Opinion Interim Budget 2024: Are the poor, women, youth and farmers, highlighted by the FM in her speech, really doing well?

The running theme in her speech was that these four segments are not just doing well, but their progress has been noticeably better than in the pre-2014 era. This is an empirical question and should be easy to settle if we have comparable data.

Which we don’t. Take the poor. A pre-and post- 2014 comparison is like comparing apples to oranges. Prior to 2014, the National Sample Survey Organisation (NSSO) would conduct quinquennial national consumption expenditure surveys that could identify the proportion of people below the threshold defined by the national official poverty line, which was based on consumption expenditure. This is the poverty Head Count Ratio (HCR). These surveys could also calculate HCR based on internationally comparable poverty lines — one dollar a day, for example.

The earlier poverty line isn’t sacrosanct. The academic and policy space has witnessed a vibrant “Great Indian Poverty Debate” about where the poverty line should be, whether it should be focused on food consumption or include other items. However, there is overwhelming consensus that the post-1991 reform period witnessed an impressive decline in poverty incidence (from 37.2 per cent in 2004 to 21.9 per cent in 2011 using the national poverty line) along with high growth rates.

Has the decline in poverty been faster in the last nine years compared to the previous two decades? How did poverty incidence change during the devastation wreaked by the Covid-19 pandemic? Here we are stumped because both the last national census and the consumption expenditure survey are roughly 13 years old, and hence outdated.

The FM claimed that 25-crore people have come out of poverty since 2014. This is based on the multidimensional poverty index (MPI) released by the Niti Aayog. This is calculated using 12 indicators — nutrition, child and adolescent mortality, antenatal care, years of schooling, school attendance, cooking fuel, sanitation, drinking water, electricity, housing, assets and bank account — that have been grouped under three dimensions namely, health, education and standard of living. The MPI estimates are not comparable to the earlier HCR numbers.

It is hard to determine the HCR using this index but there is some extrapolation that shows a “steep decline” in HCR from an alleged 29 per cent in 2013-14 to 11.28 per cent in 2022-23. The pre-2014 back-projected HCR is significantly higher than what the NSS survey revealed back then.

The FM claimed that “the average real income of the people has increased by 50 per cent”. Given that there is no data on individual household incomes, this is probably based on per capita GDP. In addition to the issue of the comparability of GDP estimates, there is the very real question of how the distribution of income has shifted.

How has inequality changed before and after 2014? A given average income can be associated with different income distributions. There has been ample discussion about increased inequality and the shape of the post-Covid economic recovery. Is the recovery of the GDP being driven by the top 10 per cent of Indians? Is this a K-shaped income growth which means that the divergence between the top and bottom is increasing?

The FM’s mention of women was in the context of massive enrollment in self-help groups and the remarkable work done by ASHA workers. Both phenomena are indeed admirable. Can we be hopeful that ASHA and anganwadi workers, India’s formidable frontline health and care workers, will be remunerated through full-time salary and benefits that are routine for government workers?

We could forget about statistical quibbles and accept that India is doing phenomenally well since 2014 on all fronts. In which case, why a long wait for Viksit India@2047? What are the challenges that will take a quarter-century to overcome? Could it be that half of the country’s population (women) are massively underrepresented in decision-making in both public and private spheres and significantly out of paid work? Or that the working-age population is increasing faster than opportunities for productive employment, leading to a jobs’ crisis and youth unemployment? Are agricultural incomes not growing? Or that (lack of) inclusive growth is a real concern? Will inequality pose a constraint to future growth? Are early childhood health indicators, which affect several adult-life indicators, not improving as fast as needed? We can only speculate.

The writer is head and professor, Department of Economics, Ashoka University. Views are personal