ECONOMIC TRENDS

STANDARD OF LIVING

General.—The existence of individual wants is the basis out of which economic activity in particular region, say a district, grows. The real income and the tastes of the people determine their expenditure pattern and, therefore, are the most influential factors in determining the productive activity or the industrial growth of the district. The commodities to the consumption of which an individual is accustomed to may be classified into necessaries, comforts and luxuries and they constitute his standard of living. What is true of one individual is true of a group of individuals or for that matter of all the individuals in a social group taken together. The standard of living of the people of the district could thus be said to be mostly determined by the level of their income and material benefits derived from it, the pattern of expenditure depending upon the habits of consumption.

A survey of the present standard of living of the people of the district becomes necessary in the context of the preparation of a plan for its economic and social progress. As things stand the low standard of living is one of the obstacles impeding the economic growth of the district. The low standard of living especially in underdeveloped areas is the effect of low per capita incomes. Naturally, the emphasis is now more upon enhancing the avenues and quantity of investments which would lift the real incomes and money incomes of the people of the district. The standard of living of the people depends upon the extent of resources available for the production of wealth, the quantity of wealth produced by the people and the way in which the wealth produced is distributed. In a case like that of our own country, elementary needs in the form of food, shelter and clothing are not satisfied to the extent to which they ought to be. Naturally all the activities of the State directed towards the supply of these needs by following a policy of all-round planning could be regarded as an attempt to bring about equilibrium between the elementary needs of life and their satisfaction and not as an attempt to improve the standard of living of the people.

The term ' Standard of Living' should be distinguished clearly from the term 'Standard of Life' as many a time both are considered to be synonymous. The term ' Standard of Living' indicates the necessities, comforts and luxuries to the consumption of which an individual is accustomed to while, the term ' Standard of Life' indicates an ideal situation or goal towards which an individual or family would strive to raise their standard One well-known economist, viz., Marshall, distinguishes between the standard of life and the standard of comfort, the former implying the individuals' entire social and moral outlook whereas the latter suggesting an increase of artificial wants, among which the grosser wants may predominate.

National income figures are an index to the standard of living possible for a people. They are useful also for finding the trend of economic development or progress over a period of time. When we do so, we have to take into account the changes that might have occurred in prices, in the habits of the people regarding food, drink, clothing and such other things.

The method adopted for calculating national income could be used to calculate the district income as well. The national income of a country could be computed by making use of any of the three following methods: —

(i) Census of Production Method: As per this method the value of the net national product including all productive activities in a given period of time is found out. The goods and services produced might either be valued at measure prices or factor prices which means wages received by all the factors of production.

(ii) The Census of Income Method : As per this method, the incomes and payments received by all the residents of a country in the form of wages, rent, profits, interest, etc., are added to arrive at the figure of national income.

(iii) The Census of Expenditure, Investment and Savings Method: As per this method, the expenditure of all individuals is added so that the national income is equal to the sum-total of expenditure on consumer goods, investments and hoardings of the people.

However, it is not possible to use any one of these methods singly to the exclusion of the others because none of the methods covers all the sources of incomes accruing to the individuals, both material as well as non-material. If the methods could be applied with advantage for computing the national income as ready statistics are easily available, it is not so in so far as the computation of the income of a region or a part thereof is concerned

The difficulties encountered in obtaining statistics for such a small tract of the territory as a district both by collection and Survey are innumerable and any attempt to compute the district income on this basis proves futile.

Naturally, while assessing the standard of living of the people in the district, no attempt is made in this chapter to calculate the district income as also the relative standard of living of the people in the district.

This chapter, therefore, gives the statistics of income-expenditure ratios of different income groups in the district. Such a data would provide a basis for comparison between the standards of living enjoyed in the district by the families in different income groups.

There are three major factors that enter any assessment of the standard of living of the people in the district. They are— (i) those elements which are essential and possess survival value for the individual such as food, clothing, shelter and medical services; (ii) the prestige values which indicate the existence of social groups and have survival value for the group, they are the symbols which distinctly mark the social status and so enable the individual to identify himself with the group, e.g., clergyman's coat; and (iii) those elements which represent the group concept of welfare including values which make the particular bias or interest of the group, whether puritanic or commercial.

The extract taken from the old Gazetteer of Bhandara district, published in 1908, concerning the material condition of the people may be of some value in the present assessment of the standard of living of the people in the district. The same is reproduced below:

" The following note on the condition of the people has been contributed by the Deputy Commissioner, Mr. E. Danks.

' The District enjoyed considerable prosperity in the period that elapsed between the 30 years' settlement and the beginning of the famine years. There have never been any large towns and during this time it depended almost entirely upon agriculture. It was very thickly populated and evidences of its prosperity are to be found in the large number of private irrigation works built, and in the solid character of the houses, especially in the open country. The density of population is the more striking in that a large portion of the District is under forest. As a natural result of its dense population and its almost complete dependence upon agriculture, the District was very hard hit by the famine years. The cropped area reached its height in 1893-94, when it was nearly 900,000 acres. In succeeding years it dropped each year with one partial recovery to little more than 650,000 acres in 1899-00. For the next three years it fluctuated between 750,000 and 800,000; since that time it has generally risen again to nearly 850,000. The area under rice, by far the most important crop in the District, showed a larger proportionate decrease and has not recovered so much. Mr. Craddock wrote in 1901 as follows: 'When I took charge of the division in 1901 the outlook was gloomy and there were suggestions in the air for the opening of kitchens (this though the rainfall of 1900-01 had been excellent): I marched through the Chandpur pargana early in May and found what seemed hopeless debt and despondency; little or no revenue had been paid, and no orders for suspension or remission had been passed.' Vigorous measures of relief were taken.

"The conciliation of private debts, a species of informal bankruptcy, was begun in 1901 under the charge of Rai Bahadur Anant Lal and concluded in 1905. The revenue demand was also decreased in 418 villages and the programme of public and private irrigation works was pushed on as fast as staff and funds would permit. The effect of these measures on the agricultural classes has been most marked even in the few years that have since elapsed. Relieved of an overwhelming load of debt, with the revenue demand reduced in every village which could fairly justify it, and with a large number of irrigation works built under stimulus and mainly at the expense of Government, the area under cultivation has steadily increased year by year and the people are with rare exceptions solvent and content. The number of minor improvements of land that are being made by private persons at their own expense, and the number of new houses that have been and are being built are a striking proof of the improvement of the condition of the agricultural population. The alteration in the position of the labourer is even greater. Between 1891 and 1901 the population of the District fell by nearly eighty thousand people or between 10 and 11 per cent. In the year 1902-03 when there was again scarcity though the death-rate remained low, a very large emigration took place, estimated at the time at fifty to sixty thousand people; a large proportion of these did not return to the District as they found remunerative employment elsewhere. The consequence is that the strength of the labouring population has been very greatly decreased. At the same time some large and many small public works have been begun, the manganese industry has made a sudden and expanding demand for labour, and reviving agriculture has begun once more to ask for its former supply. The supply of labour is totally inadequate to meet the demand. Attempts to import workers from other parts of the Province have not been very successful for various reasons, and the labourer holds command of the situation. The wages of unskilled labour have doubled in the last few years. The manganese industry is paying famine prices for the carts it wants to convey the ore to the railway. The labouring classes are enjoying a period of prosperity unparalled in the previous history of the District [Central Provinces District Gazetteers, Bhandara District, Volume A, 1908]."

To find out the income and expenditure pattern of the different classes of persons in the district a sample survey was conducted in the urban as well as rural areas of the district. The survey covered the following places in the district, viz., Lakhani, Arjuni. Sakoli, Adyal, Goregaon, Bhandara, Tumsar, Gondia, Gondumari, Saundad, Amgaon and Arjuni Morgaon. The conclusions of the Surveyed do not indicate whether the various classes of families surveyed are better off or worse off than they were in the past bur it shows the budgets of the different classes of families and the various trends in their budgets. Statistical accuracy is not however, claimed for the various findings of the survey.

The following method was adopted for conducting the survey for collection of information. A family or a household was taken as a unit of sampling in certain rural and urban areas representative of their typical characteristics. The actual observations were noted in the tabulated forms. A family was taken to represent four units so that the size of the family need not affect the income group to which it belonged under the above method. The families were grouped according to variations in income. The grouping was not based upon the actual income of a family but upon its computed income. For the sake of convenience, each adult or two minors (below 12 years of age) represented one full unit. On this basis the families surveyed were grouped as under: —

Income Group I.—Families with an annual income of Rs. 4,200 and above.

Income Group II.—Families with an annual income ranging between Rs. 4,200 and Rs. 1,800.

Income Group III.—Families with an annual income of Rs. 1,800 and below.

The survey of a family was undertaken with reference to the following points: —

(i) Annual income of a family from all possible sources of livelihood such as land, house, business or profession was noted. If the family had property in the form of house, land and cattle, etc., then the present value of the property was calculated on the basis of the figures supplied by the persons concerned.

(ii) The volume of debt and savings, if any, were also noted.

(iii) On the expenditure side the items of expenditure were calculated under two heads, viz., monthly and annual. The former was taken to consist of commodities of daily use where payment was made from month to month. Such items included, grocery, lighting, domestic services, education, entertainment, milk and house rent. The latter included items on which expenditure was incurred occasionally, such as clothing, religion, medical, charity, travel, etc.

In addition, family possessions in the form of utensils, ornaments, clothing (costly), furniture, etc., were also taken note of.

Income Group I.—The families in the first income-group comprised big businessmen, agriculturists' possessing considerable land, some owners of the miscellaneous occupations, big industrialists, doctors, merchants, officers—both government and nongovernment, etc. The families in this income group lived comfortably as their incomes ranged well over Rs. 4,200 per month. Generally, they preferred to have accommodation of their own and hence went in for separate blocks and independent bungalows depending upon their means and mostly situated in the elegant localities of the towns. Their dwellings were equipped with polished and costly furniture, such as sofa-sets, fans, mirrored steel cupboards, and floor carpets in the drawing rooms, bedding and mosquito curtains in the bed-rooms and gas-stoves, pressure cookers, dining table and cupboards with formica tops, etc., in the kitchen and dining room. A few even possessed expensive luxuries like refrigerators and various modern electric appliances. Some families decorated their dwellings with floor lamps or wall lamps of various shapes and painted the walls with pleasant colours.

The survey covered 36 families from this group. The family was composed of 4 adults and 3 minors making a total of 5.5 units. Of the 36 families, only 7 families had more than one earning member, the total number of earners in the families surveyed being 45. Of the families surveyed, 12 families owned houses, while 9 families owned both houses as well as land and 15 families owned only landed property. Twenty families did not possess property in any form and depended for their livelihood upon the income from their respective professions. It was found that no family possessed property in the form of cattle and bullocks.

The annual incomes of the families in this group accrued from either: (i) land, (ii) house or (iii) occupation. The sample survey revealed that 15 families derived their income from land, aggregately valued at Rs. 61,700 giving an average of Rs. 4,113. Twelve families owned houses, but did not derive any income in the form of house rent. The total annual income of all 36 families surveyed, earned from different occupations was placed at Rs. 3,03,572, giving an average of Rs. 8,430 per annum per family.

Generally, the household savings consisted either in the form of financial assets such as cash, bank deposits, provident fund, life insurance policy and claims on government and private corporate sector or in the form of physical assets such as a house or agricultural holdings.

Of the 36 families surveyed, 24 families had their savings in the various forms mentioned above, the total savings amounting to Rs. 2,47,240 giving an average of Rs. 10,300 per family.

Out of 36 families, only 3 families were reported to be indebted and the average debt of a family was to the tune of Rs. 1,00,930. This debt was mainly taken for business purposes or for investment in land, houses, etc. All the three indebted families borrowed from banks, co-operative societies and relatives.

The monthly expenditure of the family was on food items and non-food items like education, entertainment, etc.

The survey revealed that the average monthly expenditure of a family in this group on food items was Rs. 160 and comprised cereals and pulses, Rs. 80; oils, i.e., edible oil, ghee, etc., Rs. 28; vegetables, and mutton, eggs (if a family is non-vegetarian), Rs. 28 and milk, Rs. 25. The average monthly expenditure on non-food items was Rs. 145 which was distributed as follows lighting, Rs. 10; domestic services, Rs. 74; education, Rs. 22; entertainment, Rs. 8; and expenditure on dwelling in the form of rent or municipal taxes and repairing charges, Rs. 31.

The average annual expenditure of a family in this group un clothing was Rs. 525, i.e., about 51 per cent of the total annual expenditure on non-food items. The high percentage expenditure on clothing was due to changing fashions and clothing of finer and costlier variety that was available in the market.

In all the surveyed families with the exception of one or two in this group, the average expenditure on religion amounted to Rs. 55 annually. The expenditure on medicines which was the next important item in the annual budget of the family, amounted to Rs, 250 on an average annually. Expenditure on social obligations was comparatively small, being about 2 per cent of the total annual expenditure of the family. The average annual expenditure of family on miscellaneous-food and non-food items such as condiments and spices, hotelling, travelling, laundering, etc., was about Rs. 160 per month.

As the families in this group were well-to-do, they invested a large amount in ornaments, furniture, etc. All the families possessed utensils made of stainless, copper and brass. Even the possession of silver utensils was not uncommon. The average value of the utensils possessed by the family was to the tune of Rs. 8,600. Of the 36 families surveyed, 29 families possessed gold and silver ornaments, collectively valued at Rs. 50,000. Eight of the surveyed families had costly garments such as shalus, paithani, woollen suits, and some other jari articles. Almost all the families owned a radio receiver and a bicycle, as well as various items of furniture depending upon the taste of the family.

The common items of furniture were, however, steel and wooden cupboards, big mirrors, number of cots—wooden or steel, chairs or sofa-sets, time-piece, etc.

The total monthly expenditure of a family in this group on food items was found to be 19 per cent of the total income which accounted for 48 per cent of the total expenditure.

Income Group II.— The middle class family as is generally known earned annually between Rs. 1,800 and Rs. 4,200. They stood in the middle between the rich and poor as regards their financial position and also their pattern of expenditure. The families in this group tried to reach the living standard of the families in the first group which they could not, however, do due to their limited resources.

The sample survey covered 52 families from this group and an average family was composed of 5 adults and 3 minors making a total of 6.5 units. Of the fifty-two families surveyed from this group, 33 families were dependent on the single earning member while the others had more than one earning member. Only 15 families, i.e., about 29 per cent possessed property in the form of land or house. The remaining 71 per cent of the families in this group earned occupational incomes.

The 15 families who possessed landed property, derived a total annual income of Rs. 37,600 giving an average of Rs. 2,505 per annum. The average occupational income of the family from this group was calculated at Rs. 3,190 per annum.

Of the fifty-two families surveyed from this class, only 18 families, i.e., 35 per cent saved a part of their income after meeting their day-to-day expenses. The average saving of the family was to the tune of Rs. 2,960. They had their savings in the various forms such as deposits in the bank, life insurance policy, provident fund, C. T. D., and hoardings. No borrowings were recorded in this class of families except a few which had to borrow to meet some unforeseen financial need such as illness in the family or marriage or such other social or religious occasions. The borrowings of the families were collectively valued at Rs. 4,750. Generally, loans were taken from co-operative societies, provident fund, banks, etc. While the families in the first group indulged in the borrowings for the sake of further investment in business, buildings, etc., the families in the second group indulged in the borrowing to face unforeseen expenditure as stated before.

The average expenditure per month of the family from this group on items of food amounted to Rs. 170. The expenditure on cereals and pulses was the highest, averaging about Rs. 75, i.e., 51 per cent of the total food expenditure per month. The total monthly expenditure of all the families from this group on oils was Rs. 1,285, giving an average of Rs. 25 and on vegetables, fruits, mutton, etc., Rs. 1,260, giving an approximate average of Rs. 25 per month per family. The expenditure of a family on milk and milk products averaged Rs. 15 per month.

Out of the 52 families surveyed from this group, only 32 recorded expenditure on lighting and other electrical amenities. 17 families, i.e., 33 per cent from this group employed domestic servants. The average monthly expenditure of a family in this group on lighting and on domestic servants amounted to Rs. 10 and Rs. 15, respectively. The monthly expenditure on education of these families varied from Rs. 5 to Rs. 120 per month depending upon the level of education, i.e., whether school, college or technical, etc. The average expenditure on education came to Rs. 30 per month. About 31 families, i.e,, 59 per cent recorded expenditure on entertainment, the average monthly expenditure being Rs. 13. The average monthly expenditure on rent of the families which did not possess their own houses, was Rs. 22 and was 24 per cent of the total monthly expenditure on non-food items.

The items on which a family spent annually were clothing, religion, medicines, social obligations, and miscellaneous items such as travelling, hotelling, transport charges, payments to tailors, laundries, etc. The average annual expenditure of a family on clothing was Rs. 515, i.e., 59 per cent of the total annual expenditure while that on medicines Rs. 190. Out of 52 families surveyed from this class, 41 families, ie., 82 per cent spent on religion, the average expenditure in it being Rs. 50 per annum. The average annual expenditure of 35 families in this group on social obligations was Rs. 35. The annual expenditure of an average family in this group on miscellaneous items amounted to Rs. 75.

The families in this group possessed aluminium, brass and copper utensils, just sufficient for their everyday needs. Stanless-steel utensils were rarely found in the households. Forty families, i.e., 77 per cent from this group, possessed ornaments, collectively valued at Rs. 56,550, giving an average of Rs. 1,400 per family. Generally, all families possessed tables, chairs, stools, etc., but no family could afford the luxury of cots, sofas, etc. Bicycle was the common item of possession as it provided a cheaper means of conveyance. Very few families had radio-sets.

The survey disclosed that the families in this group could spend little on comforts but nothing on items of luxury. Their households were small but clean and decent.

The total average monthly expenditure of a family in this group on food items was 43 per cent of the total income which accounted for 54 per cent of the total expenditure.

Income Group III.—This group comprising families with an annual income of less than Rs. 1,800 presents the lowest rung in the social order in the district. It is economically the most depressed class. The group was composed of petty artisans and farm workers in the rural areas and shop assistants, gumastas in the small commercial establishments, sweepers, coolies, and peons in the Government offices in the urban areas of the district. Generally they stayed in one-room tenemems which were ill-ventilated and ill-equipped or in huts constructed in the outskirts of towns and villages vulnerable to heavy rains. Consequently the poorer members of the class could not live within their incomes and the deficits in their incomes were met by incurring debts and some times by contributions from relatives. The persons in this group were however optimistic and always hoped for a better future.

Forty families were surveyed in the sample which revealed that a family in this group consisted of 5 adults and 3 minors, making a total of 6.5 units. There were 58 earning members in 40 families, giving an average of 1.4 per family. 26 families had one earner per family. Only 5 families out of 40 had subsidiary income from agricultural land, collectively valued at Rs. 5,500 Many families had their own small houses in the form of huts. The possession of milch or drought cattle by the families was a rare occurrence even in rural areas of the district.

The occupational annual income of all the families in this group was collectively placed at Rs. 70,510, giving an average of Rs. 1,764 per family. The earning members in this group were not assured of steady employment as also of monthly earnings. Some families could save in cash or in rare cases in the form of a policy though the amount of the saving was very meagre in case of such families. The budgets of many families in the group were characterised by a recurring deficit. Their small incomes forced the families to keep immediate bills pending and pay those that were overdue.

The average monthly expenditure of a family on food items came to Rs. 93, comprising cereals and pulses, Rs. 40; oils, Rs. 18; vegetables, Rs. 23 and milk, Rs. 12. Of the forty families surveyed, only twenty families, i,e., 50 per cent spent on lighting, the average expenditure on it being Rs. 8 per month. Only 6 families in this group could afford expenditure on domestic servants which gave a monthly average of Rs. 11. The survey figures further revealed that 22 families spent on education, collectively to the tune of Rs. 445, giving an average of Rs. 20.27 per month per family. The average expenditure of 26 families who spent on entertainment amounted to about Rs. 9 per month per family. One fourth of the families surveyed from this group lived in rented premises and the remaining in owned huts. The families in this group generally stayed in one-room tenements, the monthly rent whereof averaged to Rs. 16.

A family in this group on an average spent about Rs. 345 on clothing and Rs. 60 on religious account per annum. The clothing expenditure claimed 54 per cent of the average annual expenditure of the family. Of the surveyed families, 30 families afforded expenditure on medical treatment, and other miscellaneous items while only 20 families afforded expenditure on social obligation. The average annual expenditure of a family on the abovemen-tioned items was Rs. 137, Rs. 82 and Rs. 24, respectively.

The household equipment of these families consisted of a few utensils of brass and copper and mostly of earthen pots. It was found that some 50 per cent of the families possessed trinketry of petty value. Their bedding was also scanty and mostly comprised two or three mattresses, worn-out carpets and kamblis. The possession of a bicycle, wrist-watch and a radio by the families in this group was a rare occurrence. Even if some possessed furniture in the form of one or two chairs, cot, etc., it was not of a very significant value and desirable.

The families in the group were characterised by a low standard of literacy, whirh was the result of two factors, viz., (i) their low incomes which prevented them from incurring any expenditure on this item, and (ii) the tendency in the families to employ their children in the petty establishments or as farm labourers to supplement the family incomes.

A family in this group spent about 64 per cent of its income on food items which accounted for 54 per cent of its total expenditure.

Comparison between the three groups.—The standard of living of the district is determined by the amount and quality of subsistence the people get and the several amenities of life which they enjoy. The standard of living varies with different income groups and also with the changing conditions as time passes. When the income of the family increases it spends more on consumer goods. But the propensity to consume is low in the case of families with high incomes and high in the case of families with low incomes. Besides this, many other factors such as psychological attitude, expectations of changes in prices and rates of taxes determine the propensity to consume.

The sample survey disclosed that though the budget of an average family in all the three income groups was composed of necessaries, comforts and luxuries, the percentage expenditure on these items differed with the differences in the incomes. The item of expenditure which was a necessity for a family in the first group was a comfort to that in the second group and a luxury to that in the third group.

Consumption of milk was confined to the families in the first and second income groups and was a luxury for the families in the third group.

Clothing claimed the largest share in the annual expenditure of the families in the first and second groups. The quality and quantity of wearing apparel used by the families in these two groups differed slightly, though both preferred quality clothes. The number of sets of dresses was higher in the first group than in the second. The clothes of the families in the third group were scracely sufficient and were of coarse quality. The families in the third group could not afford high quality food, and also could not spend much on vegetables. While, the families in the first group generally purchased cereals and pulses, etc., of good quality and fruits of various types.

The families in the first group employed full-time or part-time domestic servants. The survey revealed that the average expenditure on domestic servants was Rs. 75 per month in the case of first group and Rs. 11 in the case of second group as very few families in the third group could afford the employment of domestic servants and that also only for washing of clothes and cleaning of utensils.

The average size of the household in the first group was composed of 5.5 units while that in the second group was composed of 6.5 units.

The persons in the first group could spend a larger amount on medical items such as doctor's fees and medicines than the family in the second group. The family in the second group could spend a larger amount on medicines than a family in the third group. The survey figures revealed that while an average family in the first group spent Rs. 250 per year on medical items, an average family in the second and third groups spent about Rs. 190 and Rs. 137, respectively, on the same.

As the concept of necessaries differed with the families in different income groups, expenditure on food and other necessaries could not be noted. Naturally percentage expenditure on food items only was taken into consideration.

In keeping with the above economic law, the families in the first income group spent about 19 per cent of their income on food-items which accounted for 48 per cent of their total expenditure (food as well as non-food) as against 64 per cent and 73 per cent by the families in the third group. The corresponding figures for families in the second group were 43 per cent and 54 per cent, respectively.

The survey also revealed that in the case of a family from the first group, food expenditure claimed 19 per cent of the total income while it claimed 64 per cent of the total income of the families in the third group. The families in the first group could keep a surplus aside after deducting the food expenditure for the consumption of articles representing comforts and luxuries.

Besides, the survey also showed that the percentage expenditure on rent and light was almost the same for all income groups. Though a family in the first group spent Rs. 41 per month on light and rent, and family in the second and third groups spent about Rs. 32 and Rs. 24, respectively, the expenditure of all the income groups on these items constituted about 10 per cent of the total expenditure. Similarly, the percentage expenditure of the families in all three income groups on clothing was almost the same.

The big size of the households affected adversely the financial position of the families. As per the 1961 Census, the composition of the household differed in rural and urban areas of the district. The Census gives the percentage proportions of different types of households as follows: —

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