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While the methodology for the Household Consumption Expenditure Survey is more refined now, the survey needs to address some methodological challenges.

The National Sample Survey (NSS) Office released the key results of the Household Consumption Expenditure Survey (HCES) 2022-23 in late February. These primarily include all-India estimates of the average household monthly per capita consumption expenditure (MPCE) for rural and urban areas, its distribution bybroad item groups for food and non-food categories, the variation in the average MPCE of households with different standards of living (by appropriately grouping them into 12 ‘fractile classes’ of MPCE), and the trend in the composition of MPCE since the 1999-2000 survey (55th round of the NSS). So far as the State-level estimates are concerned, the factsheet gives only estimates of average MPCE — total of food and non-food items — for each State and Union Territory (UT) for rural and urban areas.

As the earlier available results pertain to 2011-12, the latest results have bridged the data vacuum of more than a decade on an important subject that also goes into the compilation of poverty estimates. While the methodology for the HCES is more refined now, there are still challenges that need to be addressed. This will ensure that apart from producing much firmer estimates of the average MPCE, the new series has an in-built mechanism to maintain comparability of the current estimates with those of the earlier ‘quinquennial series’ available from 1972-73 to 2011-12.

Changes and implications

One change in the new HCES is the updated item coverage, which has been done keeping in view the latest consumption behaviour.

Another significant change is the splitting of the single questionnaire into three parts covering food items, consumables and services items, and durable goods. The three questionnaires have been used at random in a selected household during three separate monthly visits contrary to the past when the team would visit a household just once.

Using the single questionnaire during one visit often resulted in long interviews. As a result, respondents were fatigued and there was a possibility of under-reporting consumption expenditure, particularly in respect of items like durable goods which were placed towards the end of the questionnaire. While the latest change will help us derive more reliable estimates of the average MPCE, we are also now unable to compare the current estimates of the average MPCE, and the share of poor that may be derived from it based on the survey data, with the estimates of the past, given the likelihood of under-reporting of household consumption expenditure in the previous surveys.

A third change is in the method of stratification of villages and urban blocks for the purpose of sampling. While in HCES 2011-12, every district was considered as a basic stratum for rural and urban areas, the new HCES considers a State/UT as the basic stratum. While every district with some minimum sample allocation got represented in both the rural and urban samples of the 2011-12 survey, the new HCES does not ensure the same. Such a change does not affect the generation of State-wise estimates.

There is also a change in stratification of households. All the households of a selected village/urban block are classified into three groups depending on a criterion. The criterion in rural areas is possession of land and in urban areas it is possession of four-wheeler cars for non-commercial use on the date of the survey. The total sample of 18 households with proportional representation from the three groups have been selected. Given that the proportion of urban households possessing four-wheelers is as low as 6% in States like Andhra Pradesh, Bihar and West Bengal as per the National Family Health Survey-5 (2019-21), adequate number of rich households in the sample may not get ensured in such States as intended. It is worthwhile to note that the said stratification in the HCES 2011-12 was based on the average MPCE of the households with the top 10%, middle 60% and bottom 30% forming the three strata, and a sample of two, four, and two households, respectively, was allotted to these strata.

Methodological issues

The splitting of the questionnaire and visiting a sample household thrice now have led to non-comparability of the current estimates with those of the past, although the current estimates appear to be much firmer ones. One way to address this issue is to replicate the traditional approach of ‘one schedule with a one-time visit to a household’ in an independent random sample of households to be drawn from the same villages and urban blocks of at least one of the panels for which the fieldwork is yet to commence. In this context, it is important to note that the sample in the new HCES for a year is in the form of 10 panels, each comprising consecutive three months, with an equal number of sample villages/urban blocks allotted to each panel. This add-on module will facilitate generation of two independent estimates of the average MPCE and other associated correlates based on the current approach vis-à-vis the earlier one. This information will be useful to study the extent of divergence between the two alternative estimates of MPCE and build a comparable series.

Further, to ensure adequate representation of rich households, it will be worthwhile to develop a frame of such households based on administrative data and a random sample of households drawn from this frame for enquiry on consumption expenditure of rich households through a dedicated survey. This database in conjunction with those from the HCES will be useful to derive an improved distribution of households by their average MPCE.

G.C. Manna is Professor at the Institute for Human Development (IHD), New Delhi, and a senior adviser at the National Council of Applied Economic Research. He was earlier the Director General of the Central Statistics office and the National Sample Survey Office and a member of the National Statistical Commission. Views are personal.

The aggregation of personal and financial data through fintech platforms presents an attractive target for hackers, leading to concerns over data privacy and security.

The digitalized payment landscape, while making transactions more efficient and cost-effective, has unintendedly heightened the risk of cyber frauds and personal data misuse. Cybercriminals exploit vulnerabilities in the system, engaging in phishing attacks, exploiting software flaws, or deceiving users into revealing sensitive information. The aggregation of personal and financial data through fintech platforms presents an attractive target for hackers, leading to concerns over data privacy and security.

Hacktivism, that combines “hacking” and “activism” to use hacking skills for promoting specified objectives, presents multifaceted challenges to India’s financial sector, notably through operational disruptions from denial-of-service attacks and website defacement, exposing data security vulnerabilities that could be exploited for cybercrime. These activities pose regulatory and compliance risks besides inflicting reputational damage, undermining customer trust and potentially leading to financial losses.

In the digitalized world, Application Programming Interfaces (APIs) are important elements of innovation, efficiency and seamless connectivity. These enables different software applications to communicate with each other, playing a crucial role in the functionality of the digital experiences of social media platforms like Facebook, Instagram, eCommerce platforms, YouTube, ChatGPT, etc.

The increasing reliance on APIs, however, has escalated the risk of cyber threats, highlighting the critical need for advanced security measures, including the financial sector. APIs are the unsung heroes of the digital age, enabling the rapid exchange of data and functionality across diverse platforms. In the financial sector, APIs have been instrumental in driving mobile commerce and the Internet of

Things (IoT), with Akamai estimating that APIs drive roughly 83% of internet traffic. The financial sector, a vital component of national infrastructure, has witnessed a surge in API-related cyberattacks.

Cybercriminals exploit vulnerabilities to access or corrupt sensitive data, posing significant risks to consumer trust and financial stability. This widespread adoption underscores the urgency for robust API security mechanisms to safeguard sensitive financial data and consumer privacy.

A proactive and well-coordinated cybersecurity posture, with an emphasis on resilience and collaboration with national cybersecurity bodies like CERT-In and specific financial sector organization, i.e., CSIRT-FIN to safeguard against the evolving threat landscape posed by hacktivism is thus essential.

CSIRT-Fin and CERT-In have been instrumental in protecting India’s financial sector through vigilant monitoring, advisories, and collaboration, yet the dynamic nature of cyber threats demands ongoing enhancements to their efforts. Besides, financial service providers and regulators have to allocate significant resources towards enhancing cybersecurity defences, including adopting advanced threat detection technologies, comprehensive employee training, and developing robust incident response strategies.

AI: A Game-Changer in API Security

Conventional security measures, while necessary, are increasingly insufficient against sophisticated cyber threats that target the business logic of APIs. AI-based security systems are a game-changer, as they are capable of analyzing vast amounts of data to identify patterns and detect anomalies that deviate from normal behavior and allows for the early detection of potential threats, including those that traditional security measures are likely to overlook.

Government, regulatory authorities, and financial service providers, including fintech companies alike are collectively seized with a significant shift towards prioritizing cybersecurity initiatives for investor protection, marking a departure from conventional challenges to embrace a new paradigm where digital security is at the forefront of strategic planning. With cybersecurity steering the course of investor protection, these initiatives will underscore the commitment to shield investors’ interests and assets in an increasingly digital financial realm.

The Digital Personal Data Protection (DPDP) Act, 2023 is all set to bolster consumer protection in the financial sector against malicious threats by enforcingvstrict data privacy regulations, including explicit consent for data collection, data minimization, and stringent security measures to safeguard personal data. It mandates timely breach notifications, ensuring consumers can act swiftly to secure their information.

The DPDP Act aims to create a more secure and privacy-conscious digital financial ecosystem, significantly reducing the risk of cyberattacks and data misuse. In addition, the adoption of AI and ML technologies offers a promising path forward as these technologies provide dynamic, intelligent systems capable of real-time monitoring and threat detection, ensuring that API security evolves in tandem with emerging threats.

Way Forward

It’s crucial for organizations to integrate advanced technologies like AI for real-time critical threat detection, foster stronger public-private partnerships to leverage private sector expertise, and conduct more frequent cybersecurity drills to identify and mitigate vulnerabilities.

Secondly, expanding awareness and training programmes can empower both organizations and consumers to navigate the digital landscape safely. Thirdly, modernizing the regulatory framework by financial sector regulators to reflect the latest cyber threats and ensuring compliance across the sector is the need of the hour.

Additionally, strengthening domestic as also international collaboration for sharing threat intelligence and best practices can provide a preemptive edge against globally coordinated attacks. By adopting these strategies, we can significantly improve the resilience of India’s financial sector against evolving cyber risks.

Thus, the future of financial security lies in leveraging AI to develop adaptive, intelligent systems that can anticipate and neutralize cyber threats. Updating the curriculum, more digital literacy awareness programmes, case-study based learning, addressing different target groups by class-oriented module structure can help address cybersecurity issues. The National Strategy for Financial Education (NSFE) needs to be revamped to orient towards handling the modern issues and complexities of financial world.

As digital financial services continue to underpin the fabric of financial sector today, ensuring their security against cyber threats has never been more important. Hence, there is an urgency of adopting AI-driven security measures by which the financial sector can navigate the complex cyber threat landscape with confidence, ensuring the integrity and resilience of its digital ecosystems, while simultaneously facilitating a robust and stable growth of the financial sector.

The author is a former official of the Indian Economic Service and IEPF Chair at National Council of Applied Economic Research, Views are personal.

Given the current and anticipated changes in dietary choices, livestock and fisheries present a distinct opportunity for growth. Both rural and urban populations’ consumption patterns are shifting, according to NSSO statistics. Based on the amount and pattern of consumer expenditure surveys (many rounds), data on monthly consumption expenditure per capita shows that spending on fish is rising more quickly than spending on other food items.

The consumption of fish provides energy, protein and a range of essential nutrients. Furthermore, fish has a particular role as a source of long-chain omega-3 fatty acids which are important for optimal brain and neural system development in children. Fish consumption also has health benefits for adults. It is an excellent source of many essential minerals such as iodine, selenium, zinc, iron, calcium, phosphorus and potassium, as well as vitamins such as A and D, and several vitamins from the B group. Therefore, it could be a valuable tool in the fight against food insecurity and malnutrition.

Even though there are numerous advantages for human health, the public is mostly unaware of the health benefits of fish and fish products. The NCAER household survey conducted in 24 states reveals that the awareness level is below the all-India average in 12 of the 24 states/UTs. The states with the lowest awareness levels include Andhra Pradesh (39.9%), Telangana (41.36%), Rajasthan (41.94%), and Chhattisgarh (23.94%). About 55% of people are aware of the high-quality protein found in fish when it comes to awareness categories. However, only 26% of people are aware that fish contains important amino acids, vitamins, and minerals in addition to omega-3 fatty acids.

As solutions for increasing fish consumption, almost all (98.1%) of the responding district officilas are in favour of undertaking mass awareness of the health benefits of fish. Hygiene is a great concern in a highly perishable product like fish. The general hygienic status of fish markets and the people associated with the supply chain network across India is not satisfactory. There is a lack of water connections, and physical cleanliness in markets, with unpleasant sights at every corner. Contamination of the aquatic ecosystem and unhygienic handling practices along the fish supply chain can lead to the supply of contaminated fish which will have serious consequences on public health. More than 80 per cent are in favour of constructing hygienic retail fish markets and fish kiosks at strategic locations. Capacity building training programmes (skill training, up-skilling and re-skilling) may be imparted to farmers, fishers, traders and all other stakeholders on the development of skill sets related to hygienic postharvest handling and transportation of fish, adoption of improved sanitary and good handling practices, and other specialized skill sets.

Regular advertisements explaining the benefits of eating fish could be very useful. For example,the American Heart Association recommends eating fish at least two times per week as part of a healthy diet. Attractive advertisements like eating fish everyday help prevent heart diseases, contain hair fall, help rejuvenate skin and immunity, etc. The government should advertise through social media platforms such as Twitter and Facebook to create awareness. The electronic media is now very useful. Fish dishes with recipes should be explained in the media advertisement. At the same time, the media should explain the benefits of fish eating.

As discussed, fishes are perceived as a healthy food containing high levels of digestible protein, with cholesterol-lowering capability. Increasing awareness of fish as a food associated with health and wellness is expected to create a positive impact on its consumption in the coming years. To make this successful, awareness campaigns and consumer education are needed, even though these alone may not be sufficient. Factors like culture, taste, affordability, lifestyle, convenience, etc., play a critical role. Empowering and involving women, individually and in groups, with suitable policy supports, can lead to positive outcomes for them, as well as the fisheries sector in general.

Laxmi Joshi is Fellow and Saurabh Bandyopadhyay is Senior Fellow, at NCAER. Views are personal.

There are no win-win options here as all of them involve trade-offs. Policy makers must strike a balance.

A universal social security system is perhaps the best option to protect gig workers.

The Code on Social Security, 2020 defines gig worker as a “person who performs work or participates in a work arrangement and earns from such activities outside of a traditional employer-employee relationship”.

The NITI Aayog report states that “gig workers can be broadly classified into platform and non-platform-based workers. Non-platform gig workers are generally casual wage workers and own-account workers in the conventional sectors, working part-time or full-time.”

The platform worker has the following characteristics — task/deliverables-based contract between the service provider and the online intermediary (platform); the contract is market/transactions based with costs of transaction failure risks to the intermediaries and; the exact nature of the service provided and price for the service are pre-determined.

Platform work makes the work formal while the worker remains informal. In non-platform gig work, both work and the worker remain informal.

The second-best solution is a system that is designed for platform workers only, as a first step, with the justification that platform workers work longer hours than an average casual wage worker, while the incomes are comparable or marginally higher (NCAER Report 2023).

For some platform workers (especially in delivery services), the risk of having accidents is higher.

Two options

Here we propose two alternative options for platform workers while they are on a platform job either on a long-shift or short-shift basis.

There are essentially three questions — what to finance, for whom to finance and how to finance.

The ‘whom to finance’ is very clear — the social welfare system is designed only for platform workers while they are actively employed on platforms. One could potentially give them a buffer for three months. After that they lose their social cover. This poses a challenge and the only way to overcome that is to create a universal social welfare system.

On the question of what to finance, it could be full health insurance for the worker and their family and pensions, only for the time that they are “active” in platforms and three months thereafter to give them a buffer. A board for social welfare can be formed.

How to finance this scheme? One option is a Rajasthan type of framework, where the funds are derived from each transaction. The trade-off is the ease of doing business may be affected, which in turn may lead to creation of less jobs in this sector.

The other option is a share of the domestic annual turnover of the platform company which is employing platform workers earmarked for this (i.e. is dealing with platform delivery).

Again, it is hard to determine the annual turnover, and the share that is catering to platform workers.

Alternatively, the platform companies directly provide workers with social welfare benefits. Platform companies pay the premium directly to health insurance firms, insuring all platform workers. Their families should get full health insurance. Micro insurance products could be designed. Life insurance scheme for the worker is also important.

The platforms should ensure that the workers earn minimum wages prevailing in the city/State. The minimum wage is equivalent to the net wage that a platform worker earns and not gross wages (i.e. wages as defined by the State/city gross income minus costs including fuel, car insurance and maintenance etc).

Platform workers can receive additional benefits from the government.

The policymaker has to walk a fine line between creating jobs and providing workers social protection. One should not create such a high burden on platform companies that they exit.

A universal approach to providing social welfare benefits is better than piecemeal approach.

Bhandari is a Professor and Sahu is an Associate Fellow at NCAER. Views expressed are personal.