How much money do we actually need?

A very poor family needs five times as much as they actually make, while even the best-off lower income group family finds a decent living just out of grasp.   | Photo Credit: Anupam Nath

How much money do Indians need to survive on? It’s a simple question, but one that gets asked rarely, so a small new sample survey has some valuable insights.

This is not a debate about the poverty line, which is set by the government by taking a basket of goods, and determining how much money a person would need to buy them. There are problems with the methodology, the consumption expenditure figures used to calculate it are criticised as being too low, and the line is quite universally accepted to be what P. Sainath describes as a ‘destitution line’ rather than a poverty line. Let’s leave the poverty line aside for now.

How much money do Indians themselves think that they need to survive on? The polling agency CVoter conducted a poll on the eve of the budget in late February, the results of which they shared with me. CVoter interviewed 1,942 randomly selected people and weighted the sample to India’s demographic and economic profile. This is a small sample, so I’ve discarded their state-level findings and am looking at the national-level ones only.

They asked people – how much money does a family of four need to survive? Here’s what they found

How does this relate to what they actually make at the moment? We asked CVoter’s managing director, Yashwant Deshmukh, how they defined the categories BPL, LIG, MIG and HIG. Families that make below Rs 4,000 a month are below the poverty line, those that make Rs 4,000-Rs 20,000 are from the lower income group, Rs 20,000-Rs 50,000 puts you in the middle income group and families that make more than half a lakh a month are high income.

How did CVoter arrive at this definition? “One can argue about the rationale behind these income groups; but you will agree that in absence of any official definition, in govt as well as in academic world, ‎there is hardly one can do anything about this,” Mr. Deshmukh told me. “What we have done to define these categories is pretty straight forward approach. Instead of defining these categories as per our understanding; we actually asked the respondents which category do they think they belong to. Do they think they are in LIG or MIG? Over many years, asking the same question, we tried to streamline these income groups as per the self-assessment of the respondents,” he said.

If we circle back for a minute to India’s official statistics, here’s what the National Sample Survey Office’s consumption classes for urban India look like, compared with what CVoter’s categories look like.

That out of the way, here’s the difference between people’s actual monthly incomes for a family of four, and what they think a family needs to survive, all from the CVoter survey.

Middle income groups and the rich make as much or more than they think a family needs to survive. A very poor family needs five times as much as they actually make, while even the best-off lower income group family finds a decent living just out of grasp.

This article is closed for comments.
Please Email the Editor

Printable version | Apr 20, 2021 8:36:45 PM |

Next Story