June 24, 2024, 11:56 am

Why per capita income vital to common people?

  • Update Time : Friday, May 24, 2024
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Photo: Collected

TDS Desk:

Inflation has been consistently hovering around 10% in Bangladesh for the past two years. At the same time, the prices of staple food items have increased. However, the latest data of the Bangladesh Bureau of Statistics (BBS) note that per capita income in Bangladesh stands at $2,784 in the current fiscal year, which is $35 higher than in the previous fiscal year.

According to BBS, per capita income has been around $2,700 for the past three years. But economists have different views on the matter. Many describe government accounts of per capita income as “paper accounts”. They say such information is unimportant to the people.

In this context, former Bangladesh Bank governor Dr Salehuddin Ahmed said: “The calculation made by BBS on per capita income is not acceptable to common people because the income of common people has not increased over the years. It is not only the common people, the real income of the country—as a whole—has not increased.”

He said: “The dollar rate now stands at over Tk120, but BBS has calculated the rate at Tk109. For this reason, the per capita income has increased (on paper).”

Salehuddin Ahmed also said: “Illegal and black money owners and money launderers may have increased their income. But the real income of the country has not increased.”

Zayed Bakht, a researcher at the Bangladesh Institute of Development Studies (BIDS) and Chairman of Agrani Bank, also spoke to this reporter.

He said: “Inflation has not been taken into account in this calculation by BBS. The real income would have been understood if inflation had been taken into account. If the value of the dollar had been fixed at Tk117 or Tk120, the per capita income would have decreased instead.”

BBS for this calculation used an exchange rate of Tk109.97 per dollar. At the end of the 2022-23 fiscal year, per capita income was $2,749, or Tk2,73,360, and it has now increased to Tk3,06,144. Therefore, the income of the people has increased by $35 in one year and now stands at $2,784. Moreover, this is the first time that average annual income per capita has exceeded Tk3,00,000.

Meanwhile, gross national income is calculated by including income from remittances along with income within the country. This is calculated by dividing income by the total population or per capita.

Dr Ahsan H Mansoor, executive director of the Policy Research Institute (PRI), said: “The income of poor people has not increased; on the contrary, it has decreased.”

He said: “The share of the poor in the national income has decreased. The economic condition is bad; the poor people have less opportunity to increase their income now.”

According to a World Food Program (WFP) report, the per capita food consumption of poor people in Bangladesh has increased by 58%. According to the Khana survey, in 2022, the cost of buying food for people below the poverty line in the country was Tk1,851 per person per month. Last February, the cost of buying food increased to Tk2,923—which is 58% more than two years ago.

Another WFP report said 17% of Bangladeshis were food insecure in February 2024—a 2% increase from the month before. Moreover, 68% of people in the country are trying to survive by reducing the cost of living. And 43% are buying food on credit. Additionally, 22% have cut down on health and medical expenses, and 13% are now spending from their savings. Only 21% of food-insecure people are receiving external assistance, the report said.

All government and private accounts say that inflation has remained consistently around 10% for the past two years. The prices of chicken, eggs, fish and vegetables, rice, and flour are on the rise. The prices of potatoes, onions, ginger, green chilies, and fruits have also increased.

According to BBS, overall inflation in the country has been around 9.5% for the past 14 months. In April, the price inflation of food products was 10.22%. In the month before, this rate was 9.87%. Food price inflation was 10.76% in November last year. Due to inflation, the poor and lower middle classes have to cut back on nutrition, health, and education, experts said.

As stated by BBS, there has not been much progress in per capita income since the pandemic, if it is calculated based on the dollar rate. However, per capita income has doubled in the last 10 years.

The national statistics agency said that per capita income in 2013-14 was $1,316. In the fiscal year 2021-22 it was $2,793. The following year, it dropped to $2,749. In the current year, it has again increased to $2,784.

 

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