Dr. Rajesh Shukla

For a consumer demand-driven economy such as India, understanding consumption patterns is key to predicting economic growth. In recent years, the linkages between slow economic growth, high inflation and consumer demand have been more than evident. While demand for products can be measured in both volume and value terms, it is difficult to quantify demand for public goods and services such as education, health, etc. So as to understand consumer demand across the entire spectrum of consumption categories, the value of spending emerges as a more reliable measure. Indian households have a large and diverse consumption basket, and high income inequality and regional diversity makes the exercise of analysing consumption behaviour even more complex. In an ever-changing socio-economic environment, there is a need to understand the current dynamics of the Indian consumer market to be able to reliably predict future consumption patterns.

India ranks as the sixth largest food market in the world, pegged at an estimated R12.2 lakh crore in FY2015. It is expected to grow to R16.6 lakh crore over the years and further expand to R21.8 lakh crore by FY26 at 2014-15 prices. We are also the largest global consumers of dairy products, pulses, sugar and spices. Indians spend more on food than any other consumption category and this is expected to continue. Overall, the food market grew at 4.2% per annum in real terms during the last decade, which was slightly higher than the pace of growth observed during the decade earlier (3% per annum). Urban India has registered a relatively higher growth (5.6%) as compared to rural (3.4%). In fact, between FY15 and FY21, the country’s food market is expected to register an average annual growth rate of 5.3% per annum, and will grow a tad faster at 5.7% per annum between FY21 and FY26.

The United Nations has declared 2016 as the International Year of Pulses (IYOP) in a bid to increase public awareness of the nutritional benefits of pulses. The effort is to encourage connections throughout the food chain, better utilise pulses-based proteins, give a boost to production of pulses and crop rotation and address challenges in the pulses trade. From an Indian perspective, this offers policy-makers a ready-made opportunity to focus on Indian food security issues and address the challenges related to price inflation and declining production of pulses through a series of long- and short-term measures.

Two and a half decades ago, India’s policy makers embarked on a journey that would lead the country towards economic liberalisation and development in the belief that it would offer better opportunities for every family to grow its income and lead more prosperous and fulfilled lives. While the outcomes of that decision have been measured by economists in terms of GDP growth, there have been few efforts to look at the impact on Indian households in terms of well-being. Though consistent and reliable time-series data is difficult to come by, the ICE 360o Study has been able to mine comparable data over the FY05 to FY14 period (nearly a decade). Let’s consider some of the findings to see how the economic development story has panned out for households at different rungs of the socio-economic ladder.

In the not too distant past, India’s large population was considered to be a huge barrier to prosperity and progress. Those were the days when economists predicted that India was a “population bomb” waiting to explode. In the post-liberalisation era, with China showing the way and proving that a massive population can be harnessed for societal and economic progress, a new mantra is being chanted—demographic dividend. Ever since, India’s huge opportunity in terms of demographic dividend is being trumpeted by policy-makers, economists and the media with much gusto. This extreme swing in perspectives, however, masks the real issue. One that The Economist so succinctly brought to the fore in a 2013 article when it wrote: “Many are worried that India is squandering this demographic opportunity … India has created too few formal jobs in the past decade. India’s leaders have long said they are committed to employment but have shown little stomach for the economic upheaval rapid job creation entails.”

Over the last two decades, policy-makers have put a lot of emphasis on growing literacy levels and promoting primary education through schemes such as the Sarva Shiksha Abhiyan. This has had a huge impact on household spending on education, which has increased significantly. India’s education market is estimated to be R1,71,078 crore (at current prices) and education is one area that has witnessed one of the fastest growth rates among different expenditure heads of Indian households. While the overall consumer market grew at 6% per annum in real terms during the last decade, spending on education went up by 9% per annum. The sector had experienced an even higher growth of 11% per annum between FY94 and FY05. Both rural and urban areas registered similar growth in spending. The education market is expected to reach a size of R2,86,074 crore in FY21 (at 2014-15 prices) and further grow to R4,37,538 crore in a decade from now (FY26). Urban India is expected to contribute almost two-thirds to the total spend on education in FY21.

The slogan for policy-makers this year should be Debate, Decide, Do and Deliver.
From a social scientist’s point of view, understanding the body politic of Indian populace and the roots of societal and economic changes could be extremely interesting and analytically rewarding. From a policy-maker’s perspective, the actionable research output could help develop targeted policies to unleash the growth potential. Banks and financial institutions need to know and evaluate need-based credit-worthiness of diverse consumer segments and how best they can harness their finances. In our quest to market top-end luxuries to the “rich” and to search for fortune at the “bottom of the pyramid”, corporate houses often end up sidestepping the class that lies sandwiched between the rich and the poor, i.e. “middle tier”, and need to better understand what products and services can cater to the demands of this group.

Despite the constraints, it is not impossible to collect reliable data on income, expenditure and savings.
In recent times, there has been an increase in public expenditure, with an eye on driving jobs, employment and overall economic growth. From that perspective alone, a consistently high rate of household savings not only enables a country to fund creation of public assets, but also facilitates overall debt financing. An effective strategy would aim at not only optimising savings, but also at channelising available savings into productive and socially-desirable investments.

The Indian economy has come a long way, with the country’s GDP crossing the $2 trillion mark in 2014. While it took us 60 years to hit the $1 trillion figure, we added the next trillion in just seven years.
The Indian economy has come a long way, with the country’s GDP crossing the $2 trillion mark in 2014. While it took us 60 years to hit the $1 trillion figure, we added the next trillion in just seven years. According to IMF’s predictions, we are all set to cross the milestone of $3 trillion by 2019. In income terms, even though the bulk of this growth has been driven by the rich households (top 20%), the bottom 40% has also enjoyed an 8%-plus CAGR between 2004-05 and 2013-14. However, the road to inclusive growth continues to be a long and hard one. Inclusive growth goes far beyond monetary income and encapsulates equity, stability, respect for diversity, equality of opportunity, and participation in the development process; we still score poorly on many of these measures.

The challenge for policy-makers is to develop a holistic approach that is flexible enough to accommodate the specific needs of different districts.
As economic growth has cut a slow but steady swathe across India, the impact has been felt all over. What has been heartening is the rise of the so-called laggard—or BIMAROU—states and their contribution to the growth story. The GSDP contribution of BIMAROU states to incremental GDP is expected to increase to 27% during 2011-20, as against 19% during the previous decade (2001-10). States such as Madhya Pradesh, Gujarat and Bihar are today among the fastest growing. The reasons for the changing status of these states, which have traditionally ranked at the bottom across all indicators of human and economic development, are not hard to find. Focus on infrastructure development, better governance, efforts to improve access to education and healthcare have all contributed to their growth. But the impact of this is felt in varying degrees across different socio-economic groups. The hard fact is that benefits of development are rarely distributed across all states evenly, or within different districts in the same states. Several factors are responsible, ranging from governance issues to the legacy of past policies and uneven manner in which present policies are implemented.

The process of revitalising agriculture has begun. Now we must take action in a way that yields measurable outcomes and creates a virtuous cycle of demand, growth and prosperity.
Rural India has been gifted a big bonanza in the Budget. With the spotlight on rural infrastructure and the distressed agriculture sector, the announcements have gladdened the hearts of economists cutting across political affiliations. Schemes for crop insurance and irrigation as well as allocations to boost organic farming and pulses production are welcome. Efforts initiated to help farmers get remunerative prices for their produce through the creation of an online national agriculture marketplace would go a long way in strengthening rural economy.

Mobility enabled by two-wheelers has a significant relationship with income inequalities.
Poverty alleviation policies have undergone much iterations in post-Independence India. In the past 10 years, MGNREGA has been the primary focus of successive governments, with huge allocations in a bid to provide 100 days of guaranteed employment to the poorest rural households in the country. The jury is still out on the success of the programme—its critics believe that it is a massive waste of national resources and is nothing but a dole for digging holes while its supporters cite that a record 18.2 million works have been completed and a wide variety of rural assets are being created across several states in the country.

Uttar Pradesh and Rajasthan, with a large population, are pulling down other north Indian states in terms of the general well-being status of households.
There has been a subtle shift in the manner in which state governments have been conducting their business. Apart from Centre-driven reforms, states have adopted a competitive approach in a bid to attract capital, labour and technology, and thereby improve not just their development rankings, but also their electoral prospects. The focus on improving infrastructure has led to a positive impact on industrialisation and services sector for many states, and some like Bihar and Madhya Pradesh have made huge strides in terms of bettering their ranking across several development indicators. However, what has been the impact of this on the overall well-being of households? And how do they fare in terms of earning, spending and saving; basic amenities (bijli, paani, sadak aur shauchalaya); asset ownership (wealth); social, political and financial inclusion; and more importantly the financial optimisms and quality of life?

In Indian context, two-wheeler is less of an automobile and more of an enabler which creates a virtuous cycle of increased mobility towards generating better livelihood.
Material well-being is often an important signifier of a person’s or a family unit’s financial status. From a research point of view, however, collecting reliable income data is a challenge. To mitigate the difficulties in accessing income related household information, researchers are increasingly relying on asset ownership data to understand facets of household well-being, income inequality and poverty. The World Bank’s Living Standards Measurement Survey, for instance, tries to evaluate poverty levels through asset ownership data in the absence of reliable household income figures. Even so, it is not always easy to gain insights into household well-being based on comparisons of ownership of assets. For instance, how do you compare a household that has a radio and a tin-roof house with one that has a bicycle and a cow? Perhaps, common sense might lead us to infer that the second household is likely to earn more income by selling milk and therefore might be financially in a better position.

Income, expenditure and saving-related indicators, when taken together, provide holistic insights into levels of household well-being.
The most important monetary measures of well-being, among others, are household income, expenditure and saving. Yet we have very little reliable data on such indicators. In view of this, ICE 360° surveys have been instrumental in building and disseminating high-quality, interconnected, reliable and up-to-date data to capture the ground realities of households, on how the country earns, spends, saves, lives, thinks, accesses public goods, and on inclusion, employment and infrastructure. We have attempted to understand dimensions of well-being using income, consumption and saving as composite indicators available from ICE 360° surveys, 2014.

For every percentage point of GDP growth, there will be a spike in demand for consumer goods and services which, in turn, will boost investment, and the benefits of these will be felt across all sections of the income pyramid.
The continued slowdown in the Indian economy has caused much concern among a broad swathe of players, including economists, policy-makers, the corporate sector and consumers. This has led many to question if it is even possible to accomplish the 8% GDP growth that is widely quoted. While the government has indeed initiated reforms across multiple sectors and has aggressively increased public spending on infrastructure in order to kick-start the sluggish economy, the impact of these measures will be felt only in the long term. In the short term, however, they do signal the government’s efforts to propel growth and create an enabling economic environment.

While the government has announced a number of big impact schemes, the focus should now be on creating linkages between various departments and roping in stakeholders with different types of expertise. The UN, in its 2015 report on India's performance on Millennium Development Goals (MDGs), has pointed out, "much of the achievement of the MDGs has depended upon availability of infrastructure support; as without roads and public transport children cannot go to school and expecting mothers cannot reach health centres; and learning at home and in school, health services at health centres are all hampered without electricity. Better rural infrastructure-such as farm to market roads, storage facilities, market infrastructure, and irrigation-also increases rural productivity and incomes and thereby assists in reducing rural poverty." The government has made significant strides in providing electricity and roads, particularly in rural India. According to the latest official figures, during its two years in office, the government has brought electricity to 7,654 villages compared with 5,189 villages in the preceding three years. Similarly, 36,340 and 36,450 kilometres of rural roads have been added during FY15 and FY16, respectively, whereas construction of rural roads in FY13 and FY14, respectively, was 24,160 and 25,320 kilometres. This leap in infrastructure growth is expected to have a huge impact on job creation. One of the biggest challenges that India faces today is that jobs are not being created fast enough to accommodate the rapidly multiplying population. While the growing ranks of unemployed youth are pushing them to the cities in search of decent employment, this in turn is putting more pressure on already severely stressed urban infrastructure. Lack of employment opportunities is also resulting in lumpenisation of youth with many turning to criminal activities as witnessed in Bihar, UP and West Bengal. On the other hand, lack of employment opportunities has also led to greater demand for reservation of jobs even among the not-so-underprivileged sections of the society. The Jat trouble in Haryana and the Patidar unrest in Gujarat are only tips of the proverbial iceberg. Some experts have opined that the combination of a growing work force and stagnation of jobs is a potential 'ticking bomb' that could wipe out all the positive outcomes of economic growth and development. For the connect between improved roads, more electrified villages and increased employment opportunities to happen, interventions are needed at multiple levels. Take, for instance, the occupational profile of rural India. The developed rural settlements-many of which are located in close proximity to urban centres-have the highest proportion of salaried households (25.1%) compared to emerging rural (12.6%) and underdeveloped rural (8.8%). In contrast, the underdeveloped rural areas have the largest proportion of households that depend on manual labour (45.8%) as against those in emerging rural (35.4%) and developed rural (21%).

Few employment generation programmes have created as much buzz as the National Rural Employment Guarantee Scheme. The scheme is aimed at benefiting BPL households in rural India by enabling at least one member of such households to find guaranteed employment as unskilled labour for at least 100 days in a year. What is special about this scheme is that it has built in some measure of transparency and accountability into its functioning.

The automobile industry has witnessed a healthy growth during the past five years. The passenger car market has grown at an annual rate of 20% between 2001-02 and 2006-07 while the pre-owned cars segment has seen an even higher growth rate of 28% during the same period.
Each of these markets is estimated to add nearly 1.2-1.3 million cars every year. But November 2008 virtually brought the entire sector to a grinding halt.

India's demographic dividend is a phenomenon that contributes to the growth of our nation. The age of the chief earner is an important factor that determines household earning, spending and patterns and per-capita income levels. There is, however, a paradox: although, the country's demographic profile is getting younger, it is the older age group that earn more. Saving patterns too show a marked difference across age groups.

Three out of every four youth in the country is literate. Rural India accounts for around two-third of all 333-million literate youth. One in three literate youth in India is a student, around a fifth are doing unpaid housework, and just over one in ten have a regular salaried job or are wage earners. Television reaches 259-million and newspapers 177-million. FE presents s peek into the first-ever readership survey of literate Indian youth commissioned by National Book Trust and conducted by National Council of Applied Economic Research team led by Senior Fellow Rajesh Shukla. The survey, conducted in November-December 2009, covered a sample of 659,569 individuals, including 311,431 literate youth (13-35 year olds), across 207 districts for rural and 199 towns for urban India.

How does GDP growth translate into economic prosperity for households? Governance and inclusive growth are the two key terms that are finding more and more emphasis among policymakers today. State governments are beginning to realise that better governance cannot only determine their political fortunes but also has an impact on the economic well-being of their citizens.

Women graduates get a salary a fourth less than what men do and a third don't even get to work. If India's ranking on the human development index remains relatively poor (India was ranked 134th out of 182 countries in 2007), its ranking on the gender development index isn't any better (114th out of 155 countries). Look at most indicators and you'd know why this is so. According to the World Bank, female literacy rate in India is around 77 per cent versus 87 per cent for males; less than half the births are attended to by skilled health staff; a fourth of pregnant women don't receive pre-natal care; 84 per cent of men in the 15-64 age group work as compared to 36 per cent for women, the list goes on. Whether the Women's Reservation Bill which plans to reserve a third of seats for women in Parliament will solve this is an open question, as, of course, the question of how political parties will find enough women to "man" these seats (just 9 per cent of seats in Parliament are held by women according to the World Bank's World Development Indicators). The purpose of this article, however, is limited to seeing how women fare in India's job market and to link this with the levels of education they have. The source of data is the latest countrywide National Survey of Household Income and Expenditure (NSHIE, 2004-05) conducted by the National Council of Applied Economic Research (NCAER). The results are shocking in several ways. Though women account for around Rajesh Shukla: Children of a lesser god Women graduates get a salary a fourth less than what men do and a third don't even get to work Rajesh Shukla /

The Indian economy is growing from strength to strength. The fast-paced economic growth is bringing about a change in the country's socio-economic fabric. It is not uncommon to see Indian households spend beyond their earning capacities. Easy availability of loans, increasing popularity of credit cards and rising consumerism are putting an increasing number of Indian households under the risk of being financially vulnerable. Social security is virtually is non-existent in India and since financial security is largely the responsibility of each household, there is an urgent need to create awareness about financial protection.

Last week, we met Mrs Soma Mukherjee in rural Bengal. She lives in a two-room home with her six-year-old daughter, her mother-in-law and her husband, who works as a mason. Her daughter goes to the school nearby. Her house has basic furniture, a colour TV, a DVD player and represents what we would call Middle India. Mrs Mukherjee's household expenditure has spiralled out of control in recent months. As a result, she has cut back on eggs, has switched to a coarser rice that costs less, consumes less cooking oil, uses the same washing powder for utensils that she washes her clothes with and has stopped using the cosmetic cream that she loves. Despite these sacrifices, she is unable to save any money. Take a look at the data. NCAER-CMCR has divided the country into five income quintiles based on the National Survey of Household Income and Expenditure. The top quintile (20% or about 45 million households) accounts for almost 52% of aggregate income and 39% of consumption. However, they account for an even larger 45% of aggregate non-food consumption. This is the upper class that has driven a bulk of the incremental consumption in India. They have adopted a whole set of new categories and their consumption baskets have widened dramatically. This set of consumers epitomises the surging confidence of India having arrived. Considering that this quintile contributes almost 93% of aggregate savings, food inflation will have no impact on it. Then there are the bottom two quintiles (40% or 90 million households) that account for 14% of income and 22% of consumption. Their share of food consumption is 26% and non-food consumption 17%. They spend a bulk of their income on food (63) and buy the bare necessities in terms of non-food items. Given their massive spend on food, these are households that are being squeezed with inflation. They are being forced to make even greater sacrifices than they are normally used to. However, there is no impact on their savings since these households did not save money anyway. The most transformative impact, however, is felt by households like Mrs Mukherjee's. These are households that fall in the middle two quintiles (40% or 90 million households). These households account for almost 34% of aggregate income and 39% of aggregate consumption. They spend about 54% of their income on food and about 5-7 % each on housing, education, clothing, durables, health, transport and other nonfood items. Their spend on food has now spiralled up to 65-67 % of their income. To cope with this, they are the ones that are likely to cut back consumption where possible, buy cheaper products given alternatives, postpone the purchase of little indulgences and cut out discretionary spend altogether. With food sucking up more of their incomes their saving is likely to disappear altogether. What happens to Middle India will affect the Indian consumption story. Many categories that form a part of routine consumption could see a slowdown in growths. Equally, there could be downtrading with consumers buying cheaper products as they seek to cope. However, what is even more significant is the impact on consumer confidence. After all, the Indian consumption story is not just based on what happens today but the confidence and the hope of a better tomorrow. Middle India today accounts for only 15% of aggregate household savings. With burgeoning spend on food, savings will evaporate. Tragically, this drop in savings will be invisible at the aggregate level given the relatively low contribution of this consumer class to overall household savings.

The controversy over the role of microfinance institutions (MFIs) refuses to die down. While one side believes MFIs are ripping off customers and adding to indebtedness of households, which has resulted in higher suicide levels, the other side presents equally compelling arguments. It points to how MFIs are saving rural folk from moneylenders, how their interest rates are lower than moneylenders, how they're more convenient for borrowers, and so on. While the political class, especially in Andhra Pradesh where MFIs have their largest business, have come down against MFIs, even the Malegam Committee of RBI has seen some merit in the arguments-yet it has put many curbs on how MFIs are to function, on the interest rates they can charge, and so on. While the importance of microfinance in consumption-smoothening should not be underestimated, it has a larger impact when the loans are given for productive assets. Evidence from Bangladesh and Indonesia indicates that high-quality, dependable, receptive and long-term oriented MFIs for the poor can go a long way in improving access to finance (Morduch and Rutherford, 2003). Recent studies have also pointed to the crucial role that can be played by MFIs by providing composite services; given the wide array of financial transactions that typify the financial life of the poor. In December 2010, NCAER Centre for Macro Consumer Research (NCAER-CMCR) undertook a cluster-based household survey to assess the effectiveness of small borrowing. The survey was undertaken in five clusters, namely Hyderabad, Chennai, Kolkata, Jaipur and Lucknow. From each of these locations, a sample of 2,000 households (70% rural and 30% urban) were surveyed. Preliminary findings reveal that the average amount applied for was the lowest in the case of MFIs (a typical MFI loan was for an amount that was around a fourth that was applied for from formal sources). If one compares the gap between the loan amount applied for and the amount approved, or the amount approved and that actually received, MFIs scored much better than their formal counterparts. The processing time is substantially higher in the case of commercial banks when compared to MFIs. The interest rate cited by respondents for commercial banks are lower; however, there are typically "unofficial" charges associated with loans that are also higher in the case of the formal sector. Bank loans are typically four times higher than for MFIs and around 0.9% of the loan amount has to be given as a bribe-the bribe amount is around a third of this in the case of MFIs. Borrowers are also more likely to get the amounts they apply for in the case of MFIs than in the case of banks. Development of financial systems, by creating favourable conditions, is a necessary but not sufficient condition for economic growth (Rajan and Zingales, 1998 and 2003, and Aghion and Hewitt, 1998 and 2005). Financial exclusion, on the other hand, by leaving vast sections of society out of the scope of formal institutions, imposes costs on society. The survey revealed that the vast majority of India's rural poor still did not have access to formal finance. Rural banks catered primarily to the richer rural borrowers, while the rural poor faced severe difficulties in accessing savings and credit from the formal sector. Roughly 87% of the poorest households surveyed (marginal farmers) did not have access to credit, while 71% did not have access to savings from a formal source. This lack of access to formal sources, especially when trying to meet unforeseen expenditure, led to a heavy reliance on informal finance, which comprised mostly moneylenders and shopkeepers. Forty-four per cent of the households surveyed reported having borrowed informally at least once in the preceding 12 months with the interest charged on such informal loans averaging 48% per year.

Amartya Sen‘s stinging criticism of the government‘s obsession with faster (unbalanced in his view) growth, has triggered a fierce debate. Labelling it as ‗stupid‘, Sen argues that instead of focusing on double digit growth, which he believes will take care of itself, policymakers should focus on allocating more funds towards health and education. On the other hand Professor Jagdish Bhagwati and Arvind Pagariya disapprove of Sen‘s analysis stating that high growth has not only provided gainful employment but has also provided the government with revenues for funding the desired social programmes. Martin Wolf adds to that by saying, that higher incomes are a necessary condition for better state funded programmes aimed at poverty alleviation. This debate is part of a larger one raging in India‘s academic corridors, where sharp differences of opinions exist about not only the actual poverty estimates in India but also about the level of inequality.

The current state of tenancy laws and the absence of properly documented land records inhibit all attempts to resuscitate the agricultural sector.
Sustainable farming is farming “as if people matter.” Existing agricultural systems reflect the traditional economic mentality that the only way to benefit people as consumers is to give them “more inexpensive stuff,” and the only way to benefit people as workers is to give them an opportunity to earn more money. The traditional economic thinking treats people as if they were consuming and producing machines, not living beings with hearts and souls. Agriculture as a way of life, as a lifestyle or as a moral act is treated with disregard by economists—a “demonstrative” thing that has no relevance to real economics.

7th Pay Commission: Urban households are likely to absorb 64% of the increased amount which will come from the Seventh Pay Commission award, while rural households will get only 36%.
The decision of the government to implement the recommendations of the Seventh Pay Commission and announce a hike of 23.5% in salaries and pensions of government employees has brought much cheer. The reactions have been swift, with the Sensex gaining 475 points and industry welcoming the move. It is expected to trigger a spurt in consumer demand, particularly in urban areas, and provide a fillip to sluggish economic recovery. Media reports confirm that the government will be spending an additional R1.02 lakh crore annually.

India is fast emerging as a knowledge economy. The first India Science Report found a 367-million-strong workforce , of which 40.2 million (11%) could be classified as human resource in science and technology because of their qualification (HRSTE) and 26.8 million (7.3%) because
of their occupation (HRSTO). The overlap between these categories is called core HRST, which amounted to 14.2 million (3.9%) of the workforce. The number of HRSTE has grown by 9.2% annually between 1991 and 2004, and was six million in 1981 and 12.8 in the 1991 census.

How does GDP growth translate into economic properity for household? Governance and inclusive growth are the two key terms that are finding more and more emphasis among policy makers today. State governments are beginning to realise that better governance cannot only determine their political fortunes but also has an impact on the economic well- being of their citizens.

The automobile industry has witnessed a healthy growth during the past five years. The passenger car market has grown at an annual rate of 20% between 2001-02 and 2006-07 while the pre-owned cars segment has seen an even higher growth rate of 28% during the same period. Each of these markets is estimated to add nearly 1.2-1.3 million cars every year. But November 2008 virtually brought the entire sector to a grinding halt.

Even as the ongoing global economic slump hogs the media limelight, there are stirrings of an epochal change in rural India, home to about two-thirds of the country’s 114.5 crore population. The traditional view that India’s rural economy is largely agrarian is about to take a beating with a dramatic fall in the share of agriculture in rural GDP, the value of goods and services produced in rural areas. According to an analysis done for ET by Rajesh Shukla, senior fellow at the National Council of Applied Economic Research (NCAER), the combined share of industry and services in rural GDP has risen to 58.4% in the current fiscal from 48.6% in 1999-2000 on the back of strong growth in these sectors in the past five years while the share of agriculture slipped to 41.6%.

The Indian economy has ushered in a new era, wherein the country's per capita income growth in recent years has outperformed that of the other major Asian economies. However, the gains of prosperity have been distributed unevenly. The paradox of plenty amid poverty ceases to lift.

Drought raises the possibility of rising food prices and a negative impact on rural consumer demand. However, a point needs to be appreciated here. When we talk rural, we are not talking just agriculture . Agriculture based enterprises employ nearly a fifth of the non- farm rural workforce.

Come election time and Indian politicians start outdoing one another in a bid to woo the aam aadmi. Election manifestos are targeted at improving the lot of the millions of deprived and below-the-poverty line voters who form a huge chunk of the Indian electorate. However, the fact
remains that in economic terms, the drivers of prosperity and growth of any nation are its middle class.

The central motivation for this paper is quite simple: any idea, howsoever good, is ultimately only as good as its implementation. As a result, the extent to which adoption of the TSA framework can actually succeed in its central objective-credible estimates of the tourism sector that can be internationally comparable-will depend critically on the way the TSA is implemented across all countries of the world. As in any statistical enterprise, there is many a proverbial slip between the cup and the lip. Thus, it is our firm belief that having evolved a consensus on the conceptual framework, a critical next step lies in implementation, in ensuring the most reliable generation of data that reflect the concepts underlying TSA. Our focus is on two central albeit interrelated questions. First, how should data on domestic tourism be generated? This is a difficult question even in the context of OECD economies, but more so in developing countries with different institutional infrastructure and resource constraints. Second, we also seek to address the issue of credibility: in a sense the raison de etré of the TSA framework. More specifically, we seek to evaluate based on the Indian experience different possible models of an inter-institutional platform that can contribute to enhancing credibility of the TSA in a developing country context.

Most developed economies with high degrees of financial inclusion are characterized by low usage of cash as a medium of exchange. Higher
income and education levels, allows for households to use alternative mediums of exchange other than cash. In these economies, plastic money (credit, debit and prepaid cards) and other mediums of exchange such as online transfers are widely used as mediums of exchange. Greater usage of these alternative mediums of exchange, not only
reduces the costs associated with transacting in cash, but significantly reduces the opportunity costs associated with the traditional forms of banking. On the other hand, most developing and underdeveloped economies are characterized by low levels of financial inclusion. This limited penetration of the formal financial system in turn implies limited scope of shifting to alternate forms of payment. In such countries, where a large section of society is excluded from the formal financial system, cash serves as the principal medium of exchange. Although, the rapid
dissemination of technology platforms over the past decades has  significantly aided in a movement away from cash, it is primarily limited to a particular section of highly educated, higher income earning sections of society.

In th is pape r, th e auth ors anal yse th e tre nds in pove rty and ineq ual ity from 2004-05 to 2007-08 and th e corre sponding re duction in poverty in rural and urban are as h ave bee n e stim ate d to an anal ysis of data on re al w age grow th in th e l abour and sal arie d e m pl oym ent categorie s. Additional l y, in order to asse ss th e im pact of a grow th rate of 9 pe r ce nt on th e traje ctory of ine q ual ity, th e auth ors, inste ad of re l ying sol e l y on ine q ual ity base d on consum ption e xpe nditure, h ave estim ate d w age ine q ual ity as w e l l. Th e e stim ate s sh ow h ow ine q ual ity, base d on diffe rent param e te rs, h as not fol l ow e d a h om oge ne ous tre nd. K e yw ords: India, Poverty, Ine q ual ity, Ine q ual ity de com position, Ge ne ral e ntropy, Th eil Inde x

The success and failure of any democratic government is gauged in terms of how effectively it has fulfi lled its constitutional obligation of enhancing social and economic well-being, particularly the common man. While developed economies use a set of indices to measure well-being, a systematic and comprehensive empirical assessment of well-being is found wanting in the most developing countries, including India. This paper discusses the status of social and economic well-being of Indian families as measured by a primary survey-based composite index, the India Protection Index (IPI), which is an integration of the important dimensions of well-being. It fi nds that nearly 65 per cent of households and people in India have a reasonable degree of protection (i.e., the power of well-being) and that most of the less-and under-protected are daily wage earners, without any village-urban divide. The western states are better protected, as Maharashtra has the largest number of well-protected households (16 per cent), followed by Kartnataka and Kerala each accounting for 10 per cent. In terms of concentration, Kerala with 70,735 well-protected households per million is at the top, followed by Karnataka with 44,949 households—Uttar Pradesh and Bihar being at the bottom, with 14,621 and 26,908 households, respectively. The results show that the IPI can effectively be used to identify the status of households in terms of social and economic protection.

This paper aims to identify the poor households in terms of the levels of poverty and inequality by using income data from the nationwide 'National Survey of Household Income and Expenditure (NSHIE-2004-05)' of the NCAER. The definition used by the Tendulkar Committee (41.8 per cent poor in rural and 25.7 per cent poor in urban India) is applied by using the per capita income level for arriving at the official 'poor' households. Further, a comparative profile of the poor and non-poor households is presented by using various socioeconomic indicators collected in the survey. For instance, the results of the survey reveal that around one-fourth of the 14 million odd official 'poor' households in urban India own a two-wheeler each, one-third of them own a colour television each, and almost two-third own a pressure cooker each. Almost one in five urban official 'poor' households has at least one well-educated member who is graduate or above. The paper also attempts to test the sensitivity of the poverty measures to the different deprivation ratios estimated by the Planning Commission, the World Bank, Arjun Sengupta (NCEUS report) and Suresh Tendulkar.

The Indian economy is on the fulcrum of an ever-increasing growth curve. Effective macroeconomic management during recent years ensured that India remained one of the fastest growing economies among emerging market economies in an environment of macroeconomic and financial stability. The average annual growth in real national NNP (Net National Product) for the years 2002-05 was about 6.55% and about 9.48% for 2005-08. Also, India has initiated several structural reforms by opening up of the economy to the external sector in phased manner, which has imparted a degree of dynamism to its business environment.

In India, nearly 27.83 lakh handloom households are engaged in weaving and allied activities, out of which 87 per cent are located in rural areas and remaining 13 per cent in urban areas. The majority (82%) of handloom working households are weaver households, which means that at least one member of every such household is engaged in weaving activities. Nearly 14 per cent are allied worker households, 3 per cent are idle loom households and about 1 per cent are other handloom households having no adult handloom workers. In the North-East, 90 per cent of the handloom worker households are weaver households. The allied worker households are mostly found in the states outside the region, and form 29 per cent of the total handloom worker households in these states. A caste-wise breakup yields that about 10 per cent handloom working households belong to the Scheduled Castes (SCs), 22 per cent households belong to the Scheduled Tribes (STs), 41 per cent households are from Other Backward Castes (OBCs) and 27 per cent households belong to Others. There is major difference in the caste composition of handloom worker households in the North-East and other states. In the North-East, ST (36%) and OBC (33%) households have similar proportions of almost a third of the total households, followed by Others category households (24%), while SC households (7%) are far less in number. In states outside the North- East, more than half (53%) of the handloom worker households are OBCs, followed by households from Others (31%). SC households account for 14 per cent of the total, while ST households have a very small presence.

Consumers of India resemble a hydra-headed monster (or a multi-splendoured thing, depending on the beholder’s point of view), and this understanding often begs the question: which India and whose India are we talking about? There is one India whose proud inhabitants enjoy higher per capita incomes than Brazil; a larger one that is slightly poorer than Indonesia and a third India that is double in size to the sum of the first two, but almost as poor as Bangladesh.
Most consumers in India do not work in the organised sector and their wellbeing cannot be discerned from salary and wages data maintained by corporate houses. Many are not even salaried, but are self-employed or casual wage earners. Only 37 per cent of urban and 11 per cent of rural Indian households have a chief wage earner earning a regular salary/wage. Only in the top 20 cities is the salaried percentage close to half. In reality, most consumers are financially vulnerable. A quarter of them have loans outstanding; in case of a major drop in income, there
is lack of sufficient savings to sustain them for even a year. What makes them spend is a financial (mis)optimism that something, somehow would work out. Yet, collectively, they account for the fourth largest economy in the world in purchasing power parity terms, and their consumption is a significant driver of India’s economic growth.

THE RAPID RISE IN THE COUNTRY’S middle and high income classes1 is likely to lead to an even sharper rise in the demand for both consumer durables and consumables. Between 1995-96 and 2001-02, the
demand for automobiles, for example, rose by 9.8 per cent annually and is projected to rise 1.5 times faster between 2005-06 and 2009-10 to nearly touch 13 million units by the end of the decade.
Demand growth rates for TVs are expected to more than double during the two periods (from 4.6 to 9.7 per cent annually) to touch the 17.5 million mark, while that for other white goods such as refrigerators,
washing machines, and air-conditioners is expected to rise, but not dramatically.

Despite a very large sample size, it has not been possible to extend the MISH-derived income distribution beyond Rs 1,80,000 a year to give robust estimates of consumption at higher income levels. The
principal reason is the small cell sizes, which we do not believe should be extrapolated to give consumption estimates for higher income groups. However, the fact remains that with consumer markets growing the way they are, the upper income groups have a special significance. The flood of premium products from local and multinational firms has made it vital to extend this income distribution beyond the range provided in MISH.
To derive a robust distribution purely through sample surveys would mean increasing the sample many times over. Further, in cluster samples, where intra-clusteral correlations are high, the estimates would
not be efficient, unless stratification at the block/village level is introduced. In view of this, NCAER researchers attempted a model approximating the empirical frequencies obtained through MISH with a theoretical distribution (see pages 98 to 99). This theoretical distribution was extended for the desired income ranges. While doing so, corrections were made to the reported income to take care of conceptual differences between national income statistics and the reported household incomes in the survey.

IT IS RIGHTLY SAID that while children are the future of the country, youth are its present. The energy, enthusiasm, dynamism, innovative
ideas and creative thinking they possess make the youth population an important asset for any country's accelerated development. With
regard to youth resources, India has a distinct edge over the developed nations most of which will be facing the burden of a fast ageing
population in the coming decades.
Numbers alone are just part of the story. In order to reap the benefits of the "demographic dividend" it is necessary that these young
men and women are imparted the right kind of education, motivation and exposure and provided with opportunities for the development of
their personality and functional capability so as to make them economically and socially useful. A country's economic progress depends on
its people, especially the young, having access to the world of knowledge conveyed by the printed media. Removing the barrier of illiteracy,
developing a reading culture and creating adequate opportunities for reading are the cornerstones of intellectual, emotional and civilized
life. It is rightly said that 'the right to read' also means "the right to develop one's intellectual and spiritual capacities, the right to learn and
make progress".

INDIA, with 70 percent of its population living in rural areas, is characterised by diverse natural, socio-economic and socio-cultural conditions and a complex developmental path – on one side there is marked underdevelopment and widespread poverty and on the other side the country is known for its spectacular growth and accelerated development in several modern sectors of economy. Starting from
a low level the country has managed to improve the socioeconomic
condition of its people in recent decades.

COUNTRIES WORLDWIDE MONITOR THE health of their scientific and
technological activities through ‘national science reports’. These country reports are an important component in reconstructing national S&T priorities and have played a large part in funding and monitoring S&T programmes in these countries. Unfortunately, no systematic and comprehensive empirical assessment of S&T efforts is available in the Indian context, resulting in a relatively chaotic and contradictory picture of the national efforts in S&T. An important factor contributing to such
images of S&T efforts in the country is the paucity of reliable data in an accessible and timely manner.
Further, studies of the impact of Indian science on society and national development are often based on sporadic, outdated, and scattered Indian reports. A few studies, with specific purposes, have been undertaken at different points of time to evaluate the performance of institutions based on various S&T statistics, for example, in the context of restructuring scientific institutions, creating centralised facilities, cost cutting, and improving productivity. At the national level, no efforts have been made on a single platform to evaluate the overall scientific and technological achievements of the multi-layered S&T system in India. Often international data sources are consulted.

The payments business in India is on the cusp of a revolution. With rapid
growth and modernization of the economy, there is no doubt that a majority of India’s 1.2 billion plus citizens will demand and get modern financial services far superior to what their parents’ generation enjoyed. It is simply a matter of when the supply side catches up. This report is the product of a research effort that analyzed the most pertinent policy documents, reports, scholarship, expert interviews, and payments data.
It is the second in a series of country reports on The Cost of Cash by the Institute for Business in the Global Context (IBGC). The series seeks to ascertain the private costs and risks of cash management facing diverse stakeholders in society: consumers, business, government, and financial
systems. It does not forecast the likelihood that cash will fall into disuse, or drop below any threshold in payment market share. It is different from much of the academic work in payment economics, which focuses explicitly on social costs with a view toward informing debates around
payment clearing and settlement. Instead, we analyze the private costs to households and businesses that arise from their use of cash, beginning when cash is received and ending when it is spent again. We base our estimates on original IBGC surveys, coauthors’ surveys and interviews, and a broad mix of academic studies and official statistics.
The motivating question is why Indians transact primarily in cash, and whether there is reason to expect any drastic change in their payment behavior in the short to medium term.

This book brings together original, rich and nuanced data on the
relationship between caste and economic patterns. It looks at the relationship between caste and a whole range of variables: education, income, consumption and savings. It provides a much more sophisticated way of looking at different dimensions of inequality than is current in the literature. I will not spoil the reader’s sense of surprise by reiterating the rich statistics that follow. What I propose to do instead is explain why some of these findings may be of interest to those who are concerned about some big debates in India: the relationship between caste and inequality, appropriate development strategies, the consequences of private versus public expenditure on health and education and so forth. As such, this book provides a valuable starting point for a range of important discussions in contemporary India.

Over the years there has been a shift in the development discourse. Progress in development is no more defined on the basis of overall income growth of the economy, but rather on the quantum reduction in the share of population deprived of ‘basic needs’. The present report makes an attempt to analyse the progress of India with regard to four important essential needs during 2001-2018. These are access to electricity, tap water, toilet facility and LPG. The report analyses the group disparity in all these amenities across states, between rural and urban areas and more importantly among twenty heterogeneous district clusters. It needs to be kept in mind that the data pertaining to 2001 and 2011 are from the Census of India (2001 and 2011) and the data pertaining to 2014 and 2016 are from ICE 360° pan India household surveys. The data pertaining to 2018 are estimated for rural and urban areas separately for each district development cluster and each state using data from Census 2011 and ICE 360° surveys.