Elections can be won or lost on one key thing: how people feel about their economic well-being. That in turn depends on how much families are able to earn. Although India has experienced healthy economic growth of about 7.5% per year for the past decade, have the benefits of this ‘trickled down’, as was predicted by economists at the helm of affairs?
Not much, if you go by incomes and wages, especially at state levels. Over the 12-year period from 1999-00 to 2011-12, rural incomes adjusted for inflation grew by just 24% and urban incomes by 35%. That translates into an annualized growth in real incomes of about 2.5% for urban areas and 1.8% for rural areas, well below the rates at which the economy was growing in this period.
Since there is no income survey in India, the closest one can come to finding out how much Indian households are earning is through the accepted practice of using consumer expenditure surveys conducted by the National Sample Survey Organisation (NSSO). According to the most recent such survey in 2011-12, the average monthly expenditure of a person was Rs 1,287 in rural areas and Rs 2,477 in urban areas. For a family of four, that translates to Rs 5,148 in rural areas and Rs 9,908 in urban areas.
These are averages, which hide wide variation across states and even wider variations between poor and rich. At the national level, 60% to 70% of the population survives below these averages. Eight of the country’s 17 big states (with over 2 crore population each) had incomes below the national average for rural areas and nine of them were below the national average for urban areas.
Unsurprisingly, states with very low incomes included Chhattisgarh, Bihar, MP, Odisha and Jharkhand while the top states were Haryana, Punjab, Tamil Nadu, Maharashtra and Andhra Pradesh. Karnataka was quite high in urban income rankings but lower in rural ones while Tamil Nadu was the other way round.
Surprisingly, in Gujarat, a relatively developed state both in terms of agriculture and industry, the average monthly income of Rs 2,472 per person was lower than the national average. For rural areas, Gujarat’s average income was slightly higher than the national average at Rs 1,430. In fact, between 1999-2000 and 2011-12, Gujarat has slid down the rankings because its rural income grew at 14% per year compared to a national average of 15% and its urban income grew at 12% compared to 13% nationally.
According to Census 2011, one of the biggest occupations is agricultural labourers, numbering some 8.6 crore as main workers and another 5.8 crore as marginal workers. Their numbers have increased by about 34% since 2001. What kind of wages do these bottom-of-the-pyramid dwellers get?
The average daily wage for a male unskilled labourer in rural areas was Rs 192, ranging between a high of Rs 493 in Kerala and a low of Rs 129 in Gujarat. Generally, wages for various agricultural operations like ploughing, sowing, weeding, transplanting and harvesting were around Rs 200 per day for men and about Rs 150 for women, on an average. Again, there are wide variations between states in these wage rates recorded by the Labour Bureau every month from a sample of 600 villages.
For non-agricultural casual labour like construction, the national average was Rs 139 per day in rural areas and Rs 170 in urban areas, according to NSSO. In rural areas, top wages for such work were found in states like Haryana, Punjab and Tamil Nadu while the lowest wages were in Chhattisgarh, MP, Gujarat and Maharashtra.
Regular and salaried employees get much higher wages. In rural areas, their wage averaged about Rs 300 per day and in urban areas about Rs 450 per day nationally. Haryana, Assam, Jharkhand and Karnataka had some of the highest wages while Gujarat, Chhattisgarh Tamil Nadu and Punjab had the lowest in urban salaried employees.
Relentless price rise has decimated earnings of families across all states. Given that reality, governments in states that have managed to generate better incomes for people might find it easier to beat anti-incumbency sentiments in the coming elections than those that haven’t.