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December 11, 2019

Indian poor grow hungrier under Modi as economy slows

Business

December 11, 2019

Kesroli Ko Bas, India: In Kamlesh Devi’s kitchen the only food is a fistful of pungent red chillies, a few wilted carrots, some oil and a big container of subsidised flour.

Until three years ago, the 40-year-old landless labourer and mother of five in rural Rajasthan seemed to be clawing her way up in the world — but India’s economic downturn has hit her family’s diet.

“Earlier we ate vegetables every day, and lentils on most days. Now sometimes there is not even a vegetable in the house,” she said. When India’s economy was buoyant, her husband had steady work in the construction industry, while she cleaned homes. The couple borrowed Rs200,000 ($2,800) to improve their rudimentary village house.

These days, though, Devi feels herself slipping back into the kind of grinding poverty she thought she had left behind. With India’s real estate sector beset by troubles, her husband is often without work. Her own wages are consumed by debt repayment and school fees. Cash for nutritious food is in short supply, leaving the family to subsist mainly on rotis — Indian flatbread — seasoned with tiny quantities of vegetables or chilli.

“We buy fresh milk as and when we can afford it, but there are lots of times when we do not even have enough milk for tea,” said Devi, whose hand-me-down refrigerator stands empty.

Such tales of hardship are increasingly common in rural India, where families who were being lifted out of poverty by rapid economic growth are reeling from the effects of a sharp economic slowdown.

For the past six quarters, India’s economy has lost momentum. Growth has tumbled from an annual expansion rate of 8.1 percent in the first quarter of 2018 to just 4.5 percent in the third quarter of this year. Farmers’ incomes have been squeezed by government efforts to keep food prices down, but hardest hit are landless labourers who had benefited from a growing number of non-farm jobs yet now face lay-offs and bitter struggles to find paid work.

As their household incomes have dropped, many families are cutting back on nutritious foods such as milk, eggs, fruit, vegetables and lentils, and instead mainly consuming subsidised grain sold by the government.

“Our stomachs are empty,” said Devi’s neighbour, Sushila, whose employer of nearly five years — a small enterprise making plastic irrigation pipes — shut down eight months ago.

Sushila, who has a school-age daughter and an ailing husband, now scrapes by on occasional work as a farm labourer, earning about (Indian) Rs150 ($2) per day in harvest or sowing season.

“The doctor has advised my husband to eat one egg every day, but we cannot afford it,” she said. Quantifying the precise impact of India’s slowdown on diets is difficult given the lack of timely official data. But independent analysts say many families never recovered from the twin shocks of Prime Minister Narendra Modi’s November 2016 cash ban and the chaotic introduction of a new value added tax system, which together had a devastating impact on labour-intensive small-scale industries.

A leaked Indian government report showed that in the year after the cash ban rural Indians bought less of basic food items including grains, sugar, salt and lentils. “There had been a structural shift in diets, which were moving away from large calorie intake to higher protein intake,” said Mahesh Vyas, chief executive of the Mumbai-based Centre for Monitoring the Indian Economy (CMIE).

“That shift seems to have gotten arrested or even reversed. The composition of diets is falling back in favour of just meeting your calorie requirements, rather than your nutritional requirements.”

India’s unemployment rate hit a 45-year high of 6.1 percent in the year after the cash ban, government data show. The unemployment rate rose to 8.5 percent in October, according to CMIE estimates. The percentage of working-age Indians employed or seeking jobs has fallen from 48 per cent before the cash ban to just over 42 percent at present, the CMIE said, as many discouraged jobseekers have given up the hunt for work.

Not far from Kesroli Ko Bas village stands the Fort View Residency, a partially built and seemingly abandoned real estate development with more than 1,000 one- and two-bedroom apartments in mid-rise blocks.

Anil Mistry, 32, a skilled mason, said he worked on the project for five years, earning Rs600 per day. But work was suspended a year ago when the lenders that had been financing much of India’s real estate industry ran into liquidity problems.

Today Mr Mistry has part-time work, mostly on small-scale individual projects, and his large multigenerational family is cutting back on spending.

“I used to buy 2kg of milk every day for the family, now we buy only one. Oil, sugar — everything that we were buying before has been cut by half,” he said.

Bantoo Sharma, who was laid off after working for eight years assembling Honda motorbikes at a factory outside Delhi, said it was now a luxury to buy milk and vegetables for his two children, aged 10 and six.

His wife Rama and his children have moved back to their village where they depend on credit from a kindly shopkeeper. “Even earlier we did not have enough to eat,” Mrs Sharma said. “But for the past three months, all we have is roti and chilli sauce, with a few drops of oil.”

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