Not a pretty picture

The National Sample Survey Organisation, which is responsible for collecting data on household expenditure and employment patterns, has published a summary of the findings of its 62nd Round survey, conducted during 2005-06. This is a "thin" sample survey of household consumption, following the previous year's "large" sample survey of the same variables, which is conducted roughly every five years. The large sample surveys provide the basis of detailed estimates of poverty incidence at state level. The thin sample surveys, conducted in the intervening years, cover about a fifth of the number of households in the large sample and are, therefore, not used to make detailed regional estimates of poverty. However, even with the limitations of sample size, the latest round provides some striking evidence of the disparities in standards of living that persist across the country.

The numbers suggest that the average urban resident spends almost twice as much per month as his rural counterpart. This, of course, does not factor in the wide dispersion across households within rural or urban areas, but it does suggest that at the very bottom of the income ladder any household migrating from the village to the city can expect to rather quickly double its spending. However, this does not represent a proportionate improvement in the quality of life, testified to by the abysmal conditions in which most recent migrants live, because the prices of many necessities are much higher in urban areas than in rural. Even after taking this into account, however, the gap may well represent the difference between destitution and survival. The importance of the gap is reinforced by the proportion of expenditure devoted to food by rural and urban residents. The former spend more than 53 per cent of their monthly budget on food items, while, for the latter, it is about 40 per cent. More and more migration, with its consequences for urban infrastructure and services, will be the inevitable outcome.

Employment and wage patterns also point to significant structural barriers to rising and stabilising incomes. The sample indicates that about 57 per cent of working men and 62 per cent of working women in the rural areas are self-employed. In the urban areas, these proportions come down to 42 and 44 per cent, respectively. The overwhelming majority of these situations are close to subsistence levels of earning, with no safety nets of any sort available. Obviously, a large number of people simply do not have access to secure jobs and do whatever they can to make ends meet. With respect to wages, it is quite striking that the average wage for rural male workers was just below Rs 60 per day, while for women it was below Rs 40. Leave aside the gender differentials, the minimum wages in most states are above these levels, indicating that such regulations are rather ineffective in ensuring even minimal levels of earning when there is such a large excess of workers looking for survival wages. This in fact becomes an argument in defence of a large-scale employment-creating programme, if one can be effectively implemented, because it would change the demand-supply balance in the job market and help to raise wages all round; the numbers who have registered for the rural employment guarantee programme in fact bear out the NSS findings that large numbers of people earn much less than the stipulated minimum wages.

Finally, there is significant disparity across states as well; Kerala shows the highest per capital expenditure for both rural and urban areas, while Chhattisgarh and Bihar come in at the bottom for rural and urban residents, respectively, both with per capital expenditures less than half of those in Kerala.