Data suppression is the new dimension

INDIA'S POVERTY

Udayan Hazarika

(The writer can be reached at udayanhazarika@hotmail.com)

Poverty in India is a chronic problem. Our economy has a never-ending affair with this problem. Numbers of strategic measures have been adopted to keep the problem under control but it gets slipped out at the slightest instant. It is now our tested experience that the problem requires constant vigil – a slight inattention could lead to a drastic slide from the stable status. This is what is happening for the last several years. The available statistics suggest that between 2011-12 and 2021, there has been a steady rise in poverty among the masses. Lot many reasons could be cited for this gradual rise - starting with the imposition of demonetization in the year 2016 – which is one of the most unplanned economic policies that the Government had adopted – now taken as a monumental blunder of the government. The stated objective of this whimsical event was to unearth the black money which rather resulted in the creation of millions of unemployed pushing them to poverty. This is one of the basic reasons, why the government had forcefully stopped the publication of the data pertaining Consumption Expenditure Survey (CES) of 2017-18. However, the leaked data of this sample survey has been in circulation at various levels already. Withdrawal of money from circulation for an indefinite period was a big blow to the economy's unorganized sector. The small farms run on patty cash and that too when made cash in hand unusable they fail to remain in the business. Any new policy introduced in the economy, when fails, affects the unorganized sector most before it being transmitted to other sectors. The demonetization had affected the core factor i.e. the shortage of funds resulting in great hardship to the small economic units and also MSMEs. A prolonged period of waiting for normalization forced many of these units to close down or temporarily suspend their operations or production, leading to the retrenchment of wage labourers engaged in the units. Patty businessmen could not sustain such hardship for long and they attempt to shift their livelihood. It was a time when the economy was in almost a suspended state.

Thereafter, there was the sudden introduction of the GST which led to a drastic fall in tax collection. Most of the SMEs that runs with meagre working capital such as Rs 5 – 10 lakhs have been brought under this scheme putting them into a complex situation. Many had wind up their business for not being able to meet the standards set by the GST Rules. Many kept running from pillar to posts for getting their farms registered. The initial years were haphazard and nobody knew what to do. The State Government had hastily introduced the Act without going into the details of the provisions. This is another factor that led to the closure of business of many production and supply units for not being able to fulfil the conditions thereby discharging thousands of wage earners from their units. This added to the jobless millions of the country.

It was under the above backdrop that the Consumption Expenditure Survey 2017-18 was conducted and therefore it is only to be expected that the findings of the survey would inevitably reflect the prevailing situations of rising poverty, falling employment and drastically cut consumption expenditure - both private and public. Unable to face the picture that the CES 2017-18 has in store for the Government, losing no time, Government announced its decision not to publish the data relating to consumer expenditure survey 2017-18 under the pretext of data quality, also announced about holding the next survey in 2020-21 and 2021-22. This, however, did not happen for the year 2020-21 due to the impact of the pandemic and the year 2021-22 is also slipping away gradually without having anything done for conducting the survey. It is necessary to note that the country is running out of data about the magnitude of poverty and its various aspects since last 2011-12. The government is also formulating all public policies without having any current data on poverty. Even the first goal of sustainable development which is freedom from hunger is under implementation in the country based on data available with the reference to the year 2011-12.

The CES 2004-2005 estimated the total poverty in India as 37.2 per cent with a corresponding estimated number of poor people at 407.2 million. The data reveals a big divide between rural and urban poverty with rural poverty at 41.8 Per cent while urban poverty at 25.7 per cent. The corresponding number of poor people was estimated at 325.8 million and 81.4 million respectively. There has been good progress in the eradication of poverty in the next 7 years when the CES 2011-12 estimation found total poverty at 21.9 per cent with a corresponding population of poor people at 269.8 million. This happens to be the last government estimation of poverty available in circulation. Thereafter, a Planning Commission Note prepared in 2013 mentioned inflation-adjusted State-wise poverty line for both rural and urban areas. The Planning Commission estimation is based on the methodology adopted by Tendulkar Committee on poverty in 2009.

As per a private calculation based on periodic labour force survey (PLFS) data, published by MOSPI, between 2011-12 and 2019-20, the magnitude of poverty has risen to 25.9 per cent in 2019 from 21.9 per cent of 2011-12 with an increase in poor people from 216.7 million to 270 million (The Hindu 4th August 21). A similar, calculation has also been arrived at by other such institutions. The CMIE has estimated that there was a net loss of 7 million jobs between February 2020 and February 2021 which resulted in an average of 12 per cent loss of household income during that period. The loss is extreme towards the poor people when taken separately. The CMIE concludes their study by saying that "our estimates show that 218 million additional people (168 million in rural and 50 million in urban areas) would have been pushed into poverty at 12 per cent contraction in their monthly per capita consumption in the year 2020-21". The CMIE further stated in its report (June 21) that there was a loss of 22.3 million jobs during April – June 21 of which daily wage earners were the worst hit.

The above analysis gives an idea about the shape of the problem. The future of the economy is not too bright as we are to go ahead hand in hand with this problem. Non-availability of the data is the basic problem which the Government must quickly settle. Till the next survey is conducted, the data available with the NSO from the CES 2017-18 should be allowed conditional circulation. This will at least minimise the problem.