Deprivation takes many forms: lack of access to food, education and health care. The COVID pandemic has exacerbated all these deprivations and, even worse, the death rate. Here our focus is on the lack of food. The 19th-century German statistician and economist Ernst Engel observed that “the poorer a family, the greater the proportion of its total expenditure that must be devoted to the provision of food”. Based on this law, we examine the change in the share of food expenditure. during the pandemic.
We use monthly data from the Consumer Pyramid Household Survey to monitor the Indian economy on household consumption expenditure in India between January 2019 and August 2021. We examine what happened to food expenditure stocks in both rural and urban areas, and during different income decisions, two waves of the pandemic, one relative to the pre-pandemic period. To obtain information on changes in food composition, we separate food expenditure into amounts spent on cereals and non-cereals.
Nutritional disruptions resulting from both the production side (food production, processing and distribution) and the demand side (economic and physical access to food) during a pandemic. Restrictions on the movement of food and closure of wholesale and retail outlets disrupted the food supply chain. Constrained demand along with resultant rise in food prices, unemployment and loss of income. However, the demand for essential commodities like food grains remained largely unchanged during the lockdown. The breakdown of the food supply-chain could have been prevented if wholesale markets within a state were better integrated in the sense that food products could be moved from surplus to deficit areas. And, on the demand side, substitution within and between commodity groups would have been easy, but for ‘panic’ purchases by some households.
The pandemic-induced lockdown resulted in a sharp increase in the share of food in total expenditure in rural and urban India. The share of food in total expenditure in rural India ranged from 45% to 50%, and in urban India, from 41% to 45% in the 14 months prior to March 2020. However, the respective share in rural India rose to 61%. and 59% in urban India in April 2020, a period that coincides with a stringent nationwide lockdown. Movement restrictions at the start of the pandemic acted more like a temporary setback than a permanent one, resulting in a drop in the share of food in total expenditure. But a small increase (53% in rural areas and 51% in urban areas) occurred during the more deadly second wave (April-May 2021), when some Indian states closed and containment zones as measures to control the spread of the novel virus. made use of. coronavirus, but no nationwide restrictions were imposed. This phenomenon is observed in families of different income levels.
The Engel curve for food, which shows how household spending on it changes with household income, shifted upward between January and April 2020. In urban areas, the before-versus-later gaps in food-budget stocks were wider for higher-income earners in this period. Deciles compared to low-income decibels. This can be partly attributed to consumption of food sourced from outside, ready-to-cook/eat food and more expensive food items as people work from home. In rural areas, the difference was highest for the lowest decile, with a narrowing for the middle decile and a widening at the high decile. It is not surprising that the poorest people in rural areas have been the most affected by the lockdown. The overall Engel curve shifted downward once the lockdown restrictions were lifted, remaining above pre-pandemic levels even after the severe second wave had subsided.
A general trend of decreasing share of food expenditure on cereals is observed in both rural and urban India. The two findings are startling. First, while the urban trend of decline has been relatively smooth, the rural trend shows an upswing, and the three peaks in rural areas coincide with the nationwide lockdown (April 2020) since the start of the pandemic in India, the peak of the first wave (November 2020). ) 2020) and the ascent of the second wave (April 2021). Second, the country saw a sharp decline in the stock post-lockdown in urban India, but no reversal to pre-pandemic levels. Obviously, income levels did not recover fully and changes in relative food prices prompted substitution within the household consumption basket.
On substitution, Nobel laureate Angus Deaton argued, based on national sample survey data, that value-driven substitutions are generally limited to switching within food categories (eg: between low and good quality rice). However, if people face heavy price and income shocks, they are unlikely to sacrifice other essentials to maintain subsistence-level food consumption. So not only were good quality grains replaced by substandard foods, there may have been a shift away from fruits and high-nutrition vegetables.
The poor (ie the three lower levels of income) in both rural and urban areas bearing the brunt of these inevitable but unhealthy choices are a cause for concern.
It is foolish to say that the Finance Ministry of India failed to see the writing on the wall. But if he did, and yet the 2022 budget cuts the Centre’s food subsidy by about 28%, money for mid-day meals by 12% and funding for jobs under the Mahatma Gandhi National Rural Employment Guarantee Act by 25% 23 (compared to the allocation for 2021-22), this reflects not only an insensitivity to the needs of our poor, but also an ill-informed view that India’s growth is demand rather than investment. stalled due to lack of
Nidhi Kaikkar and Raghav Gaiha, respectively, Assistant Professors of Management, Ambedkar University, Delhi; and a research associate, Population Aging Center, University of Pennsylvania.
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