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LATEST NEWS UPDATES | Limits of handout politics -Rama Bijapurkar and Rajesh Shukla

Limits of handout politics -Rama Bijapurkar and Rajesh Shukla

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published Published on Apr 1, 2019   modified Modified on Apr 1, 2019
-The Indian Express

Congress may be talking to economists and experts. But is it listening to the voter?

Congress president Rahul Gandhi’s plan for a “surgical strike on poverty” is built around some key numbers: Rs 12,000, the target minimum monthly income for a household; 5 crore households (amounting to 20 per cent of all Indian households); Rs 6,000, their average monthly earning; and therefore, Rs 6,000, the monthly amount required to be transferred to each. Since his political and financial calculations hinge around these numbers, a fact check is useful, more so because neither he nor the eminent people he consulted have told us where these numbers came from.

Official government surveys measure household expenditure, not income. Hardly any robust household income study exists in India, because adopting and administering rigorous internationally prescribed measurement methodology and designing samples that effectively capture the complexity of India is tough and hellishly expensive. We know this from our own experience of doing such studies, the most recent of which was in 2016 (www.ice360.in). It gave us India’s household income distribution (share of income “owned” by every 10 per cent slab of households from the richest to the poorest). Not much has happened to disrupt income distributions since then. So we were able to estimate today’s income of Indian households by applying our survey income distribution to India’s total household disposable income for 2018-19, a number put out by the government.

Based on our data, the good news for the Congress is Indian households are not as poor as they assume them to be. Only the poorest 10 per cent of Indian households, and not the poorest 20 per cent, earn less than Rs 12,000 per month. Their average income is Rs 9,500, not Rs 6,500 as assumed. The next richest 10 per cent earn about Rs 15,700 a month. Given decreasing family sizes, there are 30 million households in each slab, not 28 million.

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The Indian Express, 1 April, 2019, https://indianexpress.com/article/opinion/columns/rahul-gandhi-minimum-income-scheme-lok-sabha-elections-poverty-5651767/


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