How Many Thalis Indians Can Afford – and What That Says About Their Standard of Living

In 2014, during the campaign for the elections to the Lok Sabha, Prime Minister Narendra Modi had announced that “Achche din aane waale hain (Good times are to come)” for Indians, assuming, naturally, his party would be forming the government.

At low levels of material consumption, good times for most people would be associated with a rise in consumption. The publication earlier this year of the National Sample Survey’s (NSS’s) Household Consumption Expenditure Survey 2023-24 (HCES 2024), based on a survey conducted between August 2023 and July 2024, provides an opportunity to assess whether a faster rate of growth of consumption has indeed been achieved.

Growth of consumption

In Table 1 are presented the growth rates of monthly per capita expenditure (MPCE) since 2011, the year of the last consumption survey of the previous decade. .

Table 1: The growth of monthly per capita consumption expenditure

Notes: CAGR is the average annual growth rate. Authors’ calculation from HCES 2024. Expenditure is at 2011-12 prices.

The data point to a substantial decline in growth rate of consumption after 2011 for the urban population and a significant one for the rural. This should be kept in mind while reading reports of the buoyancy of India’s economy, notably the feature that it is currently the fastest growing major economy of the world. The slowing of consumption growth is not surprising, given the slowing of the  rate of growth of the economy  across almost all its sectors during the past decade.

The conclusion  would be that that while consumption has continued to grow in India, the rate of growth has actually slowed. Economic policies adopted since 2014 have not been able to raise it. The “good times”, as reflected by the growth of consumption, have not come any faster than they have been coming before 2014.

Also read: Why India Needs to Update Its Own Poverty Line

Inequality

The consumption shares of the top 10% and bottom 50% of the population for three years, enabling a study of its change over time, are presented in Table 2. While there is growth in inequality in the first of the two sub-periods represented, there is an improvement in the second one, which covers a decade after 2014. This improvement is notable  only for the urban section of the bottom 50%, though. The reduction of consumption inequality since 2011-12 is also borne out by the Gini coefficient presented in HCES 2024. Despite the improvement recorded, inequality remains high when the share of the bottom 50% is compared to that of the top 10%.

It may be mentioned that the distribution of consumption revealed by HCES 24 is less unequal than that of the distribution of income in India published by the Paris-based World Inequality Lab. Also, the latter source presents data showing an increase in income inequality during the same period. These divergent trends are not necessarily  contradictory, however, as for any given increase in income across the population  consumption may be expected to rise more at the lower levels of income.

Table 2: Inequality (consumption shares)

Source: Authors’ calculation from HCES 24.

The standard of living: A thali index

As we have seen, there has been growth of consumption in India since 2014 and a reduction in  its inequality . But what can be said of the standard of living implied by the level of consumption today?We  evaluate  the standard of living based on a specific metric, the number of thalis afforded. This is arrived at  by translating the daily per capita expenditure on food into the number of thali meals that it would have commanded in the year of the survey, 2023-24, across the population. We consider the choice of the thali meal as a measure of the standard of living as intuitive, for it represents a recognisable unit of food intake across the country, even if the exact term for it may vary. We adopt two thali meals a day as the minimum acceptable standard of living.

Computationally, this raises the question of the price of  a thali to be used in estimating the real value of consumption  A ready source of this information is the rating and analytics agency Crisil, which publishes the average cost of preparing a thali at home, both vegetarian and non-vegetarian, based on input prices prevailing in north, south, east and west India. For a vegetarian thali in 2023-24 it came to approximately Rs 30 on average over the year. The cost of preparing a non-vegetarian thali in that year was reported as Rs 58.

The value of food consumption, termed ‘MPCE with imputation’ by the NSS, used here includes purchases from the public distribution system, the imputed value of supplies “received free of cost by the households through various Social Welfare Schemes”, “cooked food received free in workplace” and “cooked food received as assistance”. While data on the last two items are available in HCES 2024, the value of free supplies of food had to be calculated. The data sources for this item are listed at the bottom of Tables 3 and 4.

Estimates of the number of thali meals per day afforded across the population are presented, for rural and urban India, respectively, in Tables 3 and 4.

Table 3: The thali index of consumption, Rural India

Notes: Authors’ calculation from Table A10F of HCES 2024 and here.

Our estimate of the real value of consumption of food serves as guide to the standard of living of the population at large . In 2023-24 in rural India, up to 40% of the population could not afford two vegetarian thalis a day, up to 95% of the population could not afford two non-vegetarian thalis a day, and up to 80% could not afford the combination of one vegetarian and one non-vegetarian thali at a total cost of Rs 88 a day. In the same year in urban India, up to 10% of the population could not afford two vegetarian thalis a day, up to 80% could not afford two non-vegetarian thalis, and up to 50% could not afford the combination of one vegetarian and one non-vegetarian thali a day. Food deprivation, at least in rural India, is more widespread than it is recognised.

Table 4: The thali index of consumption, Urban India

Source: Authors’ calculation from Table A10F of HCES 2023-24 and here.

Beyond the analysis of aggregated data, ethnographic studies of the labour process and journalistic reportage from the field all have value in furthering our understanding of the standard of living in India. Some studies of this kind already exist, including by Anumeha Yadav and T. Muralidharan.

Do recent poverty estimates for India reflect the standard of living?

The publication of HCES 2024 elicited poverty estimates for India from diverse sources, among them the State Bank of India and World Bank. These mostly follow the practice of establishing a poverty line based on consumption possibilities. The poverty line identifies the purchasing power needed to satisfy the daily calorie intake deemed necessary. The proportion of the population with consumption expenditure less than the poverty line is classified as “poor”.

However, it would be agreed upon, we assume, that a measure of the standard of living in terms of tangible goods afforded would yet be useful to have. This was the motivation that guided  the adoption of a thali index of consumption by us. The resulting estimates of the level of consumption across the population provide perspective on the estimates of poverty in India that have followed the publication of the HCES 2024. Among them, the one from the State Bank of India shows poverty to be less than 5% in both rural and urban India. As seen above, the thali index of the standard of living, on the other hand, points to higher levels of food deprivation based on the standard of two thalis per day as the minimum acceptable food intake.

Also read: Reality Check: Beyond Statistics, is Poverty Actually Reducing in India?

This difference very likely arises because poverty studies tend to assume that households or individuals are free to spend all their income on food. The assumption is untenable, as some items of expenditure – such as on health, education, housing, transportation and communication (read mobile phone) – assume priority, for expenditure on them is needed to engage in economic activity. This circumstance could effect a squeeze on expenditure on food, which along with the price of food determines actual consumption possibilities.

Counter-intuitively, households may have to eat less to secure their livelihood. So, starting out with the actual expenditure on food and translating it into a measure of command over food is, in our view, realistic. The relevance of such an approach may be understood by noting the following. The estimates of poverty in the SBI report are based on an updation of the Tendulkar poverty line for 2011-12 by applying the subsequent inflation rate. Through this procedure, its authors arrive at monthly poverty lines of Rs 1,632 for rural areas and Rs 1,944 for urban areas in 2023-24. We can see from Tables 5 and 6, respectively, that these expenditure levels would not have translated into two vegetarian thalis per person daily for up to 30 % of the rural population and 20% of the urban in that year. Of course, this is assuming that the income implied by the poverty line is entirely on food.

A second set of poverty estimates, using data from the HCES 2023, however, has been published by the World Bank this April. They are even more optimistic than those from the State Bank of India, pegging “extreme poverty” at 2.8% for rural India and 1.1% for urban India. We leave it to readers to compare these poverty estimates with the estimates of the standard of living in India in 2023-24 using the thali index.

Our findings using a thali index of the standard of living suggests that there is a case for reviewing the measurement of poverty in India. For a start, we would argue for a poverty measure that includes at least two thali meals a day. In this context, we refer to the emerging practice of viewing poverty as multidimensional. This is both useful and an improvement over the focus hitherto on income poverty. However, a declining multidimensional poverty based on an index that comprises up to 12 indicators of deprivation can mask a persisting food deprivation, which in our view must remain at the core of appraising the standard of living, and thus poverty.

The estimates presented here indicate that the levels of poverty as food deprivation in India are likely higher compared to the estimates based on the extant approach to the measurement of income poverty. The unit price of food used to arrive at feasible food consumption is central to this exercise. Our study points to the salience of the price of food for the standard of living in India, a factor which receives far too little attention from policy makers but will remain crucial to the solution to the problem of poverty in India.

Sections of this article were previously published on Ideas for India.

Pulapre Balakrishnan is Honorary Visiting Professor, Centre for Development Studies, Thiruvananthapuram and Aman Raj is Teaching Fellow, Krea University, Sri City. We thank Aditya Bhattacharjea, Mahendra Dev, Udaya Shankar Mishra, P.C. Mohanan, M. Parameswaran, Indira Rajaraman, Preeti Sampat and Rishi Vyas for advice and discussion. Errors if any would be ours.

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