The standard of living has improved in rural India and it needs to be sustained
As per the NITI Aayog's multi-dimensional poverty index 2021, 32.7% of the population in rural India is multidimensionally poor compared to 8.8% of the population in urban India. Between NFHS-4 (2015-16) and NFHS-5 (2020-21), standard of living in rural areas has improved, but data driven monitoring is needed to sustain it.
Biswaranjan Baraj 6 May 2022 9:10 AM GMT
The achievement of better standard of living in rural India, which has around two-thirds of India's population, is imperative to achieve inclusive and balanced growth of India.
As per the multi-dimensional poverty index (MPI) 2021 developed by the Indian Government's NITI Aayog, which uses National Family Health Survey-4 (NFHS-4) data of 2015-16, rural India has 32.7 per cent population that is multidimensionally poor. This is much more than urban areas where 8.8 per cent population is multidimensionally poor.
MPI 2021 uses indicators under health, education and standard of living dimensions. In MPI index, indicators under standard of living include cooking fuel, sanitation, drinking water, electricity, housing, assets and bank account. MPI provides a good platform to understand multidimensional poverty in both rural and urban areas with standard of living as one core dimension of measurement.
Since Independence, providing better access to essential services to achieve better standard of living has been part of the key agenda of each successive governments. A quick look at the Government of India's current programme reflects the standard of living in rural areas came into prominence in government policies with the implementation of some landmark Government programme like Pradhan Mantri Sahaj Bijli Har Ghar Yojana - Saubhagya to provide access to electricity, Swach Bharat Mission to provide better access to sanitation, Pradhan Mantri Ujjwala Scheme for more use of clean fuel, PM Jan Dhan Yojana to open bank accounts, and Jal Jeevan Mission to provide safe drinking water.
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Standard of living improvement in rural areas
A glance at the status of selected key indicators of standard of living depicts the improvements happened during past five years between NFHS-4 of 2015-16 and NFHS-5 of 2020-21.
Analysis of few key selected indicators of standard of living reflects the percentage of households using clean fuel for cooking (LPG) and improved sanitation facility has nearly doubled and also there is good improvement in the percentage of households with electricity and improved drinking water source during the past five years (see graph: Status of key indicators of standard of living in rural areas).
Sustainability to be the key focus
There is no doubt rural development agenda has been and would continue to be of focus in the Indian government's policies. The government is trying to provide services at the grassroots level and it is also providing more information about services using digital means.
But, the next question is whether the status of standard of living in rural India can be sustained in the long run.
There are many factors which determine the use of services like easy availability and access to use and awareness about the services and affordability to use, as various studies suggest.
The next important factor determining use of services and to sustain the use is its affordability, which is linked to both price of service and the economic status of rural population. For example, while electricity connections and LPG cylinders for clean fuel for cooking have been provided to households through government programme, in the long run, if people cannot afford to pay monthly bill for electricity consumption or to buy LPG cylinder, then use of these services by economically backward sections might be a challenge.
As per the National Sample Survey Organisation (NSSO) report on Land and Livestock Holdings of Households and Situation Assessment of Agricultural Households (SAS), 2021, the average monthly income per agricultural households, as per paid out expenses approach, works out to be Rs 10,218. As most of rural households are dependent on agriculture, low income from agriculture raises the question of affordability issue to sustain the use of current essential services. This warrants to make the services affordable for long-term sustainability of standard of living, and policy focus on affordability is more important than ever before in the COVID situation and rising inflation.
Data driven timely monitoring
The momentum of progress should not be decelerated because of temporary shocks like the impact of COVID situation. The status of use of rural services should be monitored periodically to assess progress with timely collection of reliable data and analysis of data.
Therefore, a structured timely data driven monitoring mechanism with clear-cut institutional accountability and partnerships at various levels starting from central level to gram panchayat level would be helpful to see the progress and to take timely steps to ensure all the households are using the services to maintain desired standard of living.
The analysis of progress during past five years based on NFHS-4 and NFHS-5 data shows there has been inspiring progress of standard of living in rural areas. The affordability to use these services by economically disadvantaged sections of society in the long run might be a risk and the risk has increased now because of COVID situation impacting the livelihood and health of people and because of the recent rising inflation.
Thus, policy needs multiple priorities at the same time to make the services affordable and within the reach of all the people.
The Government, both central and state governments, have already been undertaking various policy interventions. A structured timely data driven monitoring mechanism with timely collection of reliable data, institutional accountability and partnerships at various levels and timely steps based on insights from the data would be helpful to ensure and sustain the pace of the progress in achieving better standard of living in the rural areas of India.
Biswaranjan Baraj is a senior development professional working on the issues of social and economic development, public policy and sustainability. He is working as AVP, Research with Sambodhi Research and Communications. Views are personal.