The savings rate has dropped from 24 percent to barely 20 percent, while industrial investment has produced very little new growth. Capital goods output is still below the 1991 level. Although the overall manufacturing growth rate has picked up from 2 percent to as high as 8 percent, it is still below the rate of the 1980s. Despite seven good monsoon seasons in a row, virtually unprecedented in recent history, agricultural production has been sluggish. Daily per capita food grain consumption has fallen from 510 grams to 465 grams.
Inflation always works to the disadvantage of the poor in India, who have fixed incomes.
It is inequality-enhancing. But Singh's conscious policy of jacking up PDS prices and thus destroying one of the few mechanisms that could protect some of the poor, partially, against inflation has been doubly inequality-enhancing. What this means for India's 380 million officially recognized poor is spending more money to buy less food, reducing caloric intake and approaching starvation in many cases. This food reduction has been accompanied by cruel cuts in already meager spending on shelter, health and clothing. India's official statistics lag behind reality, but the available numbers suggest that the official poverty rate rose from 38 percent in 1989 and 1990 to 41 percent in 1991 and 1992.