The Hindu : SCs, STs better off in urban areas, says study

Online edition of India's National Newspaper
Tuesday, Dec 30, 2003

National

National

SCs, STs better off in urban areas, says study

By Alok Mukherjee

NEW DELHI DEC. 29. A study by the National Council for Applied Economic Research (NCAER) has found that in terms of economic empowerment, the so-called "disadvantaged" groups of Scheduled Tribes and Scheduled Castes were relatively better off in the urban areas than in the rural ones.

According to the study, on an average, the income of an urban ST household was 2.22 times that of a rural ST household and it was 1.99 times higher in case of SC urban households as compared to the rural ones. The income of all "other" households in urban areas belonging to the higher castes was also 1.99 times the average income of their rural counterparts.

The study found that the ST households, on an average, earned higher incomes than SC households in both rural and urban areas. The rate of savings of an ST household in urban areas was the highest compared to all other castes. While the rate of savings in urban areas among households belonging to SCs and "other" castes was more or less the same, the income of households belonging to SCs, on average, was lower by 28 per cent of households belonging to the higher castes. "This shows that this disadvantaged group in urban areas makes extra efforts to save for the uncertain future by curtailing expenditure,'' the NCAER has said.

Economists with the Council feel that the reservation policies, along with better infrastructural facilities, in the urban areas probably contributed to an improvement in the general well being of the SC and ST households. However, the dominance of the households of "other" castes as regards income and savings was more pronounced in the rural areas. About 19 per cent of the total income and 15 per cent of the savings were generated by the households belonging to the SCs and STs, comprising 26.6 per cent of the total households in the country.

The NCAER, however, concedes that not much information is available on the income-savings profile of different socio-economic groups. In fact, the NCAER's Micro Impact of Macro and Adjustment Policies in India (MIMAP)-India survey is the only study that provides a caste-wise contribution of savings to the total household savings in the country. This survey is dated as it pertains to the 1994-95 period.

As per this survey, the distribution of households by per capita income and savings indicated a steady increase in per capita savings and the savings rate with the rise in per capita income. On an average, dissavings (negative savings) were reported by 28 per cent of the households with a per capita monthly income below Rs. 250 at the all-India level. Households with a threshold per capita monthly income of Rs. 250 to Rs. 300 reported a marginal savings rate of five per cent at the all-India level. This level of income in urban areas was not sufficient for the households to save and, in fact, led to a marginal dissaving, but in the rural areas a marginal positive rate of 6.5 per cent was reported.

The rate of savings at the higher levels of income in the rural areas was higher, compared to the corresponding levels in the urban areas, though the percentage of households in the higher income brackets was greater in the urban areas.

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