The Household Consumption Expenditure Survey (HCES) 2022-23 fact sheet released by the National Sample Survey Office (NSSO) has spurred discussions on poverty and inequality trends in India. Researchers have estimated poverty ratios based on the fact sheet data, acknowledging that these estimates may not be as precise as unit-level data. However, they argue that the poverty numbers from the fact sheet are likely to be reasonably accurate. The analysis suggests a significant decline in poverty ratios since 2011-12. The estimated poverty ratio based on the Rangarajan Committee’s poverty lines decreased from 29.5% in 2011-12 to 10% in 2022-23, representing an annual decline of 1.77%. Similarly, the poverty ratio based on the Tendulkar Committee’s poverty lines fell from 21.9% in 2011-12 to 3% in 2022-23, indicating an annual decline of 1.72%. These declines suggest a substantial reduction in poverty over the past decade. The HCES 2022-23 data also provides insights into inequality trends. Estimates from Subramanian indicate a decline in the Gini coefficient for both rural and urban areas between 2011-12 and 2022-23. The Gini coefficient for rural areas reduced from 0.278 to 0.269, while for urban areas, it decreased from 0.358 to 0.318. This suggests a reduction in inequality, particularly in urban areas. The NSSO’s varying reference periods for data collection, such as the uniform reference period (URP), mixed reference period (MRP), and modified mixed reference period (MMRP), introduce challenges in comparing estimates across different years. While the MMRP estimates may be closer to the true value, they are not strictly comparable to estimates from earlier years that used different reference periods. For instance, the Tendulkar Committee estimated poverty ratios on the basis of MRP for 1993-94 and 2004-05, while the Planning Commission used the same methodology and MRP to estimate poverty ratios for 2009-10 and 2011-12. The estimates on poverty for 2022-23 (based on MMRP) are, therefore, not directly comparable with those of earlier years. However, the Rangarajan Committee used MMRP for estimating poverty ratios for 2009-10 and 2011-12, making these estimates comparable with those of 2022-23. The 2002-23 data also included methodological changes such as coverage of more items and multiple visits, which may provide better estimates but also raise the issue of comparability. Researchers have also raised concerns regarding measurement issues related to poverty lines. They argue that the calorie norm-based poverty line used by the Lakdawala Committee, which was adopted and converted to MRP-consumption by the Tendulkar Committee, may not be appropriate in the current context. The Rangarajan Committee attempted to address this by defining a new consumption basket that includes essential non-food item groups and a residual set of behaviorally determined non-food expenditure. The poverty line is based on private consumption expenditure, and researchers emphasize the need to consider public expenditure for a more comprehensive understanding of well-being. The HCES 2022-23 attempted to impute values for some items of public expenditure, but researchers suggest that more needs to be done to capture these values adequately. They highlight that public expenditure on subsidized and free items given to households is substantial and should be better reflected in the estimates. Overall, the HCES 2022-23 data provides valuable insights into poverty and inequality trends in India. The decline in poverty ratios and inequality, particularly in urban areas, are encouraging signs. However, the issue of comparability due to varying reference periods and methodological changes requires careful consideration. Researchers also raise valid concerns regarding measurement issues related to poverty lines, emphasizing the need for ongoing discussions and improvements to ensure accurate and meaningful interpretations of the data.
Analysis of the Fact Sheet of HCES 2022-23: Understanding Poverty and Inequality Trends
