Government Freebies to be Computed [UPSC Current Affairs]

For the first time, the government has decided to compute the value of freebies to assess the impact on household consumption. In this article, you can read more about this decision of the government and its implications for society. This topic is relevant for the IAS exam current affairs segment.

Computation of Value of Freebies

• Earlier the Consumer Expenditure Survey (CES) had questions on freebies received by households.
• But this is the first time that the Ministry of Statistics and Program Implementation (MOSPI) is looking to calculate the imputed value of freebies and subsidies given by the government at different levels.
• The Finance Ministry after a meeting with the Ministry of Statistics and Program Implementation officials highlighted the need for calculating the imputed value of freebies.
• The government is planning to calculate the value of freebies in a state-wise manner since the freebies given by a state differ from other states.
• The data collected through the exercise will give significant insights into household consumption and poverty levels.
• The government is also planning to collect the data into two sets such as one with the imputed value of freebies and the other data without the imputed value of freebies. 
• The data collected without the imputed value of freebies will be comparable to the older data.
• In order to ensure consistency the Ministry of Statistics and Program Implementation is also planning to conduct a back-to-back consumer expenditure survey.
• The important uses of consumer expenditure surveys are the determination of the poverty line and they also help to build a consumer price index basket.
• The significance of freebies and subsidies given by the government was highlighted by a working paper of the International Monetary Fund (IMF) which estimated the poverty line and it found a significant difference in poverty lines when it is compared with and without freebies and subsidies.
• In the past, the union government announced a free food program during the lockdown to contain the spread of covid 19 pandemic which continued until December 2022. Recently, the government introduced free food grain program under the National Food Security Act.

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