Indian Economy: Betwixt Questions And Half Answers

IT is that time of the year when public attention coalesces around the economy—and the second quarter GDP growth of 5.4 percent has catalysed angst among the public. The issue merits attention and urgency. The winter session of parliament would have been an appropriate forum for a discussion.

- SHANKKAR AIYAR

That was not to be 5.4 percent has catalysed angst among the public. The issue merits attention and urgency. The winter session of parliament would have been an appropriate forum for a discussion. That was not to be.

So how is India doing? It is often said that the question informs what the answers may not. India's reality is wedged between questions asked by members in parliament and the answers provided by the government.

First, the good news presented by the statistics ministry. The Household Consumption Expenditure Survey of 2023-24 reveals that the rural Indian's average monthly per capita expenditure (MPCE) is at ₹4,122 and for the urban Indian is ₹6,996—up from ₹1,430 and ₹2,630 in 2011-12. On cue, Prime Minister Narendra Modi, alluding to welfare schemes, observed at the Grameen Mahotsav that the purchasing power of the people in villages has increased almost three times.

The survey has produced a new view on the level of poverty. A recent SBI study also stated, "At an aggregate level, we believe poverty rates in India could now be in the range of 4-4.5 percent."

Without traversing the torturous terrain of statistics, the question that begs to be asked is if the poverty level is sub-5 percent, why are 81.3 crore people being provided free rations under the PMGKAY. Be that as it may, the MPCE data is at variance with perceptions of negative real rural wages and weak demand at the frontiers of consumption.