Food Consumption Trends Point at Real Income Decline Before Pandemic -Prabhat Patnaik

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published Published on Aug 1, 2020   modified Modified on Aug 2, 2020

Why has there been a tendency toward persistent ‘excess supply’ in the foodgrain market when growth rate of foodgrain output has barely exceeded the population growth rate?

The pandemic and the lockdown are certainly causing an absolute shrinkage in the gross domestic product (GDP) of the Indian economy. But these tend to obscure something very serious that was happening even earlier, namely, a real income decline for vast numbers of working people.

There are several pointers to this fact. The rate of chronic unemployment in 2018-19 was the highest ever in the last 45 years at 6% compared with the usual 2% to 3%. The per capita real consumption expenditure in rural India, according to the National Sample Survey (NSS) 2017-18, was 9% lower than in 2011-12, the previous year of the large sample survey.

Such an absolute decline in the average consumption expenditure of so large a population is quite unprecedented. This finding was so disturbing that the Narendra Modi government decided to suppress the survey results altogether. Its claim that the finding was unreliable is quite absurd: there is no reason why the world’s largest periodic sample survey which has been going on for decades, no matter what its limitations in general, should suddenly become unreliable for just one particular year. Clearly, something serious has been going on in the Indian economy.

A confirmation of this fact comes from some recent developments in the food economy. Taking the entire neoliberal period since 1991 into account, the growth of foodgrain output in the country has barely nosed ahead of the population growth: between 1991 and 2018, while population growth has been roughly 1.6% per annum, the growth of foodgrains has been about 1.8% per annum.

And yet, curiously, we find two clear phenomena: first, the proportion of procurement by the Food Corporation of India in total output has increased greatly over the neoliberal period as a whole, but has picked up momentum after the world capitalist crisis of 2008.

Please click here to read more., 1 August, 2020,

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