Growing divergence between consumption expenditure estimates from NSO surveys and GDP data is too big to be pushed under the carpet
Recently, we had expressed concerns that with the GDP growth rate falling in the post 2011-12 period, the decline in the poverty ratio would be slow. During 2011-12 to 2018-19, both GDP and agriculture growth were lower than in the earlier period. The terms of trade were not in favour of agriculture and rural wage growth has declined. The economy has grown by 5 per cent and 4.5 per cent in the first and second quarters of FY20 respectively, and growth is expected to be around 5 per cent for this fiscal year. Thus, we have reasons to believe that the rate of decline in the poverty ratio will be low.
The leaked NSS consumer expenditure data for the year 2017-18, however, shows that the real monthly per capita expenditure (MPCE) has actually fallen between 2011-12 and 2017-18. It shows that real MPCE declined from Rs 1,501 in 2011-12 to Rs 1,446 in 2017-18 — a fall of 3.7 per cent at the all-India level. In rural India, it declined by 8.8 per cent, while in urban India it increased by 2 per cent over the same period.
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