Q.there is a growing divergence in the relationship between poverty and hunger in India. The shrinking of social expenditure by the government is forcing the poor to spend more on non-food essential items squeezing their food budget. Elucidate

Body Analysis

Reasons for the Divergence Between Poverty and Hunger

• The 'Food Budget Squeeze': The poorest households are forced to spend an increasing share of their income on essential non-food items such as private healthcare, education, transportation, fuel, and lighting. The rising cost of these services has absorbed most of the gains in real income, forcing families to reduce their food expenditure.
• Shrinking Government Social Expenditure: Reduced public spending on essential services has made the poor highly dependent on expensive private markets for education and healthcare, directly squeezing their household food budgets.
• Low Social Sector Spending: Historically, India's social sector spending has lagged behind comparable economies. According to the National Health Profile 2018, India spent just 1.02% of its GDP on public healthcare (compared to 9.4% in Maldives, 2.5% in Bhutan, and 2.9% in Thailand). Similarly, public investment in education stands at around 2.7% of GDP, compared to 3.4% in Sri Lanka and 7.4% in Bhutan.
• Distress Migration and Rising Costs: Large-scale seasonal and temporary migration from rural to urban areas in search of work has increased living costs for the working poor. This "footloose" labor force faces high transportation and temporary housing costs, leaving less disposable income for food.
• Loss of Non-Market Food Sources and Changing Preferences: Access to traditional, non-market food sources (like common forest produce or local commons) has declined. Additionally, as noted by economists Abhijit Banerjee and Esther Duflo in Poor Economics, there is a growing preference for better-tasting, more expensive calories, alongside increased spending on non-food items like mobile phones and television.
• Shift to Cash Transfers: Proposals to replace physical food subsidies with Direct Benefit Transfers (DBT) or Universal Basic Income (UBI) risk exposing vulnerable populations to market price volatility, potentially worsening nutritional security.
• Urban Housing Poverty: Surging land prices and high urban rents consume a significant portion of poor households' wages, directly reducing their food budgets.