Measuring poverty shouldn't be about calories. India needs a thali index

Indian Express

15 hours ago

The publication of the survey of household consumption expenditure for 2023-24 by the National Statistics Office in January 2025 has been followed by a flurry of estimates of poverty in India. Of these, two have received the most attention. The first off the block was a report from SBI in January, which was followed by one from the World Bank. They report more or less similar findings. The former flags 'a remarkable decline in rural poverty, estimated at 4.86 per cent in FY24… urban poverty estimated at 4.09 per cent'. The World Bank's report is far more optimistic, pegging 'extreme poverty' at 2.8 per cent for rural India and 1.1 per cent for urban India in 2022-23. If poverty in India is what these estimates show, it would be a matter for rejoicing, as it would have been virtually eradicated.
These estimates of poverty have brought forth many responses. The Narendra Modi government's votaries have been quick to claim that the outcome reflects the success of its policies. Critics have focused on the non-comparability of the latest consumption data with those for 2011-12 as the survey methods have undergone change since. Both neglect the issue of the standard of living in India, and whether the extant methodology of poverty measurement underlying these estimates can lead to anything at all being said on the matter. Finally, more detached observers have brought up the question of what the 'historic low' in poverty implies for the subsidy regime.
Officially approved poverty measurement in India has involved estimating the level of consumption expenditure sufficient to enable the minimum calorie intake necessary for living and working. As calories measure the energy ingested through food and drink, the methodology represents a physiological approach. Arguably, though, there can be another approach. This is to recognise that humans view food in terms of the energy, nutritional value and satisfaction that it provides. Societies have over time arrived at a geographically and culturally mediated norm for food consumption. In India, arguably, this would be represented by a thali, a serving of food comprising carbohydrates, protein and vitamins. Though it may be referred to differently across the country, a thali would be understood to include rice/roti, lentils and vegetables, with dairy/meat/fish extra according to diet and affordability. Indians recognise the thali as a fairly complete and nutritionally balanced unit of food consumption, a meal.
Given the centrality of the thali in Indian life, it would be appropriate to treat it as the metric by which to measure the standard of living. This implies measuring the standard of living in terms of food, but then we believe that the level of food consumption should be treated as its most important constituent. Now, a meaningful question to ask would be, 'How many thalis does the daily consumption expenditure on food translate into?' We use the price of a vegetarian thali to measure the level of food consumption across the population as it is the most basic meal. The price of a thali at Rs 30 was taken from the rating agency Crisil, which calculates the cost of a home-cooked thali using data on the cost of its ingredients sourced from the east, west, north and south of India. The value of food consumption per capita given in the consumption survey for 2023-24 was expanded to include items purchased from the public distribution system and items received free as part of social welfare programmes.
We found that in 2023-24, up to 40 per cent of the rural population could not afford two thalis a day. In urban India, up to 10 per cent of the population could not afford two thalis a day. These findings indicate that levels of food deprivation are much higher than what are implied by the poverty estimates using the same data, which we recounted at the outset. A possible reason for the difference between our estimate of the standard of living and the poverty estimates from the SBI and the World Bank is that we take the expenditure on food as opposed to total consumption expenditure as the relevant measure of consumption. The reasoning was as follows. There are five items of essential expenditure – housing, conveyance, telephony, health and education – that a household cannot forgo if it is to ensure its livelihood. Now, expenditure on food ends up as the residual. Therefore, when appraising the standard of living in terms of food consumption, basing it on the actual expenditure on food would be realistic. Poverty estimation needs a food standard that is based on goods. The thali index serves this purpose while being compatible with accounting for the calorific value of food intake.
We may now address the issue of subsidies. Basing their argument on the much-publicised recent estimates of poverty, some observers have queried whether subsidies in general should be persisted with in economic policy. We believe that this is a discussion that needs to take place, as for too long the discourse on subsidies has been hijacked by political parties to justify competitive welfarism. However, our findings using a thali index of consumption implies that the food subsidy needs more to be rationalised rather than eliminated. For instance, in rural India, the per capita subsidy at the 70th percentile is not much lower than it is at the fifth, even though those in the former class can afford more than twice the number of thalis even without subsidisation. Eliminating the food subsidy at the upper reaches of the distribution while enhancing it at the lower levels would now be optimal.
Balakrishnan is honorary visiting professor, Centre for Development Studies, Thiruvananthapuram and Raj is an economist based in Patna