P Chidambaram writes: There are no poor in India

The CEO made this astonishing claim based on the results of the Household Consumption Expenditure Survey (HCES) published by the National Sample Survey Office

Now, its CEO has announced his discovery that the poor in India are no more than 5 per cent of the population. (Representational Image)

Written by: P Chidambaram

5 min readMar 4, 2024 08:10 AM IST First published on: Mar 3, 2024 at 07:45 AM IST

Don’t be surprised if you wake up one morning and read the screaming headline in the newspapers “No more poor: India abolishes poverty”. That is what the NITI Aayog wants you to believe. A venerable institution like the Planning Commission has been reduced to an ingratiating spokesperson of the government. First, it announced that its estimate of the proportion of people who are multi-dimensionally poor was 11.28 per cent. Now, its CEO has announced his discovery that the poor in India are no more than 5 per cent of the population.

The CEO made this astonishing claim based on the results of the Household Consumption Expenditure Survey (HCES) published by the National Sample Survey Office. The HCES did throw up some pleasant surprises but it certainly did not lead to the conclusion that the proportion of the poor in India amounted to no more than 5 per cent.
Reading Data

HCES was conducted between August 2022 and July 2023. It collected information from 8,723 villages and 6,115 urban blocks covering 2,61,745 households (60 per cent in rural areas and 40 per cent in urban areas). We shall assume that the sample was sufficiently representative and the methodology was statistically sound. The aim was to calculate the Monthly Per Capita Expenditure (MPCE) in current/nominal prices. On average, a person’s monthly expenditure was:

	Rural India	Urban India
Top 5 per cent	10,501	20, 824
Average (mean)	3,773	6,459
Bottom 5 per cent	1,373	2,001
Median	3,094	4,693

Median expenditure means that the per capita expenditure of 50 per cent of the total population was no more than Rs 3,094 (rural) and Rs 4,963 (urban). Take the bottom 50 per cent. Go down fractile by fractile. Statement 4 of the Report gives the numbers:

	Rural India	Urban India
0 – 5 per cent	1,373	2,001
5-10 per cent	1,782	2,607
10-20 per cent	2,112	3,157

Let’s stop at the bottom 20 per cent. Does the NITI Aayog seriously argue that any person whose monthly spend (on food and non-food) is about Rs 2,112 or Rs 70 a day in rural areas is not poor? Or any person whose monthly spend is Rs 3,157 or Rs 100 a day in urban areas is not poor? I suggest that the government give the NITI Aayog officials Rs 2,100 each and ask him/her to go and live in a rural area for a month and report on how ‘rich’ his/her life was.

Observed Realities

HCES revealed that the share of food in consumption had reduced to 46 per cent in rural areas and 39 per cent in urban areas. That is probably true because of rising income/expenditure and the value of food consumption remaining the same or rising at a slower rate. Other data confirmed long-observed realities. Scheduled castes and Scheduled tribes are the poorest social groups. They are below the average. OBC are near the average. It is the ‘others’ who are above the average.

State-wise data also confirm the observed realities. The poorest citizens are those who live in Chhattisgarh, Jharkhand, Odisha, Madhya Pradesh, Uttar Pradesh, West Bengal and Meghalaya — their MPCE is below the all-India average MPCE for rural areas. There is only a little difference in the names of states if we consider the all-India average MPCE for urban areas. These states were ruled for long years by the BJP and other non-Congress parties. Surprisingly, demolishing the hype, Gujarat, ruled by the BJP since 1995, hugs the all-India average MPCE in rural areas (Rs 3,798 vs Rs 3,773) as well as in urban areas (Rs 6,621 vs Rs 6,459).

Blind to the Poor

What riles me is the claim that the poor in India are no more than 5 per cent of the population. The implication is that the poor are a vanishing tribe and let’s turn our attention and resources to the middle class and the rich. If the claim is true —
Why does the government distribute 5 kg of free grain per person per month to 80 crore people? After all, cereal and substitutes account for only 4.91 per cent (rural) and 3.64 per cent (urban) of the total MPCE.

If the poor are no more than 5 per cent, why did the the National Family Health Survey-5 record the following alarming facts:

Children age 6-59 months Percent
who are anaemic 67.1
All women age 15-49 years
who are anaemic 57.0
Children under 5 years
who are stunted 35.5
Children under 5 years
who are wasted 19.5

Has the NITI Aayog closed its eyes to the children who beg on the streets of Delhi? Does it not know that there are hundreds of thousands of people who are homeless and sleep on pavements or under bridges?

Why are there 15.4 crore active registered workers under MGNREGS? Why do Ujjwala beneficiaries, on average, buy only 3.7 cylinders in a year?

If the NITI Aayog wants to serve the rich, let it do so, but let it not mock the poor. The government may not succeed in eliminating poverty, but it is trying hard to banish the poor from its sight.