An Inquiry Into the Well Being of Indian Households

MIMAP-India Survey Report

A Brief Summary

The study of the micro impacts of macro and adjustment policies in India (MIMAP-India
Project) was initiated in 1994 to understand the transmission mechanisms from the structural
adjustment programme to the welfare of various strata of the population. One of the major
objectives of the nation-wide survey conducted under the project was to obtain income and
expenditure distributions in rural and urban areas by socio-economic categories of
households. The Survey was an attempt to help policy-makers identify the shares of gain or
loss of various occupational groups brought about by macro policies.

The analysis presented in this report is based on the data collected through in-field enquiries
from a scientifically chosen sample of around 5,000 households spread over rural and urban
India. Though the sample size is small, the non-sampling error has been reduced to the
minimal. The survey is a comprehensive investigation of the earning behaviour, consumption
patterns, savings habits, poverty levels, educational achievements, and the health status of
households. Each of these variables has been analysed in relation to six different occupational
household groups both in urban and rural areas. The population groupings are further
categorised by household income, consumption expenditure, level of poverty, education of
head of the household, etc. The findings of such cross-tabulations could measure the status of
the vulnerable population in terms of various socio-economic indicators and highlight policy
options.

Household income and its distribution is central to welfare analysis, in fact, to any economic
analysis. It determines the level and rate of saving in an economy which in turn determine the
rate of economic growth. Besides, at the cost of a little exaggeration it can be claimed that the
level and the distribution of income are the most important indicators of development.
However, except for a few household surveys conducted by the NCAER in late seventies, no
estimates of income distribution were available for both rural and urban areas; even the
estimates of total personal income published by the C.S.O. are derived as residual. Further,

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household dissaggregated savings data is available neither for rural nor for urban areas since
long.

Highly disaggregated data on household income, expenditure and savings were collected
through MIMAP Survey conducted in 1996 with reference to the agricultural year 1994-95.
This Report tries to fill the above mentioned gaps and gives the estimates at least for the
benchmark year of the total income and its distribution separately for rural and urban areas
and also for the entire country as well as by different occupational groups of households.
However, the data for education and health are collected for the year 1996.

NSSO estimates the item wise household consumption expenditure separately for rural and
urban areas. However, the MIMAP survey estimates of expenditure relate to the same
households from which the income data has also been collected. Based on these estimates of
income and expenditure, the estimates of savings for various household groups have been
obtained and presented in this report. Direct estimates of total households savings for the
country are not available, although the sector occupies a strategic position by the virtue of its
substantial contribution to domestic savings efforts. CSO prepares the estimates of physical
and financial saving by using the residual method i.e. by subtracting the saving of the private
corporate and government savings from the total savings. It may be added that according to
the CSO itself these estimates are not very reliable. This report also attempts to present the
various forms of savings by household groups in rural and urban areas based on data directly
collected on physical and financial investments.

The survey results should draw the attention of policy makers towards the existing rural-
urban disparities in income, expenditure and savings of households. The share of rural
households income was 56 % although their share in savings was 51 %. The MIMAP survey
revealed a marginal increase in income inequality at the all India level compared to the earlier
survey conducted in 1975-76 even though within rural and within urban inequalities are
almost constant. The urban households, on an average, earned an income which is 2.1 times
more then rural households in 1994-95 with average household savings 2.6 times more than
rural. Secondly and surprisingly, 64 % of the gross savings of the household sector originated
from only 9 % of the households which had a share of 28 % in the total income. A large
potential seems to exist for mobilizing savings through proper policy formulation.

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Like in most of the developing countries, occupation category wise poverty estimates are not
readily available in India. Apart from estimation of household category wise poverty ratios,
this report presents a profile of the poor and strategies for poverty alleviation. An attempt has
been made to estimate the incidence and depth of poverty and income/consumption inequality
among the poor at household group level separately for rural and urban areas.

Education offers the greatest opportunity for employment and economic returns and thus
reduces poverty. These issues are, especially, important for the developing countries where it
is well documented that education achieves reduction in poverty and equitable distribution of
education has the largest impact on growth. The first objective of this report is to document
the progress of education in India by comparing all the alternative data sources. It takes stock
of the current conditions as well explores options for future developments in the educational
sector. This report presents a detailed educational profile of both rural and urban people in
India. The second objective of this report is to examine the educational levels of the people
and interaction with the levels of living and also the impact of macro and meso-policies on
the educational attainment of the people. It tries to clarify a number of issues facing the
educational sector in India. This report documents some new evidence about the reasons for
low enrolment and high drop out rates. For example, the survey evidence shows that just lack
of interest on the part of both child and parent is the major reason for high drop out and low
enrolment rates. This will help policy makers understand better what lies behind the
differences in the educational attainment.

Despite having achieved economic growth to a considerable extent, the nation continues to
lag behind in health performance as compared to many other developing countries. Having
gone through a period of health transition, India is far away from its objective of attaining
better health as one-third of its population is poor, illiterate, malnourished and without proper
health facilities. However, there is an improvement in the health status since Independence
due to a shift in focus from family welfare programmes to maternal and child health. The
introduction of schemes like Universal Immunization Programmes (UIP), other programmes
such as Child Survival and Safe Motherhood (CSSM), Integrated Child Development
Services (ICDS), and their emphasis on poor and vulnerable sections has improved the health
of mothers and children. But, it is evident that progress in health indicators has been slow.
This is due to an array of factors such as widespread poverty, and lower education and
income levels. This report in some sense attempts to study the relationship between morbidity

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prevalence, cost of treatment and utilization of health care facilities at the population group
level. The differentials in prevalence and treatment of illness, cost and source of treatment,
access to basic amenities, and utilization of mother and child care facilities and welfare
schemes by population categories are analyzed to provide policy options in favour of the
vulnerable groups.

The estimates of income, expenditure, savings, poverty and other social sector indicators
have been as far as feasible validated with other directly or indirectly available estimates. The
estimates of per capita income were also validated with the corresponding estimates available
from other surveys conducted in this regard. For example, it is quite interesting to note that
estimates of consumption expenditure based on this survey were higher than those estimated
by the NSSO, but about 15 % lower than those of the NAS. It may be mentioned here that the
estimates given by the NAS are inclusive of the expenditure of non-profit institutes serving
households, for which no independent estimates are available.

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An Inquiry into the Well Being of Indian Households
MIMAP-India Survey Report

Contents

Volume-I

Chapter

1 Introduction
1.1 The Problem
1.2 Focus of the Study
1.3 MIMAP and Other Surveys: A Comparison
1.4 Limitations of the Survey

Chapter Methodology of Survey: Sample Design,

2
Concepts and Definitions

2.1 Sample
2.2 Concepts and Definitions

Chapter

3
Household Income and Its Distribution

3.1 Introduction
3.2 Average Household and Per Capita Income
3.3 Income Inequalities
3.4 Factors Influencing Income
References

5
 Chapter
Consumption Patterns and Household Welfare
4
4.1 Introduction
4.2 Estimates of Consumption Expenditure
4.3 Rural-Urban Distribution of Consumption Expenditure Across
Income and Occupational Groups
4.4 Consumption Patterns Across Various Population Groups
4.5 Per Capita Consumption and Social Attainments
4.6 Adjustment And Food Security
References

Chapter
Savings and Investment Behaviour of Households
5
5.1 Introduction
5.2 Data Base and Methodology
5.3 Empirical Findings
5.4 Factors Influencing Savings
5.5 Investment
References

Chapter

6 Poverty and Vulnerability

6.1 Introduction
6.2 Poverty Line and Incidence of Poverty
6.3 Poverty and Income Growth
6.4 The Data
6.5 Estimates of Parameters Related to Poverty from MIMAP-India
Survey
6.6 Characteristics of The Poor
6.7 Comparison of Poverty Estimates based on MIMAP-India Study
with other estimates
6.8 Poverty Alleviation Strategy
Appendix to Chapter 6
References

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 Chapter

7 Education and the Levels of Living

7.1 Introduction
7.2 Definitions and Data Sources
7.3 Educational Performance: An International Comparison
7.4 Education in India: A Review
7.5 The Current State of Education: Survey Evidence
7.6 Some Demand Inducing Issues : Education based Welfare Programs
References

Chapter

8 Morbidity Prevalence, Cost of Treatment and

Utilization of Health Care Facilities

8.1 Introduction
8.2 Public Expenditure and Health Status
8.3 Prevalence of Morbidity
8.4 Source of Treatment of Illness
8.5 Household Expenditure on Treatment
8.6 Utilization of Maternal and Child Health Care Facilities
8.7 Basic Amenities and Utilization of Welfare Programmes
8.8 Conclusion and Implications
References

Chapter

9 Summary & Conclusions

Volume-II
Appendix Tables