ECONOMIC TRENDS

STANDARD OF LIVING

The study regarding the standard of living of the people in the district is necessary for the preparation of planning for its further economic development. The low standard of living is one of the many characteristics of an underdeveloped area. A district has a low standard of living due to its low per capita income. Naturally the emphasis now-a-days is to identify development with those changes and investments which will lift real income per person much closer to its potential level.

Many a time, the terms ' standard of life' and ' standard of living' are considered to be synonymous. This not being the case it is necessary to distinguish between the two. The term standard of living denotes the necessities, comforts and luxuries to the consumption of which an individual is accustomed, i.e., it indicates the present way of living of an individual or a family. As against this, the term ' standard of life' represents an ideal situation towards which an individual or a family would aspire to reach in his or its effort to raise the standard.

The concept of standard of living is a relative one and gives a comparison between the standards enjoyed by the people in the past and the one enjoyed by them at present. This comparison between the present and the past is based upon a detailed analysis of income, expenditure, price level, etc., by the selection of a few normal years. This is done with a view to ascertaining a trend in the standard over a decade or so. However, analysis on such an elaborate scale is not possible in view of the difficulties encountered in obtaining the detailed statistical data required for such a purpose.

The other method to judge the standard of living of the people in the district is to measure the economic prosperity of the district in monetary terms in relation to fluctuations in price level. The rise or fall in the district income along with the price level would reflect the relative rise or fall in the standard of living in the district. In this method of judging the standard of living of the people, it is assumed that there is an even distribution of income and a fairly steady rate of employment during the period under study. The method adopted for calculating the national income, is used to calculate the district income. The nature of statistics required for calculation of district income is more diffi-cult to get than that which is required for the computation of the provincial or the national income. As both the methods, men-tioned above, are impracticable, no attempt is made to study the relative standard of living of the people in the district in the present chapter.

Hence, what is described in this chapter is the analysis of the income and expenditure ratios of the people, i.e., how they spend their incomes on various items by prefering one commodity to the other as also the allocation of that income over a wide variety of their needs. This analysis will positively indicate the trends in the pattern of standard of living of different families. It will also provide a foundation for comparison between the standards enjoyed by various strata of the community.

The old Gazetteer of Buldhana district published in 1910, offers some interesting remarks upon the standard of comforts enjoyed by the people in those times, and the same, reproduced below, may be of some value in the present analysis.

Standard of comfort: 'The standard of comfort in Berar, though not high, is probably lower than in any other rural tract of India. The house of the middle class clerk, for which he pro-bably pays rent varying from Rs. 2 to 10 per mensem is scantily furnished. His food costs him but little for he is, in all probabi-lity, a Brahman, and therefore, a vegetarian: but he uses such luxuries as wheat, rice, milk, ghi and sweetmeats more freely than does the cultivator. His clothes are of fine cotton cloth, the dhoti having usually a border of silk, and he wears a silken tur-ban; the whole outfit is so seldom renewed that it costs him com-paratively little. The cultivator's style of living and the size of his house depend on the size of his holding; but the distinction between the well-to-do and the impoverished cultivator consists largely in the quantity and the quality of the jewellery worn by the women of the family. The cultivator's clothes are of coarse cotton cloth. The labourer's standard of living is similar to the cultivator's but lower. His house is smaller and meaner, his cook-ing pots fewer, his food scantier, and his family jewellery less costly. There has been no perceptible change in the standard of living of these classes [The old Buldhana Gazetteer has reproduced this account from the Imperial Gazetteer of Berar, p. 35.] during the last decade. Juari is the staple food, which made into cakes is eaten with salt, chillis and a few vegetables when cheap and available. Dal is sometimes indulged in. The fruit of the Mahua, ber, chironji and other trees when in season also supplements the food of the poorer classes. Young amboo shoots and the leaves and roots of various plants are also consumed by the hill tribes. For fuel the droppings of cattle and dry wood and grass picked up are used. These classes are quite satisfied with this simple mode of living, and that they can easily secure enough in ordinary years is indicated by the luxuries that are often indulged in during marriage ceremonies, and at feasts and festivals, which are generally non-working days.

But it is in the matter of social ceremonies especially marriage, that the people expend their money freely. At marriage cere-monies the poor classes indulge in luxuries such as wheat, rice, sugar, etc., and luxuries are also reserved for some of the bigger feasts and festivals. Rs. 100 and more is sometimes spent by each of the contracting parties to a marriage. Among the better classes of cultivators between Rs. 400 and Rs. 500 is often spent. On the pat or second marriage the expenditure is much less.

Among the other classes, besides lavish expenditure on marri-age, the Brahmans have the thread and the Musalmans the Khutna ceremonies. The thread ceremony consists of placing sacred thread on boys between the ages of seven and nine years, thus rendering them twice born, and constituting the wearer an established member of a higher caste. The ordinary expenditure on these occasions is between Rs. 50 and Rs. 500 according to the means of the boy's father.

The Khutna is the circumcision ceremony and is generally per-formed before the boy attains the age of seven years. The poorer classes of Muhammadans expend very small sums on these occasions, but with the better class, the expenditure is between Rs. 100 and Rs. 500.'

A sample survey of the various classes of people staying in urban as well as in rural areas of the district was conducted in 1972. The survey covered Buldhana, Malkapur, Shegaon, Nan-dura, Jalamb, besides a few other villages. The data is based on tabulated information collected by direct contacts with a number of persons during the course of the survey. Though direct con tacts and on-the-spot observations bear sufficient proof for the accuracy of the general outline of the picture so revealed, no statistical accuracy is claimed.

The survey was conducted with a household or a family as a unit of sampling in certain areas typically representative of urban and rural characteristics. For the sake of convenience a family was taken to represent four units. The families were grouped according to different income groups on the basis of average annual income of a family for four units. The families so surveyed were grouped as under:-

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

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

Group III-Families with an annual income of Rs. 1,800 and less.

However, the grouping has not been based upon the actual in-come of a family but has been based upon the computed income for a family with four units.

The annual income of a family consists of its earnings from all possible sources of livelihood. It includes income from landed or other types of property, business, profession, or occupation. The sources of income vary according to education and career of the persons in a family.

The largest amount of spendings done by the ordinary con-sumers is on consumers' goods. The total amount of spendings is thus equal to the sum total of consumption and saving in the form of long and short term investment. When a family has higher income it will usually spend more money on consumer goods. But the propensity to consume is high in the case of families with low incomes and low in the case of families with high incomes. There are many other factors like psychological attitude, expectations of changes in prices and rates of taxes determining the propensity to consume.

The details such as number of members, number of earners, its property, annual income and expenditure, savings, indebtedness, family possessions and other observations regarding literacy and housing conditions, customs and conventions were noted in respect of each family.

The expenditure was grouped under the two heads, viz., month-ly and annual. The monthly expenditure of a family was taken to comprise expenditure on items of daily use and in the case of which payment was generally made month by month. Such items included grocery, lighting, domestic services, education, entertainment, milk and house-rent. These are generally called consumers' goods. The annual expenditure included items on which expenditure was incurred occasionally such as clothing, religion, medical relief, social obligations, charity, etc.

In addition to all these items, information regarding the family possessions comprising the utensils, ornaments, clothing, furniture, radio-sets, etc., was also collected at the time of the survey.

GROUP I

The families in the first income group comprised landlords, merchants, doctors, highly paid officers, industrialists, big busi-nessmen, etc. Generally they stayed in the so-called refined loca-lities of the town, in the premises mostly owned by them in rural areas and big flats in urban areas. Their drawing-rooms were furnished with sofa-sets, and fans and mirrored steel cupboards. Many had gas stoves, pressure cookers, etc. A few enjoyed costly luxuries like the air conditioners and refrigerators, etc.

The families in this group with an annual income of over Rs. 4,200 lived comfortably. Very few families in this group derived their incomes from hereditary property such as house and land.

The survey covered 23 families from this group. The family was composed of three adults and three minors making a total of 4.5 units. There were thirty-three earning members in twenty-three families and fifteen families had only one earning member. Of the families surveyed, ten owned houses collectively valued at Rs. 1,51,000, giving an average of Rs. 15,100; 9 owned landed property valued at Rs. 2,34,800 in aggregate, giving an approxi-mate average of Rs 26,089; three families owned other property such as cattle and bullocks aggregately valued at Rs. 14,100, giving an average of 467. Eight families owned both house as well as land and 13 families had no property, and so earned their incomes only from their occupations.

The survey disclosed, that of the families that had landed pro-perty, 9 families received an annual income from the land, and on an aggregate, it amounted to Rs. 57,500, giving an average of Rs. 6,390. Though 10 families owned houses, only one family was getting a rental income of Rs. 180 per year. The total annual income of all twenty families, earned from various occupations was placed at Rs. 88,388. With this the average occupational income of a family was Rs. 4,420 per annum.

In the survey, it was found that 14 families had their savings in cash and the total savings were Rs. 17,850, giving an average of Rs. 1,275. But the number of families having savings in paper securities or savings in other forms like insurance, provident fund, etc., was 17. These savings amounted to Rs. 87,425.

The families in this income group were well-placed compared to those in other income groups, and had no need to borrow, to make both ends meet. But some sudden calamities like illness, or other domestic needs forced some of the families to borrow. In these cases their debts were Rs. 15,500, giving an average of Rs. 2,214 per family of this group of seven families. But they had borrowed not from money-lenders, but from various other sources like cooperative societies, banks, provident fund, etc.

The average monthly expenditure of a family in this group on food items was Rs. 130 consisting of cereals and pulses, Rs. 55; oils, i.e., edible oil, ghee, etc., Rs. 25: vegetables, mutton, eggs, Rs. 20 and milk Rs. 30. The other monthly expenditure of Rs. 110 was distributed on lighting, Rs. 12; domestic services, Rs. 43; education Rs. 25; entertainment Rs. 10; and house-rent and other expenditure on items like taxes, in case of the houses, Rs. 20.

The average annual expenditure on clothing of the family in this group was Rs. 635. The high expenditure was due to the expensive habits resulting from better taste for clothes of fine quality. Out of the surveyed families, nineteen families spent on religious items, the average per family amounting to Rs. 115 per year. The developing consciousness regarding health had result-ed in a substantial expenditure of a family on medical services, which in the case of the group was Rs. 360 per annum. The average annual expenditure on social obligations which included donations, etc., was placed at Rs. 105. The expenditure, of a family on miscellaneous items like travelling, charges paid to dhobis, tailors, etc., was about Rs. 360 per annum.

The family possessions generally consisted of utensils, gold ornaments, jewellery in a few cases, costly clothing used occasion-ally, furniture, and other comforts and items of luxury like radio-sets, motor-cycles, electric watches, etc. The utensils of a family consisted of stainless steel, brass and copper utensils, and some of them possessed silver utensils as well. A family had on an average, ornaments worth Rs. 1,800.

The households of these families were well-equipped with costly furniture and a number of other luxury goods which were rarely seen before the last few decades. The common items of furniture were cupboards, sofa-sets, big mirrors, number of cots, etc. Items more commonly found were bicycle, time-piece, etc.

The total monthly expenditure of a family in this group on food-items was found to be about 14 per cent of the total income and 35 per cent of the total expenditure.

GROUP II

The annual income of a family in this group ranged between Rs. 1.800 and Rs. 4.200. The families in this group aspired for a better standard but could not afford it due to limitations of their income. Theirs was the class of miscibles as well as immis-cibles. Their dwellings were mostly small but clean and airy. Many of them had a radio-set, a fan and a steel cupboard.

A family from this group was composed of four adults and three minors making a total of 5.5 units. Of the fifty-six families surveyed from this group, 37 families, i.e., about 66 per cent had one earning member per family. The total number of earners in these families was eighty-one. More than 75 per cent of the families in this group followed a learned occupation as means of their livelihood.

Of the 56 families surveyed from this group, only 24 owned houses, valued at Rs. 1,06,600 in aggregate; only 18 families own-ed landed property, valued at Rs. 1,32,500, giving an average of Rs. 7,250 and 8 owned property in other forms, like cows, bullocks, valued at Rs. 785 in aggregate. Thirteen families owned both a house and landed property.

Of the eighteen families from this group who owned land, fifteen derived an annual income of Rs. 21,400 in aggregate from land; of the twenty-four families who had their own houses, five earned an annual rental income of Rs. 2,420, giving an average of Rs. 484 per annum per family. The total occupational income of all the families surveyed from this group was Rs. 1,65,348, giving the average occupational income of a family at Rs. 3,006 per annum. However, the approximate average annual income of a family in this group from all the sources Game to Rs. 4,900.

Out of the 56 families surveyed from this group, only 13 families saved in cash and 32 families in paper securities, insurance, bonds, provident fund, C. T. D., etc. Thirty-eight families indulged in borrowings which amounted to Rs. 33,265. The borrowings were resorted to through various sources like relatives, banks, money-lenders, co-operative societies, provident fund, etc., the main purpose being to meet unforeseen expenditure on household, or on agriculture, or for some business transactions.

A family from this group spent on an average Rs. 135 on food items; and Rs. 85 on non-food items. Of the total expenditure on food items, Rs. 75 were spent on cereals and pulses; Rs. 20 on ghee, cooking oil; Rs. 20 on vegetables (including non-vegetarian items like mutton, eggs, etc.): and Rs. 20 on milk and milk pro-ducts. The expenditure on cereals and pulses was thus the vital item of expenditure in the family budget accounting for 55 per cent of the expenditure on food items.

The monthly expenditure of a family on non-food items was less than that spent on food items. It comprised lighting Rs. 8; domestic servants Rs. 30; education Rs. 24; entertainment Rs. 5; and house rent Rs. 18.

The items which did not necessarily figure in the monthly expenditure bill of a family, were generally clothing, religion, medical facilities and social obligations. A family in this group spent annually about Rs. 360 on clothing; Rs. 65 on religion; Rs. 230 on medical account, Rs. 35 on social obligations; and Rs. 125 on miscellaneous items such as travelling, tailoring, laundering, etc.

The total average monthly expenditure of a family on food items was 33 per cent of the total income and 46 per cent of the total expenditure.

A family in this group though it could spend little on comforts, could spend practically nothing on luxury goods. A family on an average possessed utensils of copper and brass and a few of stainless steel. Their utensils were just enough to meet their daily and occasional requirements. Of the 56 families surveyed only 26 families possessed a few ornaments. The expensive clothing kept for ceremonial wear was rarely found in the households.

GROUP III

The families in this group with an income of less than Rs. 1,800 per annum generally stayed in one room tenements or huts constructed on the outskirts of the towns and villages. They just lived a hand to mouth existence and some times even satisfaction of their basic needs was beyond their means.

The survey included 68 families from this group. A family on an average was composed of four adults and three minors making a total of 5.5 units. There were 108 earning members in the 68 families surveyed.

Most of the families in this group were in debt and very few had savings in the form of provident fund, insurance, etc. The average occupational income of a family was placed around Rs. 1,360 a year. It was supplemented in case of only nine families by agricultural income which was not substantial. Of the families surveyed, 39 i.e., about 57 per cent were indebted to the extent of about Rs. 650 on an average. Their small incomes forced these families to contract loans to meet their day-to-day requirements.

The average monthly expenditure of a family in this group on food items came to Rs. 106 comprising cereals and pulses Rs. 68; oils, etc., Rs. 12; vegetables, mutton, eggs, etc., Rs. 15 and milk Rs. 11. Besides, these families on an average, spent Rs. 2 each on lighting and entertainment.

A family, on an average, spent about Rs. 120 on clothing, Rs. 12 on religious account and Rs. 60 on medical account every year.

A family in this group spent about 94 per cent of its income which accounted for 84 per cent of its expenditure on food items.

Thus with limited monetary resources at their command, the families in this group did not possess any furniture except a khat. Their bedding was also scanty. These families mostly used earthen pots for household purposes. The standard of literacy in this group was also very low as they could not afford the luxury of sending their children to schools when they could earn some-thing and help their parents. However, circumstances have recently improved as many families send their children to schools availing themselves of the free education facility provided by the Government to the families in this income group.

Comparison between the Three Groups.-The families in the first group generally stayed in the houses owned by them in the rural areas and occupied spacious airy tenements in urban areas. The families in the second group generally stayed in their own premises in rural areas and occupied smaller but well ventilated accommodations in urban areas. The families in the third group stayed in huts or in one room tenements.

The mode of apparel of the first as well as of the second group was the same with a slight difference in both the quality and quantity of the apparel used. The families in the first as well as the second group preferred quality clothes. The families in the first group possessed many sets of dresses which was not the case with the second. Families in both these income groups got their clothes stitched to their liking. However, it was altogether a different matter for the families in the third group. Their clothes were scanty and made of coarse cloth. The choice for entertainment of the families in the first and the third group also differed considerably, the choice of the first group being for cinema-shows and dramas against fairs and lokanatyas preferred by the third group.

Consumption of milk, to a great extent, was confined to the first and the second group and was a luxury for the third. Consumption of milk products was more common in the first group than in the other two.

The families in the first group spent about 14 per cent of their income on food items and 35 per cent of their total expenditure as against 92 per cent and 84 per cent, respectively, by the families in the third group. The corresponding figures for families in the second group were 33 per cent and 46 per cent.

On the basis of the study of standard of living of different classes of families in Germany, Ernest Engel propounded what is popularly known as Engel's Law of Consumption, incorporating the following conclusions: As income increases the percentage expenditure on food and other necessaries of life decreases and vice versa.

In keeping with the above economic law, the higher income group spent 20 per cent of their income and 54 per cent of their expenditure on food and other necessaries such as clothing. As against this the families in the second income group spent 45 per cent of their income and 58 per cent of their expenditure on food and other necessaries. The corresponding figures for families in the third group were 92 per cent and 84 per cent, respectively.

It will thus be seen that a family from the first income group consumed only 20 per cent of its income for food and other necessaries while a family from the third income group consumed 80 per cent of its income for food and other necessaries. The families in the first group could, therefore, afford a surplus for being utilised towards the consumption of articles of comforts and luxuries.

As against this the second income group spent 45 per cent of their income, and 52 per cent of their expenditure on necessaries. These figures were substantially higher as compared to the first group but positively lower in comparison to the third group. As regards literacy, the percentage of literacy in the first and second groups was higher than that in the third group. The lower percentage of literacy in the third group was mainly due to lower incomes.

In keeping with Engel's Law of Consumption the percentage of expenditure on clothing was approximately the same in the case of first and third income groups. It was 14 per cent in the case of the first income group whereas 13 per cent in the case of the third income group.

The composition of necessaries, comforts and luxuries also differed in respect of these three income groups. What 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. Similarly, an article of necessity for a family in the third group did not necessarily find place in the budget of a family in the first or second group.

Though the items that accounted for the family budget were same for the rural and urban areas, the differences in housing accommodations, the size of household and the literacy standards were bound to result in variations in the living standards of the respective area's. The following statement shows [District Censas Hand-book, Buldhana, 1961.] the proportions of sample households classified by size. Percentage proportions of different types of households are as follows:

'Among the different size groups, households with 4 to 6 members are common (44.33 per cent), than others. Single member and small size households are more (35.28 per cent) in urban areas than in rural areas (32.63 per cent). The average size of the household in the district is 4.86. It is 4.85 in rural areas and 4.92 in urban areas.'

The 1961 District Census Hand-book reveals the differences in housing conditions in rural and urban areas of the district.

'Classified by "owned" and "rented" categories 81 per cent of the dwellings in the district are owned and only 19 per cent are rented. The proportion of owned is higher (86 per cent) in rural areas but lower (54 per cent) in urban areas. Even this low proportion of 54 per cent for the urban areas in the district is higher than the average of 30 per cent for all the urban areas of Maharashtra. '

'Classified by the number of rooms occupied, 72.8 per cent households are occupying one-room dwellings and 18.3 per cent are occupying two-room dwellings. The households occupying larger number of rooms are more in urban areas than in rural areas. Average number of persons per room is 3.50 for total, 3.56 for rural, and 3.22 for urban areas.'

The literacy rates of the district have increased since 1951, but yet the differences in literacy percentage for rural and urban areas do exist.

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