PM IAS EDITORIAL ANALYSIS JULY 13

Editorial 1 : The verdict of 2024, its amplified message

Context

The final turnout in the 2024 general election (66.2%) is a clear indication of the continued interest in, engagement with and participation of the Indian voter in India’s democratic processes.

An engagement with the electoral process

• The turnout in the 2024 Lok Sabha elections was only 1% lower when compared to the 2019 Lok Sabha elections, but this was still the third highest turnout ever in an Indian national election.
• Voter turnout is the most robust indicator of voter’s electoral participation, and the turnout figures for 2024 only indicate a high level of participation among Indian voters, more so among women voters.
• The enthusiasm shown by Indians for the 2024 election continued even after voting was over. There was keen interest in the exit poll predictions.
• The actual results — which were contrary to the exit poll estimates — resulted in continued discussion about the verdict and its fallout. This goes to indicate the intense and continued engagement of Indians with the electoral process.
• A Lokniti-Centre for the Study of Developing Societies (CSDS) survey indicates 17% of Indians showing no trust in EVMs, while another 43% indicated some trust in it. Nearly 30% of Indians also mentioned decreased trust in EVMs.

Some of the concerns, key issues

• Findings of the Lokniti-CSDS survey clearly also indicate an anxiety about the nature of vindictive politics which has risen in the last few years.
• In the survey, 44% of people mentioned that Opposition leaders have been arrested due to political reasons but only 23% negated this view.
• In the survey, 67% of Indians also expressed the view that citizens should have the right to ask questions to their elected leaders; 20% did not hold this opinion.
• It is important to note that 58% of Indians believed that change of government is important for development of the country, while 32% said continuity of the same party in government was better for development.
• The importance of courts/the judiciary needs to be taken into account, as in the Lokniti-CSDS survey, 58% of Indians mentioned that courts are important in checking the powers of the government. Only 27% believed this may not be necessary.
• There was a strongly shared view (66%) that people should have the power to oppose the decisions of the government if necessary, while only 19% were against this view.
• The verdict of 2024 has also indicated that issues of national pride, national identity, and national security are important.
• But at the same time, and equally important, are the day-to-day issues of the people such as unemployment and price rise which no political party can afford to ignore for long.
• The findings of the Lokniti-CSDS survey indicate that unemployment and price rise were the twin issues of disenchantment with the Modi government; a large number of them also did not want this government to be re-elected.
• The verdict of 2024 has indicated that there is a limit to identity politics, whether it is about caste or religion.

More or less an ideal democracy

• In a functioning democracy, it is important to have a strong Opposition along with a stable and strong government.
• The verdict of 2024 resembles the true character of an ideal democracy.
• The numbers in the 18th Lok Sabha are a reflection of people’s views on various issues related to governance.
• In theory there could not be a better government than this in a functioning democracy, though we know there lies a difference between theory and practice, glimpses of which were seen in the tussle between the ruling coalition and the Opposition on the issue of election of the Speaker and Deputy Speaker of the Lok Sabha.
• There are many other issues which are likely to be a bone of contention between the ruling party and the Opposition.

Conclusion

The views expressed by the people of India should be  taken seriously and both the ruling party and the Opposition should work in tandem for the next five years, trying and resolving issues rather than complicating them.

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Editorial 2 : The PDS impact on household expenditure

Introduction

The Public Distribution System (PDS) is an important social security programme in India. Its objective is to ensure food security. Today, up to 75% of the rural population and 50% of the urban population are eligible for subsidised foodgrains under the National Food Security Act (NFSA), 2013.

On representativeness

• It is an empirical question whether households indeed diversify their food consumption.
• With the release of data from the Household Consumption Expenditure Survey (HCES):2022-23, there will be renewed interest in the above line of inquiry, i.e., the impact of consumption of free food items from the PDS on expenditure on items other than foodgrains.
• To the extent possible, the HCES:2022-23 canvassed information on food and non-food items received by households free of cost through various social welfare programmes.
• The objective of the survey is not to provide precise estimates of the proportion of households receiving benefits under every scheme.
• In most cases, survey estimates of coverage of a programme will be lower than that suggested by the administrative data.
•  A common conjecture in the literature on the PDS is inclusion error (when an ineligible household consumes from the PDS) and exclusion error (when an eligible household is not consuming foodgrains from the PDS).
• For this purpose, researchers will compare the proportion of households consuming PDS items with the coverage under the NFSA.
• While care should be exercised in terms of interpreting the estimates, one advantage of the survey data is that it allows us to examine the characteristics of households that report benefits from the programmes.
• Unless detailed information is sought on the nature of an ailment or disease in the case of health shocks, and waiver of fees or reimbursement in school or college, imputing the value of free medical services and education services received by the households is not possible.
• In the case of education and health, the NSSO conducts separate surveys where detailed information is canvassed on out-of-pocket expenditure and free services that are availed by a household.
• One might ask why one cannot use data on information paid by households to impute the value of medical services.
• Insurance products are treated as an investment and not consumption. The relevant information is sought as part of the All India Debt & Investment Survey, and not as part of the HCES.
• In order to provide guidance to analysts and researchers, the NSSO, for the first time, decided to impute the value figures of selected food and non-food items which were received free.
• This allows us to compute two metrics. The first is the Monthly Per Capita Consumption Expenditure (MPCE) of a household, which is the ratio of monthly consumption expenditure to household size.
• The second metric is the value of household consumption in a month considering the imputed value of free food and non-food items, i.e., ‘MPCE with imputation’. Both metrics are published by the NSSO in its report.

Imputation of values

• The NSSO has suggested two sets of values for each State and by sector (rural, urban) for imputation of food and non-food items received free of cost — modal unit price and the 25th percentile unit price.
• Consumption expenditure refers to out-of-pocket expenditure while value of consumption would include free and subsidised items consumed by households.
•  In the report published by the NSSO, imputation has been done using the modal price only for items received free. The operative word is free and not subsidised. Thus, no imputation is done for the purchase of food items from the PDS at nominal regulated prices.
• The main item that a large proportion of households received free was foodgrains from the PDS.
• Not surprisingly, at the all-India level, we find that in rural and urban India, about 94% and 95%, respectively, of the value of imputed items is attributable to food items.
• Needless to say, depending on their use case, researchers can impute the modal value for calculations for purchases from the PDS at the subsidised rate.
• This will increase the average MPCE with imputation. In short, there is evidence that even a limited imputation exercise establishes that in-kind social transfers help increase the value of consumption of poorer households.

Way forward

• Ever since the release of the report, there have been calls for a larger discussion on where the poverty line should be drawn.
• Among the issues that need to be considered is whether one needs to estimate the number of poor households based on the expenditure or based on the total value of consumption which includes the value of free items consumed.
• Needless to say, in-kind social transfers have implications for the well-being of households that are at the bottom end of consumption or income distribution.