Empowerment, The New Way Of Measuring Economic Security

Consulting firm Mckinsey & co says with the empowerment line at $12 per person, individuals will have the means to meet the full range of essential needs and begin attaining economic security.

28 Aug 2023 12:00 PM GMT
On today’s episode, financial journalist Govindraj Ethiraj talks to Amit Khera, Senior Partner at Consulting firm Mckinsey & co as well as Amit Prothi, Director General of The Coalition for Disaster Resilient Infrastructure (CDRI).

Our Top Reports For Today

  • <00:50> Empowerment, the new way of measuring economic security at $12 per person with Amit Khera
  • <08:14> China’s Missing Data & India’s Too
  • <12:31> Govt suspects exporters of selling non basmati rice as basmati rice, clamps down
  • <16:57> A new global disaster resilience coalition sets up shop in India with Amit Prothi

NOTE: This transcript contains only the host's monologue and does not include any interviews or discussions that might be within the podcast. Please refer to the episode audio if you wish to quote the people interviewed. Email [email protected] for any queries.


McKinsey Report

There is a new way to look at where we are in terms of economic well being.

Consulting firm Mckinsey & co says that this new empowerment line as it calls it, means going from the World Bank’s extreme poverty line at $2.15 per person a day to $12 per person per day in developing countries in PPP terms.

At this level, says the firm, individuals will have the means to meet the full range of essential needs and begin attaining economic security.

More than half the population of the G20 nations, about 2.6 billion people are below this empowerment line.

And the greatest proportion of people living below the empowerment line, measured as a share of total national population, live in India and South Africa (more than 75%) followed by Indonesia, Mexico, Brazil and China (more than 50%).

This narration is part of a G20 focussed whitepaper from McKinsey called Driving sustainable and inclusive growth in G20 economies, scaling initiatives on empowerment and net zero.

The whitepaper is a companion piece as the consulting firm calls it to a broader McKinsey Global Institute study called from poverty to empowerment, raising the bar for sustainable and inclusive growth.

The paper tries to look at the linkages between growth, inclusion and sustainability.

And also how the G20 economies have to invest some $35 trillion in the next 7 years to be on track for the world to reach net zero emissions by 2050.

TO understand more on this report and also the empowerment line, as McKinsey calls it, I spoke with Amit Khera, Senior Partner at McKinsey, based out of Gurgaon.


Disappearing Data, China and India

Two weeks ago, China paused releasing data on its rising youth jobless rate. The unemployment rate of people aged 16-24 had fallen to a record 21.3% in June.

But as China’s economy is looking weak on a number of fronts, several data points that were earlier available are being yanked back.

Bloomberg News put together several data points that are no longer there.

Land Sales

Numbers showing the amount of land developers bought and the price they paid have been missing from the monthly release. The move came as the amount of land sold for development slumped more than 50% last year and indicated the housing crisis was worse than what the Government has said.

Currency Reserves

It is unlikely that this number has fallen, or likely has increased but this data point is missing, leading to a feeling that some of that money is likely being used to intervene in currency markets. Moreover, a lot of the reserves are hidden, as per an analyst, in books of state owned companies.

Bond Transactions

Even some data from the private sector has become unavailable. In March, the bond market was plunged into chaos after fixed-income brokers stopped supplying aggregate bond quotes to data vendors long relied on by traders. In May 2022, the main bond trading platform for foreign investors quietly stopped providing data on their transactions after record outflows in the nation’s $20 trillion debt market.

Some corporate registration data are also no longer available to overseas clients. Meanwhile, Beijing has been investigating consultants and researchers who help global investors understand China.

Now, let's look at India.

India’s decadal census is delayed as we know. The last one was held in 2011 and the next one, scheduled for 2021 was delayed by Covid, understandably. It is now the middle of 2023 and we are two years past Covid so it is not clear why the delay persists.

Last month the Indian Express reported that the Census enumeration scheduled to take place in 2021 has been pushed to 2024-25 until further orders. In a letter sent to all states and Union Territories last month, the office of the Registrar General of India (RGI) has extended the deadline for freezing administrative boundaries to January 1, 2024.

In the absence of the latest population census figures, which capture household data on employment, housing, literacy levels, migration patterns and infant mortality, the government statistical surveys were still based on the 2011 census, former chief statistician of India Pronab Sen told Reuters last month adding, the quality of any statistical survey depends on census data."

In 2019, India held back release of the national consumption expenditure survey for 2017/18, usually released every five years, over quality issues.

That has delayed changes in the base year for data used in the consumer price index and gross domestic product surveys, which are still based on 2011/12 data.

Coming back to youth unemployment, we don’t have that figure either.

Prachi Salve, in an article in data journalism initiative IndiaSpend, pointed out that India’s population, poverty and consumption data went missing and has not been generated or released since.

She looked at 20 data sets of economic and non economic data to conclude that some 12 sets of data were delayed, in an article that was written around 6 months ago. DELETE

According to her, we don’t have the annual Periodic Labour Force Survey now, the last one being 2021. There are quarterly releases which do not have data on youth unemployment and educated unemployment.

Also, data sets are linked as other statisticians have been pointing out.

Consumption expenditure data is not out since 2012 which in turn impacts poverty data. One set leaked in 2015-16 but the Government said it was reworking methodology and nothing has happened since.

Data sets like the National Family Health Service (NFHS) are on time and available.

Absence of data of course leads to speculation or proxies. Corporate data is quite reliable in India and sales numbers or employment data offer proxies to some extent. Though the organised sector barely reflects 10% of the economy.

India clearly has some catching up to do, if nothing else, to not be compared with China on these metrics.


Meanwhile, data that is available and not looking good is foreign direct investments

The Department for Promotion of Industry and Internal Trade or DIP IT has confirmed what our report last week quoting columnist Ashok K Bhattacharya of Business Standard showed for the first time since 2012-13, gross foreign direct investment in 2022-23 declined by 16 per cent to $71 billion.

Specifically, the SPIRIT refers to the trend continuing into the first quarter of 2023-24, with FDI falling 22 per cent to $18 billion.

According to Bhattacarya, FDI inflows have many components, the most important of which is foreign equity while other components include reinvested earnings etc.

The SPIRIT note says Inflows dipped in segments including computer hardware and software, trading, automobile and pharma. In the last quarter, Maharashtra was the top destination for FDI, followed by Karnataka, Gujarat and Delhi.


From imports and inflows, let us switch to outflows, in rice this case.

India’s rice exporters have been very naughty it appears.

The government has now decided not to allow exports of basmati rice below $1,200 per tonne.


Well, this is to restrict possible "illegal" shipment of white non-basmati rice in the garb of premium basmati rice. I hope you are with me on this one. If you are uninitiated, basmati rice is usually long, slender and aromatic.

Or put differently, you are more likely to have basmati rice as a biryani rather than mixed with dal as many of us do everyday. I am speaking for the majority, I think, not everyone.

Anyway, how interesting and ingenious, one would say, about the exporters of course who would pull this off at such a scale that it would lead to a tariff slap on the face..

So the commerce ministry said yesterday it has directed trade promotion body APEDA not to register contracts below $1,200 per tonne.

Evaluating all this is obviously another task. For which instructions have been issued to the APEDA to introduce additional safeguards to prevent the possible illegal exports of white non-basmati rice in the garb of basmati rice.

The contracts below this ceiling price would be evaluated by a committee to be set up by the APEDA chairman for understanding the variation in prices and use of this route for export of non-basmati white rice. So, not quite the ease of doing business.

Anyway, just to recount. Last year, India banned exports of broken rice. Last month, India banned exports of non-basmati white rice. And last week, a 20 per cent export duty was slapped, yes that word again, on par-boiled non-basmati rice. And now this.

So would all this mean that prices of rice in India are under control ?

Actually, that does not seem to be the case at all but that story later in the week.


Reliance’s 46th Annual General Meeting is tomorrow, which also indicates how old the company is as a listed entity. It went IPO in 1975, also at a time the term either did not exist or surely was not used as it is today.

Also, the issue price was set by the Controller of Capital Issues (CCI) and not by the company. Today companies can set their own stock price though investors tend not to like it when the stock price crashes and seem to yearn for a CCI era, like it happened last year when several tech-based IPOs crashed.

Reliance’s AGM is being keenly awaited by investors and others as it usually contains blueprints for the year or two ahead.

While two corporate actions, the demerging of Jio Financial and listing of it and a roughly Rs 8,000 crore investment in Reliance Retail by Qatar’s sovereign fund have happened recently, eyes will be on what the specific growth and expansion plans will be for Jio Financial whose stock was also hammered for 4 days on the bourses after listing last week before recovering on the 5th day or Friday last week.

The AGM should also offer updates on its new energy initiatives including hydrogen and the like as well as its telecom rollout status, particularly in 5G where it has set itself some stiff targets last year. And of course its traditional oil to chemical businesses around which of course not that much is said.

Reliance AGMs went virtual in July 2020 or at the 43rd AGM thanks to Covid19.

Till then, in recent years, it was held in the Birla Matushri Auditorium in New Marine Lines in Mumbai, usually amidst much din, traffic jams, incessant honking and pouring rain. All in all, a pain to land up there and navigate but I have fond memories nevertheless.

More luxury home projects.

Gated communities and their ilk are growing. Housing major DLF said it was launching two new luxury housing projects worth Rs 15,000 crore in Gurgaon later this year. This follows the conclusion of sales worth Rs 8,000 crore in 3 days in February this year at a project called The Arbour in Gurgaon itself, according to its managing director Ashok Kumar Tyagi, as quoted by wire service PTI.

DLF posted sales bookings of ₹15,058 crore during the 2022-23 financial year, which is a more than two-fold increase from ₹7,273 crore in the previous year.

DLF’s Tyagi said the demand for ultra-luxury, luxury, and mid-income residential properties is very strong.

A new organisation for disaster resilience.

And finally, we spoke of what we need to invest for sustainability.

With an increasing number of natural disasters around us, particularly driven by extreme weather events or other triggers, the ability and skills to respond to these disasters will become critical over time.

The Coalition for Disaster Resilient Infrastructure or CDRI, a global organisation with an India headquarters, was created to address this gap.

It sits in India under the Ministry of Home Affairs and is a multi-stakeholder global partnership of national governments, UN agencies and programmes, multilateral development banks and financing mechanisms, the private sector, and academic and knowledge institutions. Its objective is to build resilience into infrastructure systems and development associated with it.

It provides Technical Support, Capacity-building, Research and Knowledge Management and advocacy and Partnerships:

This is the broad definition of course.

To understand more about CDRI and how it works and will respond, I spoke with Amit Prothi, its director general. Amit has a Bachelors in Architecture from the School of Planning and Architecture in Delhi, and a Masters in Regional Planning from the University of Massachusetts at Amherst and pursued doctoral studies (focusing on urban water resource management) at MIT.

I began by asking him to tell us more about CDRI.


That’s it from me for today.

Have a great Monday and week ahead. Do write to us with any feedback or comments. Look forward to hearing from you on [email protected]

Bye for now.

Updated On: 28 Aug 2023 6:00 AM GMT
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