Subject: Indian Economy/Society

India's remarkable poverty reduction achievements present an intriguing paradox when juxtaposed with persistent hunger challenges, highlighting the complex relationship between economic growth and nutritional security. The Global Hunger Index 2023 ranking of India at 111th position, despite significant poverty reduction, underscores this divergence.

Growing Divergence Between Poverty and Hunger

• Poverty Reduction Success: According to State Bank of India reports, poverty rates have declined significantly to 4.6% in 2024 from 5.3% in 2023, with rural poverty showing impressive improvement from 7.2% to 4.86% in FY24.

• Consumption Pattern Shifts: The Household Consumption Expenditure Survey (HCES) 2023-24 reveals:

  • Average Monthly Per Capita Expenditure (MPCE) of ₹4,122 in rural areas and ₹6,996 in urban areas.
  • Non-food items constitute 53% rural and 60% urban expenditure, indicating shifting consumption priorities.

Impact of Reduced Social Expenditure

• Agricultural Sector Impact:

  • Reduction in rural development expenditure since the 1990s has led to decreased agricultural productivity.
  • Affected irrigation infrastructure and technology adoption in farming.
  • Created an agrarian crisis impacting food grain production.

• Food Security Challenges:

  • Despite increased food subsidy allocation of ₹2.03 lakh crore for 2025-26, the real impact is diminished due to:
    • Rising healthcare costs.
    • Increasing education expenses.
    • Growing transportation expenditure.

Consequences on Poor Households

• Budget Squeeze:

  • Essential non-food expenditures (healthcare, education) forcing poor households to reduce food spending.
  • Inadequate public services compelling out-of-pocket expenses.
  • Rising inflation affecting purchasing power.

• Nutritional Impact:

  • Reduced dietary diversity.
  • Compromised food quality and quantity.
  • Increased vulnerability to malnutrition.

The divergence between poverty reduction and hunger highlights the need for comprehensive policy interventions. While PM Garib Kalyan Anna Yojana and National Food Security Act provide essential support, addressing this challenge requires enhanced social sector spending, particularly in healthcare, education, and nutrition programs, alongside strengthening the public distribution system.