The writing on the wall

Sumit Patil barely has the time to think of any parallels as he shuttles long-distance from his village, Tara in Maharashtra's Raigad district, to Nerul in Mumbai every day. He hardly minds the journey of 50 km to his new office in the big city, where he has been recruited to sell SIM cards for Uninor, a new player in the telecom services market.

But, in many ways, 20-year-old Patil reflects the changing face of the country as it shifts gears from being a largely agriculture-dependent nation that has more poor and aspiring classes than the rich. Not too long ago, Patil's grandparents worked as farm hands, but life took a slightly different turn when his father was recruited as a messenger in a local school.

That opened the doors not just to a new source of income but offered the Patil family a peep into what could be - and how life could change with education. "I studied till class 12, but then I was fascinated with gadgets - especially computers and mobiles," he says. It is almost as if the gods heard him, because the government sponsored a basic computer course for those living below the poverty line. As a result, Patil got to lay his hands on a computer for the first time around two years ago. "Then I heard from my village friends that NIS was seeking to recruit local youth for jobs, and I volunteered and have been placed in a profession that deals with things that I am interested in," he says.

In India, market research often tends to miss out on such nuances by going for the basic data - data that is thinly stretched over a highly varied people and geography. This is where How India Earns, Spends and Saves: Unmasking the Real India, written by Rajesh Shukla, Director, NCAER-Centre for Macro Consumer Research (CMCR) becomes relevant.

Shukla's book is not an entirely novel effort, as it draws inspiration from the similarly titled 2007 report by Max New York Life and NCAER. But it is unique in the way it captures the nuances, exploring the factors that determine a household's income and so its earning and spending patterns in today's world.

The first big alert is the way in which it nails how pure-play agriculture is no longer a heavyweight in the Indian economy. Out of India's 205.6 million households, 82.3 million are self-employed - in farming, fishing, hunting and allied activities. Then, 45.6 million households are involved in production related work or jobs pertaining to transportation.

According to the book, these two household segments have an average annual income of Rs 48,000 each while households engaged in salesrelated work number 25.9 million and have an average annual income Rs 86,409. But the top earning segment comprising 5.9 million households is employed in administrative, executive and managerial jobs with an average annual income of Rs 169,317.

Education and technical or vocational training are clearly the key to growth. Though the impact, as Shukla points out, is felt only when this is combined with opportunity, as it is in Patil's case. Patil and his family don't know about data and nuances, but they are enjoying the results. "My father was so convinced about what education can do for progress that he too studied for his 12th exam and cleared it two years ago," says Patil. His father had to leave school in class V to support his family. Now, Patil's younger brother wants to be a graduate. "He is more academically inclined," says Patil.

The good news is that, for the first time, the number of high income households was projected to exceed the number of poor in 2009-10. At the same time, over five million middle-income households will move into the high income bracket. So, all the growth cues are in place. But most of us think in terms of certainties, and the book works on an estimate of 8.7 per cent growth up to 2015 at 2004-05 prices.

"In reality, most consumers are financially vulnerable. A quarter of them have loans outstanding. In case of a major drop in income, there is lack of sufficient savings to sustain them for a year," points out Rama Bijapurkar, Chairperson, NCAER-CMCR. Yet, the book points out that more than half the Indian households (54 per cent) are confident about their current and future stability. "Inflation? Yes, but now I am working hard and wish to own a car soon," says Patil.