ECONOMIC TRENDS

SECTION i―STANDARD OF LIVING

In view of the non-availability of the relevant statistics pertaining to the past, it is not possible to give a comparative picture of the standard of living in the past and at present. However, the information from the old Ahmadnagar District Gazetteer which is reproduced in this chapter serves as a historical background to the present position. The present chapter analyses the pattern of income and expenditure of the families classified into three income groups. The analysis given below furnishes a basis for the comparison of the living standard enjoyed by various strata of the community. Besides, it also gives an idea about the trend in the standard of living enjoyed by the people.

What is described in this study is the standard of living as influenced by various factors such as income and expenditure of a family under the prevailing price structure, etc. For this purpose the family is taken as a unit.

It may be admitted here that though the actual observations corroborate the correctness of the broad outlines of the standard of living of the people in the district in a particular year, no statistical accuracy is claimed for the analysis.

Before setting to the task of analysing the various factors influencing the standard of living, it would be of immense interest to study the livelihood pattern of the people in the district as revealed in the census statistics of working population. Table No. 1 gives these statistics pertaining to workers distributed into broad livelihood classes in 1971.

The detailed Employment Exchange statistics regarding registration, vacancies notified and placement of candidates in various occupations in the district in 1966-67, 1969-70 and 1971-72 are given in table No. 2.

TABLE No. 1-CLASSIFICATION OF WORKERS AND NON-WORKERS IN AHMADNAGAR DISTRICT ACCORDING TO 1971 CENSUS

continued..

TABLE No. 2-EMPLOYMENT EXCHANGE STATISTICS IN AHMADNAGAR DISTRICT IN 1966-67, 1969-70 AND 1971-72

Source.-Bureau of Economics and Statistics, Government of Maharashtra.

Survey: In what follows is described, in brief, the standard of living of the people in the district as was reflected in a sample survey conducted by this department in the district in 1972.

For conducting the survey, a family was taken as a unit. The income of a family from all sources was considered together and the income groups were conceived on the basis of the computed income of a family with an average of four units, [For the purposes of cereal consumption, a person above 12 years of age is considered an adult.] two adults and four children.

While taking into consideration the expenditure aspect of a family budget, the expenditure incurred by a family was divided into two categories: monthly and annual. In monthly expenditure were included those regular items of expenditure such as cereals and pulses, education, entertainment, domestic servants, lighting and fuel. As against this, under the annual expenditure, such items were included as medical expenses, travelling expenses and other items upon which expenditure is incurred occasionally.

The property of a family alongwith its possessions and the condition of literacy were also considered at the time of the survey.

The families were divided into three income-groups based upon the computed income, viz., those with an average annual income of above Rs. 4,200, those having an average annual income ranging between Rs. 1,800 and Rs. 4,200 and those with an average annual income of less than Rs. 1,800.

Very rich families as also very poor ones were excluded from the purview of the survey as their inclusion would have consequentially inflated or deflated the averages arrived at. Had very rich families been considered at the time of the survey as also the very poor, the description of their family-budgets would not have been in consonance with the general trends visible in regard to the rest of the district populace. Thus, with a view to avoiding the errors creeping in, the very rich and the very poor were kept out of the purview of sample survey.

Group I: In this group were included families with an average annual income of Rs. 4,200 and above. A survey covering 44 families from this group was conducted. The average income of a family in this group per annum was placed around Rs. 9,000. The family in this group was composed of three adults and one minor, on an average, making a total of 3.5 units. The total number of earners in this group was 82 which gave an average of approximately two earners in each family.

The families in this group were staying in well-ventilated spacious houses. Every family generally possessed a steel cupboard, a ceiling or a table fan and other articles which might be deemed as luxuries from the point of view of other classes. They were generally well-dressed. High standard of literacy and education was witnessed amongst them. The families in this group were generally considered well-to-do.

Of the 44 families surveyed, 28 or about 68 per cent were staying in the houses owned by them, the aggregate value of which came to about Rs. 4,36,500, making an average of about Rs. 15,500 per family. About 23 families owned landed property valued at Rs. 9,08,500 in aggregate, with an average of about Rs. 39,500. The value of the property held in other forms amounted to Rs. 1,00,760, making an average of Rs. 2,290.

All the families owning landed property received an income of Rs. 2,09,300 annually which meant an average annual income of Rs. 9,100 per family. Of the families that owned houses, rental income accrued to only seven families and was placed at Rs. 19,600 with an average of Rs. 2,800 per annum. This clearly indicated that only 25 per cent of the owners of the houses had rented a part of their premises while others were using the houses for themselves. The occupational income of all the families put together came to Rs. 1,93,600 annually which meant an average of Rs. 4,400 per family. The average annual income per family from all the sources put together came to about Rs. 9,000 per annum.

Of the 44 families, 21 families reported cash savings amounting to Rs. 12,600, making an average of Rs. 600 per family. Many families had savings in other forms such as provident fund, insurance, savings certificates, etc. Only fourteen families reported debts to the extent of Rs. 56,000, i.e., an average of Rs. 4,000. These loans were contracted mainly by agricultural families residing in the rural areas for carrying out improvements in agriculture.

It may however be noted that most of the families in this group were found to be reluctant to disclose the amount of savings fully.

The family in this group on an average spent Rs. 191 on food items which were distributed as under:-cereals and pulses, Rs. 88; ghee, oil, etc., Rs. 32; vegetables, mutton, eggs, etc., Rs. 18; and milk, Rs. 33. Other items of monthly expenditure were lighting which accounted for Rs. 15; domestic servants, Rs. 27; education, Rs. 62; entertainment, Rs. 11; and rent, house repairs, municipal taxes, etc., Rs. 31. These families generally employed a domestic servant who was paid on an average Rs. 27 per month as wages. In rural areas, these servants were found engaged in agricultural operations. In addition to the above facilities they were also given a pair of clothes in a year.

These families spent about Rs. 424 on clothing, Rs. 80 on religious matters, Rs. 240 on medical account, Rs. 36 towards social obligations and Rs. 360 on travelling and other miscellaneous items per annum. Thus the total annual expenditure incurred by a family on the items listed above came to Rs. 1,140.

The members of the family in the group used clothes of superior quality. The use of man-made fabrics such as terylene, nylon and dacron was not uncommon in urban areas. The women-folk in these families, particularly the younger generation, had taken to different fashions. Male as well as female members of the family had generally many sets of dresses and a stock of occasional wear too.

The families in this group generally maintained high standard of living. Their possessions besides those stated above included a radio set, a bicycle and they were found to be using wherever available gas stoves, pressure cookers, etc. Their utensils generally consisted of brass and copper and a variety of stainless steel articles. The use of silver-ware was not unknown to hereditary rich families. A number of families from this group were found to possess gold ornaments worth about Rs. 2,000 to Rs. 4,000. This was especially true of the rural folk. The ceremonial wears of women consisted of shalu, paithani and many costly apparels. These families were found to spend about Rs. 62 per month on education. The people in this group were characterised by a high percentage of literacy as well as a keen consciousness for higher education. Many could afford to send their children to other towns and educational centres for further studies. In urban areas they possessed good quality furniture such as sofa sets and chairs.

The families in this group could afford to spend a sum of Rs. 360 per year on miscellaneous items which included travelling, social obligations and religious rituals. Thus, the total average expenditure incurred by a family in this group amounted to Rs. 432 per month. Of this, Rs. 191 were spent on food items which formed about 44 per cent of the total expenditure per month, and was about 25 per cent of their total income.

Thus it will be seen from the above analysis that the families in this group could afford to spend on luxuries and could save some amount.

Group II: The sample survey covered forty families from the middle income group with an annual income ranging between Rs. 1,800 and Rs. 4,200.

The families in this group were found to be staying in small but decent houses in the urban areas, while the houses in rural areas were of a lower standard. Generally these people were well-dressed though they might not have many sets of dresses. The percentage of literate members was also high among them. The imperatives of the changing times have made them very much conscious about the importance of education.

An average family was composed of four adults and three minors, making a total of 5.5 units. There were 59 earning members in 40 families surveyed, while there was only one earning member each in 26 families, ten families had two earning members each and three families had three earning members each. One family was found to have four earning members.

Of the forty families surveyed, 22 owned houses valued at Rs. 1,03,400 in aggregate, making an average of Rs. 4,700 per family; 4 owned landed property valued at Rs. 3,57,500, making an average of Rs. 32,500 and only six families owned property in other forms valued at Rs. 4,800, with an average of Rs. 800 per family.

Though 22 families owned houses, only three families derived rental income. This income amounted on an average to Rs. 700 per annum per family. The eleven families owning landed property received an income of Rs. 28,600 in aggregate with an average of Rs. 2,600 per annum per family. The aggregate occupational income of all these families was Rs. 1,29,200 per annum with an average of Rs. 3,230 per annum per family.

About 25 per cent of the families surveyed received a subsidiary income from agriculture. Among this group there were considerable land-holders prior to the implementation of the land reforms aimed at restricting the size of holding. In the past, these people did not cultivate land owned by them, but used to give it to tenant-cultivators for cultivation and received a share in the produce. The progressive land reforms legislation based on the principle of abolition of absentee landlordism has deprived a number of persons from this group of their landed property. This measure has deprived them of a subsidiary income from rent.

Only twelve families out of forty had their savings. Most of the savings were in the form of provident fund, insurance, etc., though small bank balances could not be ruled out. Loans were contracted by 18 families ranging from Rs. 500 to Rs. 5,000. In a few cases these loans were contracted to meet the unforeseen expenditure. The loans carried an interest rate ranging from 8.5 to 10.5 per cent per annum. These loans were, in most of the cases, taken from co-operative societies against personal securities and only in four cases against the security of landed property. Only one family had contracted loans to meet the educational expenditure while many others had contracted loans to carry out improvement in their landed property.

The average monthly expenditure of a family in this group came to about Rs. 220. Of this, an amount of Rs. 145 was spent on food items, which comprised cereals and pulses, Rs. 65; oil, ghee and butter, Rs. 20; vegetables, eggs, mutton, Rs. 20; and milk. Rs. 40 The remaining amount of Rs. 75 was spent on items such as lighting,. Rs. 5; domestic servants, Rs. 15; education. Rs. 15; entertainment. Rs. 10; and rent, house tax and repairs. Rs. 30.

Domestic servants were found to be employed by 15 families in this group. In respect of entertainment an average family in this group spent about Rs. 10 per month on cinema shows, dramas and tamashas, the last being mainly restricted to families in rural and semi-urban areas.

As has been stated earlier, the level of literacy and education was better in the families in this group than those in other groups. This could be attributed to their awareness of the importance of education as a means of securing good jobs. Of the forty families surveyed, 27 were found to be spending a substantial amount on education.

The family in this group spent on an average Rs. 310 per annum on clothing, Rs. 150 on religious items, Rs. 135 on medical account, Rs. 25 towards social obligations whereas a sum of Rs. 100 was earmarked for miscellaneous expenditure. Thus, the total annual expenditure of a family in this group came to Rs. 720, giving a monthly average of Rs. 60.

It will be observed that the total monthly expenditure on all items taken together amounted to Rs. 280 per family. Of this, about Rs. 145 or 52 per cent of the total expenditure was incurred on food items. After meeting necessary expenditure an average family in this group could hardly save anything.

The families in this group used brass and copper ware though the use of stainless steel was quite frequent. A few of the families. particularly in urban areas, used pressure cookers. A few had electric fans. Every family reported a few ornaments, mostly prepared at the time of marriage ceremony. Many of them possessed costly garments such as shalu, paithani and pitambar as well as radio sets and bicycles The families in this group used clothes of good quality. Generally they did not possess many sets of dress as was the case with families in the first group though they were found to use decent clothes. The members of this income-group were found to maintain themselves within their means and were striving to have a decent living. Their budgets were by and large well-balanced with the limited resources available with them.

Group III: In this group were included the families with an annual income of less than Rs. 1,800. The survey covered 24 families from this group. A family on an average was composed of six adults and two minors, making a total of seven units. There were 48 earning members in 24 families which meant an average of two earning members per family. Twelve families reported one earning member each, seven families reported two earning members while the rest of the families had three to four earners each.

The housing condition of the families in this group was very much characteristic of their poverty. A majority of them were found to stay-in slums and drab dwellings exposed to the vagaries of Nature. Of the families surveyed from this group, 19 or about 79 per cent owned their dwellings. Only two of them received income from the house. Five families owned small landed property which yielded a meagre income. Only three families owned property worth about Rs. 3,600 in some other form. Their occupational income was the only source of livelihood as they did not possess any productive assets as such.

Only one family from this group reported cash savings of about Rs. 100. Four families had a small saving in the form of provident fund. Of the families in this group, 11 or about 50 per cent were indebted to the sum of Rs. 13,000. Of these, two families had contracted loans to the extent of Rs. 3,000 each while three families had a loan of Rs. 1.000 each. One family was indebted to the extent of Rs. 1,500, while in the case of the remaining families the debts were around Rs. 500. The loans carried interest at rates varying between 5 and 12 per cent per annum. Even in case of families which were not actually in debts, they too had to avail of credit facilities in order to bridge the gap between income and expenditure.

The total monthly expenditure of a family in this group amounted to Rs. 170. Of this, an amount of Rs. 145 was spent on food items which was distributed as under: cereals and pulses, Rs. 90; oil, Rs. 15; mutton, eggs and vegetables, Rs. 15; and milk, Rs. 15. The other items of monthly expenditure were lighting, Rs. 5; education Rs. 5; entertainment, Rs. 5; and rent or maintenance of accommodation Rs. 10, making a total of Rs. 25.

They were found to spend about Rs. 250 on clothing, Rs. 60 on religious matters, Rs. 60 on medical account and Rs. 70 on miscellaneous items including travelling per annum. Their total annual expenditure amounted to Rs. 460 with a monthly average of Rs. 38.

Thus, it will be seen that the monthly expenditure of Rs. 145 incurred on food items was about 71 per cent of their total expenditure and about 79 per cent of their total monthly income. This speaks for the imbalance in their family-budgets as well as state of utter poverty.

The families in this group generally used earthen ware and aluminium utensils. Their bedding sets usually consisted of kamblis (rough woollen rugs), godhadis (generally prepared from old clothes), etc.

A few families were found to possess radio sets especially transistors as well as wrist-watches and bicycles.

This class of people had a very poor percentage of literacy. With the introduction of free and compulsory primary education, the children in these families have started availing of the educational facilities. However a considerable number of people in this group are yet to realise the necessity of educating their wards. The principal reason is that their poor economic condition forces them to seek for their children some avenues of earning. A slow but consistent change was however noticed in their attitude towards this aspect. Quite a few persons were found to send their wards even for higher education in cities. This has been possible because of the free education facilities provided by the Government.

Comparison between the three groups : The family on an average was composed of 3.5 units in the first group while that in the second and the third groups was composed of 5.5 and 7 units, respectively. This corroborates the fact that the size of a family is generally bigger among the low income groups. There were, on an average, two earning members per family in respect of the first and the third group, while in respect of the second group the average was slightly higher than one. It was interesting to find that more earning members in respect of the higher income group contributed to raise their standard of living while more earners in the lowest income group was a matter of utter necessity to maintain themselves.

About 68 per cent of the families in the first group, 50 per cent in the second group and 79 per cent in the third group were slaying in the houses owned by them. The average value of a house owned by the families in the first group was about Rs. 15,500 as against Rs. 4,700 in case of a family in the second group. Though the percentage of houses owned was higher in the third group, many of these dwellings were huts and cheap type shanties constructed on Government land. The families in the first group generally stayed in well-ventilated spacious premises. The tenements of the families in the second group were also well-ventilated though small. The families in the third group generally stayed in one-room tenements.

In respect of dress, the difference in case of the families in the first group and the second group was insignificant. Families in both these income-groups stitched clothes to their liking and of superior quality cloth. The difference was only in respect of the number of sets of dress that they possessed. The families in the first group had many sets of dress while those in the second group had sets of dress just enough for them. As against this, the families in the third group had meagre wearing apparel.

The percentage of literacy as also the educational standards were higher in respect of the first and the second groups. The percentage of literacy amongst the families in the third group was at the lowest prior to Independence. It increased subsequently with the introduction of compulsory free primary education. But even now the level of education is not higher in this group. Though the children from the economically backward class with an income of less than Rs. 1,800 per year get free education facilities many of the families could not afford to send their children to schools as their economic hardships force them to seek some avenue of employment for their children.

As is evident from the economic position of all these groups indebtedness was more frequent in case of the third group wherein loans were contracted to make the both ends meet. It was noticed that loans were contracted by the families in the first group mainly for some productive purpose such as improvement in agriculture, etc. An example of contracting a loan for purely educational purpose was met with only in the case of one family in the second group.

The families in the first group spent 44 per cent of their total expenditure and 25 per cent of their total income on food items. In case of the second group the money spent on food items was 52 per cent of both their income as also their expenditure. As against this, the amount spent on food items in case of the families in the third group was 71 per cent of their expenditure and 79 per cent of their income.

These statistics are self-explanatory while they bring home the fact as propounded by the Engel's Law of Consumption that as income increases the percentage expenditure on food and other necessaries of life decreases and vice-versa. They also show that the percentage expenditure on luxuries, as also cultural and recreational items increases with an increase in the income and decreases when income decreases.

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