Standard of living in India

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Bicycles in Raghurajpur, Orissa.

Standard of living in India is modest and is improving.

As of 2005, 85.7% of the population lives on less than $2.50 (PPP) a day, down from 92.5% in 1981. This compares with 80.5% in Sub-Saharan Africa.^[1] 75.6% of the population lives on less than $2 a day (PPP), which is around 20 rupees or $0.5 a day in nominal terms. It was down from 86.6% and compares with 73.0% in Sub-Saharan Africa.^{[2][3][4][5][1]} A 24.3% of the population earned less than $1 (PPP, around $0.25 in nominal terms) a day in 2005, down from 42.1% in 1981.^[1][6] 41.6% of its population is living below the new international poverty line of $1.25 (PPP) per day, down from 59.8% in 1981.^[1]

The single most common indicator used to quantify standard of living is the per capita purchasing power parity (PPP) adjusted gross domestic product (GDP). In 2007, the per capita PPP-adjusted GDP for India was US$2,659. These figures can be compared to $5,292 for neighbouring China.

With one of the fastest growing economies in the world, clocked at an average growth rate of 8% between 2004-2005, India is fast on way to become a large and globally important consumer economy. The Indian middle class, estimated to be 300 million people^[7] by Indian standard (but much lower by European or North American standard), is fast becoming used to Western culture.^{[citation needed]} If current trends continue, Indian per capita purchasing power parity will grow to be approximately one third that of the developed world by the middle of the 21st century.^{[citation needed]} In 2006, 22 percent of Indians lived under the poverty line. India aims to eradicate poverty by 2020.^[8]

The standard of living in India shows large disparity. For example, rural areas of India exist with very basic (or even non-existent) medical facilities, while cities boast of world class medical establishments. Similarly, The very latest machinery may be used in some construction projects, but many construction workers work without mechanisation in most projects^{[citation needed]}.

[edit] Poverty

A child begging.

A 24.3% of the population earned less than $1 (PPP, around $0.25 in nominal terms) a day in 2005, down from 42.1% in 1981.^[1][6] 41.6% of its population is living below the new international poverty line of $1.25 (PPP) per day, down from 59.8% in 1981.^[1] The World Bank further estimates that a third of the global poor now reside in India.

On the other hand, the Planning Commission of India uses its own criteria and has estimated that 27.5% of the population was living below the poverty line in 2004–2005, down from 51.3% in 1977–1978, and 36% in 1993-1994^[9]. The source for this was the 61st round of the National Sample Survey (NSS) and the criterion used was monthly per capita consumption expenditure below Rs. 356.35 for rural areas and Rs. 538.60 for urban areas. 75% of the poor are in rural areas, most of them are daily wagers, self-employed householders and landless labourers.

Although Indian economy has grown steadily over the last two decades, its growth has been uneven when comparing different social groups, economic groups, geographic regions, and rural and urban areas.^[10] Between 1999 and 2008, the annualized growth rates for Gujarat (8.8%), Haryana (8.7%), or Delhi (7.4%) were much higher than for Bihar (5.1%), Uttar Pradesh (4.4%), or Madhya Pradesh (3.5%).^[11] Poverty rates in rural Orissa (43%) and rural Bihar (41%) are higher than in the world's poorest countries such as Malawi.^[12]

India has a higher rate of malnutrition among children under the age of three (46% in year 2007) than any other country in the world.^[10][13]

Despite significant economic progress, 1/4 of the nation's population earns less than the government-specified poverty threshold of $0.40/day. Official figures estimate that 27.5%^[14] of Indians lived below the national poverty line in 2004-2005.^[15] A 2007 report by the state-run National Commission for Enterprises in the Unorganised Sector (NCEUS) found that 25% of Indians, or 236 million people, lived on less than 20 rupees per day^[16] with most working in "informal labour sector with no job or social security, living in abject poverty."^[17]

Since the early 1950s, successive governments have implemented various schemes, under planning, to alleviate poverty, that have met with partial success. Programmes like Food for work and National Rural Employment Programme have attempted to use the unemployed to generate productive assets and build rural infrastructure.^[18] In August 2005, the Indian parliament passed the Rural Employment Guarantee Bill, the largest programme of this type, in terms of cost and coverage, which promises 100 days of minimum wage employment to every rural household in 200 of India's 600 districts. The question of whether economic reforms have reduced poverty or not has fuelled debates without generating any clear cut answers and has also put political pressure on further economic reforms, especially those involving downsizing of labour and cutting down agricultural subsidiary

[edit] Physical infrastructure

Cheap and environment friendly public transport is seen as a necessity for India's crowded and polluted metros. Pictured here, is the New Delhi Metro, operational since 2002 and seen as a model for other metros.

Slum housing in Mumbai, where over 50% of the population reside in slums ^[19]. Providing decent housing is seen as a significant challenge as India undergoes urbanization.

Since independence, India has allocated nearly half of the total outlay of the five-year plans for infrastructural development. Much of the total outlay was spent on large projects in the area of irrigation, energy, transport, communications and social overheads. Development of infrastructure was completely in the hands of the public sector and was plagued by corruption, bureaucratic inefficiencies, urban-bias and an inability to scale investment.^[20]

India's low spending on power, construction, transportation, telecommunications and real estate, at $31 billion or 6% of GDP, compared to China's spending of $260 billion or 20% of its GDP in 2002 has prevented India from sustaining a growth rate of around 8%. This has prompted the government to partially open up infrastructure to the private sector allowing foreign investment.^[21][22][18] India holds second position in the world in roadways' construction, more than twice that of China.^[23]

As of 31 December 2005, there were an estimated 835,000 broadband lines in India.^[24] Low tele-density is the major hurdle for slow pickup in broadband services. Over 76% of the broadband lines were via DSL and the rest via cable modems.

A 2007 study by the Asian Development Bank showed that in 20 cities the average duration of supply was only 4.3 hours per day. No city had continuous supply. The longest duration of supply was 12 hours per day in Chandigarh, and the lowest was 0.3 hours per day in Rajkot.^[25] Some 700 million Indians do not have access to a proper toilet.^[26] Open defecation is widespread even in urban areas of India.^[27][28]

[edit] Regional imbalance

Rural life in Rajasthan.

One of the critical problems facing India's economy is the sharp and growing regional variations among India's different states and territories in terms of per capita income, poverty, availability of infrastructure and socio-economic development. For instance, the difference in growth rate between the forward and backward states was 0.3% (5.2% & 4.9%) during 1980–81 to 1990–91, but had grown to 3.3% (6.3% & 3.0%) during 1990–91 to 1997–98.^[29]

The five-year plans have attempted to reduce regional disparities by encouraging industrial development in the interior regions, but industries still tend to concentrate around urban areas and port cities. Even the industrial townships in the interiors, Bhilai for instance, resulted in very little development in the surrounding areas.^[30] After liberalisation, the disparities have grown despite the efforts of the union government in reducing them. Part of the reason being that manufacturing and services and not agriculture are the engines of growth. The more advanced states are better placed to benefit from them, with infrastructure like well developed ports, urbanisation and an educated and skilled workforce which attract manufacturing and service sectors. The union and state governments of backward regions are trying to reduce the disparities by offering tax holidays, cheap land, etc., and focusing more on sectors like tourism, which although being geographically and historically determined, can become a source of growth and is faster to develop than other sectors.^[31][32]

[edit] See also

• Economy of India

[edit] Notes

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