Lessons from rising living standards in rural India

The last thirty years have seen rapid economic and social change in India. Faster economic growth has been accompanied by reports of substantial reductions in poverty. But concerns remain that some regions and groups of people living in poverty have been left out. Understanding how and why people’s living standards change over time is important for identifying routes out of poverty and useful policy interventions.

Research from the ChronicPoverty Research Centre, in the UK, examines changes in living conditions insix villages in India. These were originally surveyed between 1975 and 1984,and updated with data collected since 2001. The research focuses on 240households from six villages in three districts: MahbubnagarDistrict in the state of Andhra Pradesh, and SholapurDistrict and Akola District in Maharashtra.

The researchers found thatthe households surveyed had experienced substantial improvements in wealth andliving conditions over the last three decades. Indicators of both monetarywelfare (such as income, assets, household spending and poverty) andnon-monetary indicators of wellbeing (such as literacy, education, nutritionand health) have gone up considerably in the period studied.

However, the researchersfound marked differences among the villages. Incomes and household spendinggrew faster in the Mahbubnagar villages in AndhraPradesh than in the villages in Maharashtra.While poverty declined in all villages surveyed, it decreased the most in the Mahbubnagar villages.

Other key findings include:

• 83 percent ofvillagers interviewed considered themselves either able to ‘get by’,comfortable or rich in 2005, up from 44 percent thirty years previously.
• By 2001, 32percent of the original sample of villagers studied had emigrated for work,marriage or other family reasons.
• Emigrants weretypically better off than people who stayed in their villages, although theymay have been better off to start with, rather than because of their migration.
• Higher householdspending is linked to high literacy in the household in the first surveyperiod.
• Higher householdspending is also linked to the presence of children (especially boys) in thehousehold.
• Poverty levelshave gone down faster amongst lower caste groups in the Mahbubnagarvillages in Andhra Pradesh.

These findings provide an insightinto some of the changes affecting rural India, and are more revealing thannational level statistics for economic growth. More people are migrating out oftheir communities to look for work and, amongst those who have stayed in thevillages, many have moved away from farming to activities such as business andservice provision.

More work is needed tounderstand:

• the role ofmigration in the changing living standards of those who leave their communities
• the relative roleof farming and non-farm jobs in rural areas in this period of transformation
• how and why lower caste groups in Andhra Pradesh managedto take advantage of opportunities.