-12 levels in current prices, and the big story is that India’s growth is not restricted to a few, but is very broad-based,” Mr. Subrahmanyam said.

2. When SC upheld central role of ‘little man’ in participatory democracy

The Supreme Court, in back-to-back decisions in the electoral bonds and Chandigarh mayoral polls cases, has upheld the cause of “purity of elections” and the central role of the “little man” in participatory democracy.

A Constitution Bench headed by Chief Justice of India D.Y. Chandrachud held that political funding through electoral bonds tilts the playing field insurmountably in favour of deep-pocketed corporations over the “student or teacher or artist or the office goer” who make small contributions to support a party, which may not necessarily be in power.

“Lobbying and capture give undue importance to big donors and certain interest groups, at the expense of the ordinary citizen, violating the right of equal participation of each citizen in the polity,” the Chief Justice observed.

The court said electoral bonds work to strengthen the deep nexus between money and politics in India. The scheme allowed a rich donor to not only influence electoral outcomes but also government policy as part of a quid pro quo arrangement between the contributor and the political party.

The court held that the right to information of a voter about political fundings was superior to the right to privacy of political affiliations in some cases.

“Right to privacy of political affiliations does not extend to contributions which may be made to influence policies. It only extends to contributions made as a genuine form of political support that the disclosure of such information would indicate their political affiliation and curb various forms of political expression and association,” the Constitution Bench distinguished.

Free, fair polls

In the Chandigarh mayoral polls, a three-judge Bench also headed by the Chief Justice held that free and fair elections were a part of the basic structure of the Constitution.

The court said the process of citizens electing councillors, who in turn, elect the Mayor, serves as a channel for ordinary citizens to ventilate their grievances through their representatives — both directly and indirectly elected.

“Ensuring a free and fair electoral process throughout the electoral process is imperative to maintain the legitimacy of and trust in representative democracy,” the apex court underscored.

The court initiated criminal proceedings against the Returning Officer of mayoral polls for tampering with the ballots and declared the Aam Aadmi Party candidate as the new Mayor. The apex court quoted Justice V.R. Krishna Iyer’s words in Mohinder Singh Gill v. Chief Election Commissioner that the “little, large Indian shall not be hijacked from the course of free and fair elections by mob muscle or subtle perversion”.

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