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UMass’ Deepankar Basu says families in India are paying more out of pocket for services that used to be state sponsored, causing them to make tough choices in their diets

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JESSICA DESVARIEUX, PRODUCER, TRNN: Welcome to The Real News Network. I’m Jessica Desvarieux in Baltimore. As part of our economic coverage here at The Real News, we want to introduce you to the latest research from the Political Economic Research Institute at UMass Amherst. Our guest today is Deepankar Basu. He’s an assistant professor of economics at the University of Massachusetts Amherst, and he recently completed research related to the growth of the service sector in India. He joins us today to discuss his working paper, titled: Why Is Calorie Intake Falling if Income is Rising in India? Thank you for joining us, Deepankar. DEEPANKAR BASU, ASSIST. PROFESSOR OF ECONOMICS, UMASS AMHERST: Thank you for having me. DESVARIEUX: I find this to be very interesting as a way to talk about economics through how much food people consume. But essentially, from my understanding, calorie intake tends to increase with income, right, Deepankar? But we’re seeing the opposite trend happening in India. So can you explain and answer that question in your paper, why is calorie intake falling if income is rising in India? BASU: Yeah, that’s correct. If we look at countries across, at a point in time across countries, or if we look at different states in India at a point in time, calorie intake increases with income. So those who are rich can really consume higher amounts of calories. In India, on the other hand, from the last 20 years, income has been growing at a fast pace but we have seen average calorie intake decline. So that is really a puzzle, and economists and policy-makers have started studying that, this, and now people call it a calorie consumption puzzle. Now, there are various explanations that have been offered in the literature as to why this is happening. One prominent explanation is what is known as the declining calorie need. And there are two essential elements of this explanation. One, that the structure of the economy is changing, people moving out of agriculture. Agriculture is very physically demanding. And so as they move from agriculture to less physically demanding work, they require less calories. The second element is that the epidemiological environment in the country is improving. So as the epidemiological environment improves, diseases like diarrhea, the incidence of those diseases go down, and therefore people are able to retain higher amounts of calories that they consume. So people have put these two elements together to argue that the calorie needs have gone down, and that’s why we observe people consuming lower calories. DESVARIEUX: But you don’t agree with that. What are you guys theorizing? BASU: We don’t agree with this explanation for many reasons. First, the Indian Council of Medical Research comes up with calorie norms. What they think to be the minimum amount of calorie that is required for healthy living. And when we look at the calorie intake across the country, we see a vast majority of the population falling below that calorie norm. Not only that, over time more and more people have fallen below this calorie norm. Second, if we look across the world, the amount of malnutrition and other kinds of problems in India are comparable or even worse than many sub-Saharan African countries who are much poorer than India. So because of this we believe that calorie needs cannot be a full explanation. There must be some kind of constraint operating on households which is forcing them to consume lower calories, and we offer one explanation, or one mechanism, or how such a constraint might operate. DESVARIEUX: Okay, let’s talk about these household constraints. What in particular? BASU: So, what we suggest is that we can divide up the expenditures of households into two types of essential elements. One we can call food, and another we can call non-food essentials. What would go into these non-food essentials would be expenditures on essential services like healthcare, education, transportation, and other important services which are required for daily life. Now, our explanation of the calorie decline is that over the last 20 years, because of various structural factors in the economy, the households have been forced to spend more and more on these essential services, and therefore the income growth that we see has been completely taken up by these non-food essentials. And therefore the amount that is left to be spent on food has not increased. DESVARIEUX: Let’s talk specifics here. What specific policies, like you mentioned healthcare, transportation. What has changed over time? Why are people paying more out-of-pocket? BASU: So, one big change that has happened is from the early to the mid-80s onwards, there has been a gradual shift in the policy in India in the central level, and also at the state level. More and more neoliberal policies have been adopted. One important element of the neoliberal set of policies is that the public provisioning of essential services like education, healthcare, public housing, transportation, has been reduced. So therefore, households have been forced to replace this expenditure that earlier the state used to provide by private expenditure. And that, we are suggesting, has taken up all the income growth. DESVARIEUX: All right. Deepankar Basu, thank you so much for joining us, joining us from Amherst, Massachusetts. Thank you. BASU: Thank you. DESVARIEUX: And thank you for joining us on The Real News Network.


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Deepankar Basu is an Assistant Professor of Economics at the College of Social and Behavioral Sciences at the University of Massachusetts - Amherst.