Outdated census data threatens India’s vast welfare programmes

By Pratik Parija and Ruchi Bhatia

Outside a small warehouse in Matlong, a sleepy village in eastern India, dozens of families line up each morning clutching ration cards. A shopkeeper beckons them into the mud-walled storeroom, where he weighs giant sacks of grains and checks eligibility for government handouts. A thin layer of fallen rice covers the floor.

This scene in the state of Jharkhand is a familiar one across India, home to the world’s largest free food program. Over the decades, the South Asian nation has expanded welfare benefits to curb extreme poverty, weaving a basic safety net for those living on the fringes of society.

But this mammoth effort relies on a firm understanding of who needs to be helped — and in today’s India, that basic economic and demographic data has become tinged with political meaning. It’s creating delays and information gaps that jeopardize policymaking and limit the effectiveness of vast ration programs designed to lift hundreds of millions out of destitution.

Data-gathering for everything from measuring inflation to counting unemployment has been criticised by economists as outdated and inexact. Most glaring of all, the country is already four years late with its latest nationwide census, a delay initially blamed on the pandemic but since extended. It’s the first in more than 150 years of census-taking, and a hold-up that means all manner of government agencies are still using 2011 numbers to set budgets and divide resources.

This month, Prime Minister Narendra Modi’s administration announced that the new census would be released by March 2027. But even with that timeline, officials would likely need many more months to integrate vast information about India’s population — estimated currently at more than 1.4 billion people — into budgets and policies.

For India’s investors, these statistical holes make the country a bit of a black box. The private sector depends on demographics information for market forecasting and analyzing consumer trends. Sonal Varma, an economist at Nomura Holding Inc., said this “critical data gap” creates uncertainty in sectors from retail to real estate.

The bureaucratic challenge of organizing the world’s biggest census is immense. Demographic data is sensitive in India, where vast cultural differences across a country with 22 major languages create all sorts of cleavages. Caste affiliations are a particularly touchy metric.

“The dearth of official data shows government apathy,” said Palaniappan Chidambaram, a senior leader in the opposition Congress Party and former finance minister. “Benefits are being denied to a large number of people who deserve welfare.”

A spokesperson for the prime minister’s office didn’t respond to requests for comment.

India’s constitution mandates that two-thirds of citizens, or more than 800 million people, can receive free food — typically dry rations like rice and wheat. Yet the central government sets those allocations using the 2011 census, effectively ignoring population growth and changes in households over more than a decade. More than 140 million Indians are affected, according to Bloomberg calculations. An official familiar with the matter estimated over 30 federal welfare schemes, worth billions of dollars, were impacted. He asked not to be identified because the estimate isn’t public.

Without fresh numbers, Niti Aayog, a government think tank, is left to estimate shifts in India’s demographics. These calculations are then used by the finance ministry to fund the ration programs. None of these are small. Modi’s administration is spending $24 billion on food support alone this fiscal year.

For Indians like Archana Gurjar, 24, the bureaucratic gap translates into a very real problem. Despite living in Delhi, one of the nation’s wealthiest cities, Gurjar has been stuck for two years on a waiting list for free food. With inflation inching up, Gurjar, a homemaker who lives in a slum in south Delhi, is struggling to afford the basics. Her husband, a gardener, is the only member of the family who collects a small salary.

“It’s getting difficult to survive,” Gurjar said.

Poorer parts of India are especially vulnerable. Take Jharkhand, a rural, forested state of about 40 million people. With one of the highest poverty rates in India, Jharkhand is a place where access to free food is a matter of survival, said Jean Dreze, a welfare economist and visiting professor at Ranchi University.

States are bound by law to use population figures specifically from the census to select beneficiaries for the food program. While India has national identity cards, they’re not designed to provide all the information required to run a welfare scheme.

“Postponing the census is quite catastrophic for the country,” said Dreze, who has worked on many of India’s food policies.

The food ministry didn’t respond to requests for comment.

Politics looms in the background. Dreze said the Modi government is likely delaying the census until 2027 because it can then use the new data to re-draw voting districts ahead of the next national election in 2029. That means opposition states might lose seats in Parliament.

Faced with inadequate financial support from the central government, some states have tried to fill funding gaps. Jharkhand, for example, offers its own food handouts, issuing around 2.3 million so-called green cards to families that need free grains, according to Uma Shankar Singh, the state’s food secretary. (Another 26 or so million people also benefit from the national program run by the Food Corporation of India.)

“Our government is committed to bearing the whole subsidy burden,” Singh said in an interview. “We won’t deprive anyone who is needy of free food.”

Yet millions of Indians are still left out in places that haven’t implemented local solutions. Some states have frozen new ration cards until they receive more funding from the federal government. And even in those that have safeguards, like Jharkhand, there’s no guarantee that the system will function.

Asmita Devi, 23, who lives in the village of Dumbi, said a broker keeps telling her that there’s no record of her ration card application, forcing her to buy food at full price in local bazaars.

It’s easy to slip through the cracks. Obtaining welfare benefits often involves navigating a bureaucratic maze. For example, most ration cards are awarded to households. When a woman marries in India, it’s sometimes difficult for her to obtain a card for her new family unless she deletes herself from the one attached to her parents. That’s a complicated process in some states.

Rohit Kumar, 24, a laborer at a brick kiln in Uttar Pradesh, India’s poorest and most populous state, is among those who don’t have access to the food program. He’s made multiple trips to the local authorities, who initially told him that the website to register for a ration card isn’t working. After inquiring further, Kumar learned that officials are being instructed not to issue new cards until some of the old ones are canceled. In his family of 12, only one person — his mother — receives free food.

“Nobody hears us or sees our misery,” he said. “If the government doesn’t help us, then who will?”

Corruption also plagues the program. Millions of beneficiaries are illiterate and live in remote areas, making it difficult to seek recourse when things go wrong.

It’s common for Indians to not receive their full entitlement because of dishonest shopkeepers who sell subsidized grain in the open market. On a recent visit to the village of Matlong, in Jharkhand, a ration shop worker told people he couldn’t give them grains for several days, despite taking their fingerprints. That’s a violation of India’s food security law, which promises immediate distribution.

A quarter or more of food rations — the equivalent of 20 million tons of rice and wheat — never reach intended recipients, according to a study released last November by the Indian Council for Research on International Economic Relations. Instead they’re diverted or even exported, despite still-persistent problems in India with hunger and malnourishment. (The food ministry has denied those findings.)

Even when rations do reach people, critics of India’s food program say the allotment — 5 kilograms of grains a month for each person — isn’t enough to survive on. Public health advocates want the distribution system to include more nutrient-rich foods like pulses.

Officials say the new census will fix some of these problems, though the path forward has plenty of potholes. Simply collecting the data in India, where more than half of its people live in rural areas, could take as long as a year.

Even so, Kishor Makwana, chairman of the National Commission for Scheduled Castes, said more delays won’t serve anybody. Gathering fresh figures is ultimately vital for India’s development, he said.

“It will strengthen social justice,” Makwana told the Press Trust of India, a local newswire. “Right now, benefits are being given based on estimates. Once we have numbers, proper policy interventions can be made.”