Household Consumption Expenditure Survey (HCES) for 2022-23

The latest survey of household consumption expenditure, released by the statistics office, reveals promising trends in India’s poverty landscape.

According to the Niti Aayog CEO, rural consumption has remained robust, narrowing the gap with urban areas.
The urban-rural consumption divide has decreased to 71% in 2022-23, indicating a decline in inequality, despite rural households’ food spending dropping below 50% of their total expenditure.
As a result, the poverty level in the country could be as low as 5% or even less.
The NITI Aayog Task force in India estimates poverty using data from the National Sample Survey Office.

Robust Rural Consumption: The survey data shows a significant improvement in rural consumption, reducing poverty levels by bridging the gap between urban and rural areas.
Vanishing Rural Deprivation: The data indicates that rural deprivation has nearly disappeared, indicating improved living conditions and economic well-being among more people in rural India.
Implications for RBI: The RBI’s interest rate decisions may be influenced by the decrease in food and cereals’ share in the retail inflation index, as rural consumption strengthens.
Data Clarity: The survey provides clarity about the state of the rural economy, dispelling doubts and offering a more accurate picture of poverty levels.

Poverty is a state where individuals or groups lack resources for basic needs like food, shelter, clothing, healthcare, education, clean water, sanitation, and electricity.

The poverty line is the minimum income required to purchase a basket of goods and services that meet basic human needs.
The poverty line estimation in India is based on consumption expenditure, not income levels, due to challenges in assessing rural and informal economy incomes.
The Poverty Line Basket (PLB) is a comprehensive collection of goods and services that are essential for meeting basic human needs.

India still has over 230 million people in poverty, with 18.7% under vulnerability.
Despite being among 25 countries that halved their global MPI values within 15 years, India’s poverty incidence has declined significantly, from 55.1% in 2005/2006 to 16.4% in 2019/2021.
The number of people experiencing multidimensional poverty has also decreased.

Poverty often results in a lack of access to essential resources like food, water, shelter, and healthcare.
Poverty leads to poor health outcomes, such as malnutrition, increased disease rates, and limited access to medical care.
Poverty often leads to inadequate educational outcomes, as individuals from low-income households lack access to quality education and training.
Poverty often leads to limited job opportunities, as individuals from low-income households often face discrimination and limited access to employment opportunities.
Poverty often leads to housing insecurity, with many struggling to afford adequate housing and facing discrimination and stigma from low-income households.

Dadabhai Naoroji, in his pre-independent era work “Poverty and the Un-British Rule in India,” was among the first to estimate the link between British rule and Indian poverty.
The Alagh Committee(1979) : developed a poverty line for rural and urban areas based on nutritional requirements.
DT Lakdawala (1993) proposed calculating consumption expenditure based on calorie consumption and developing state-specific poverty lines based on nutritional requirements for rural and urban areas.
Tendulkar Committee (2009): The Tendulkar Committee suggested converting monthly household consumption into consumption expenditure per person per day, adjusting the national poverty line for 2011-12 to Rs. 816 per capita per month for rural and Rs. 1,000 per capita per month for urban areas.
Socio-Economic Caste Survey (SECC), 2011: It is also known as Dr. N. C. Saxena’s committee proposed a new methodology for identifying below poverty line households, using SECC data for social welfare program implementation.
Rangarajan Committee (2014): The report recommends dividing consumption into rural and urban areas, focusing on food and non-food items, and setting a poverty line of Rs. 972 in rural areas.