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LATEST NEWS UPDATES | The bottom line

The bottom line

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published Published on Aug 3, 2012   modified Modified on Aug 3, 2012
-The Indian Express

New NSS data affirms that GDP growth remains the best way to tackle poverty

Amid the pervasive economic gloom, provisional data from the 68th round of the National Sample Survey Office’s just-concluded household consumer expenditure survey offers a sliver of good news. According to it, average inflation-adjusted expenditure for July 2011-June 2012 rose by about 4.5 per cent in two years, with the poorest 10 per cent of the population in urban areas registering an almost 17 per cent increase in expenditure. The bottom decile in rural areas didn’t show as fast an increase in monthly per capita expenditure, but still grew. Rural household consumption grew at a faster rate than urban consumption when compared to the 66th round. This indicates that the purchasing power of Indian households has increased due to higher incomes.

Given the absence of an official survey to measure income, the NSS’s consumption-based data is a critical input for government bodies, including the Planning Commission, for designing policy. Together with the results of the 2011 household census, published in March this year, the NSS data provides evidence that growth in recent years has translated into better living standards for even the most vulnerable sections. The household census recorded visible progress in the quality of houses and access to drinking water for rural households. Every other rural household can now access banking services, as opposed to one in three in the 2001 census; almost half of rural households now also own mobile phones and one in three owns a TV, an improvement over less than one in five 10 years ago. Comparable data released in June for SCs/STs also suggested a tangible improvement.

The NSS data, then, indicates a dramatic lowering of poverty levels. The implications are clear: a focus on growth pays. The two years’ result is critical as 2009-2010 was a drought year, so income growth in the previous round of NSS data was muted. Incorporating data till 2011-12 has shown that income growth for the lowest decile has gathered pace. Government needs to read the data carefully, and draw the right lessons, for its remaining term.

The Indian Express, 3 August, 2012, http://www.indianexpress.com/news/the-bottom-line/983124/


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