Report No. 463(55/1.0/5) Sources of Household Income in India 1999-2000 NSS 55th Round July 1999- June 2000 National Sample Survey Organisation Ministry of Statistics & Programme Implementation Government of India August 2001 PREFACE The National Sample Survey Organisation (NSSO) has been carrying out all- India household surveys on Consumer Expenditure and Employment & Unemployment with a large sample usually once in every five years. The sixth such survey was conducted in the 55th round (July 1999-June 2000) - which covered Non- agricultural Enterprises in the Informal Sector in addition. The schedule of enquiry on Consumer Expenditure for the survey was, more or less, similar to that adopted in previous quinquennial rounds. The present report is the fifth in the series of reports through which the results on consumer expenditure survey are being released. In this report, an attempt has been made to study the differences of various sources of household income over social groups and household occupation types. The sources of income considered for the purpose are: cultivation, fishing/other agricultural enterprises, wage/salaried employment, non-agricultural enterprise, pension, rent, remittances, interest and dividends, and others. This report has four sections and one appendix. Section 1 of the report is introductory while Section 2 presents Sample Design and Estimation Procedure. Section 3 gives Concepts and Definitions. Section 4 discusses Survey Findings. The detailed tables are provided in the Appendix. The Field Operations Division (FOD) of the Organisation conducted the fieldwork for the survey. The collected data were processed and tabulated by the Data Processing Division (DPD) of the NSSO. The Survey Design & Research Division (SDRD) of the NSSO developed the survey design and prepared the report. I am grateful to the Chairman and members of the Governing Council, Heads of various Divisions of the NSSO and their colleagues for the contribution made in preparing the report. Comments/suggestions from the readers will be most welcome. New Delhi N. S. Sastry August 2001 Director General & Chief Executive Officer National Sample Survey Organisation NSS Report No. 463: Sources of Household Income in India, 1999-2000 Contents Section 1 Introduction 1 Section 2 Sample Design and Estimation Procedure 3 Section 3 Concepts and Definitions 10 Section 4 Summary of Findings 14 Appendix Detailed tables Table 1R Number per 1000 of households reporting receipt of income A-1 from different sources during the period of last 365 days by household type and by State/UT – rural Table 1U Number per 1000 of households reporting receipt of income A-18 from different sources during the period of last 365 days by household type and by State/UT – urban Table 2R Distribution of households reporting each source of income A-35 over MPCE classes, along with average MPCE, by State/UT – rural Table 2U Number per 1000 of households reporting receipt of income A-52 during a period of 365 days from different sources by MPCE class – urban Table 3R Distribution of households receiving income from different A-69 combinations of sources by MPCE class, separately by State/UT – rural Table 3U Distribution of households receiving income from different A-80 combinations of sources by MPCE class separately by State/UT – urban Table 4R Number per 1000 of households reporting each source of A-91 income during the period of last 365 days belonging to different social groups, by State/UT – rural Table 4U Number per 1000 of households reporting each source of A-102 income during the period of last 365 days belonging to different social groups by State/UT - urban Table 5R Distributions of households with specified sources of income A-113 by size class of land possessed - rural Highlights · In rural India, the percentage of households reporting income received from ‘cultivation’ and ‘fishing/other agricultural enterprises’ dropped during the period 1987-2000. · In rural India, the proportion of households reporting income from pension, remittances, and interest and dividends was relatively high for household type “others”. The proportion of households reporting income from ‘pension’ or ‘interest and dividends’ was found to be the lowest for household type “agricultural labour”. · In rural India, the proportion of households reporting income from pension, rent, remittances and interest and dividends was generally higher for the upper MPCE classes and for social group ‘others’. · In urban India, the proportion of households reporting income from ‘pension’ or ‘interest and dividends’ was the lowest for casual labour households. The proportion of households reporting income from ‘pension’ or ‘remittances’ was by far the highest for household type ‘others’. · In rural India, for the combination of sources of income - both rent and non-agricultural enterprises - the percentage of households reporting such combination increased over the MPCE classes. · In rural India, those households which received income from cultivation had by far the highest average area of land possessed. · In the rural areas of major States, cultivation was the predominant source of income in Rajasthan (787 out of 1000), followed by Uttar Pradesh and Madhya Pradesh. The proportion of households reporting income from fishing/other agricultural enterprises was the highest (597 out of 1000) in Kerala. In the urban sector also, Kerala showed the highest proportion of households under fishing/other agricultural enterprises (475 out of 1000). ‘Remittances’ was reported by relatively large proportions of households in Kerala (22%) and Bihar (12%). Section 1 Introduction 1.0 During its quinquennial surveys of household consumer expenditure1 and employment- unemploment, the National Sample Survey Organisation2 collects some information on sources of income of rural and urban households throughout the country. The summary of such information from NSS 55th round are presented in this report. During the survey, the household consumer expenditure schedule was canvassed in 120309 households located in 6046 villages and 4116 urban blocks. This report is the fifth of a series of reports through which the findings of the survey are being released. 1 Household consumer expenditure survey: It was originally the practice to collect data on household consumer expenditure in every round of NSS, starting from the very first round (1950-51). From 1972-73, according to a decision of the Governing Council of NSSO, the consumer expenditure survey became a quinquennial feature. It was also integrated with the employment and unemployment survey in the sense that a common sample of households was subjected to both the enquiries. An annual series of smaller-scale consumer expenditure surveys was again launched from the 42nd round (1986-87) to fill the data gaps which planners and researchers had begun to feel. It is the larger-scale quinquennial surveys, however, which are expected to be more useful for the study of trends in the level of consumer expenditure and of the emergence of new spending patterns. The six quinquennial surveys of consumer expenditure have been those of the 27th, 32nd, 38th, 43rd, 50th and 55th rounds of NSS. They relate, respectively, to the years 1972-73, 1977-78, 1983, 1987-88, 1993-94 and 1999-2000. 2 The National Sample Survey: The NSS was set up in 1950, with the idea of having a permanent survey organisation to collect data on various facets of the economy through nationwide sample surveys in order to assist in socio-economic planning and policy-making. The NSS is a continuing survey in the sense that it is carried out in the form of successive "rounds", each round usually of a year's duration covering several topics of current interest in a specific survey period. At present each NSS round reaches, at the all-India level, about 12,000 to 14,000 villages and blocks in the Central sample (covered by the Central agency NSSO) and an independent sample of about 14,000 to 16,000 villages and blocks in the State sample (covered by the Governments of various states and union territories). The entire area of the country - rural and urban - is covered, with the exception of some interior areas of Nagaland and Andaman & Nicobar Islands, and Ladakh and Kargil districts of Jammu & Kashmir. NSS Report No. 463: Sources of Household Income in India, 1999-2000 1 1.1 Quantitative data on household income are at present not collected in NSS household surveys because of the difficulty of getting reliable data on the subject through direct enquiries. However, no obstacles are encountered in ascertaining whether or not a sample household received any income during the last year from cultivation, wage/salaried employment, pension, etc. Such information, though admittedly ineffective in gauging the extent of dependence of the population on particular sources of income, can give a reasonably good idea of differences in the sources of income earned in different regions of the country. If collected at regular intervals, it can also indicate trends in the pattern of income receipts over time. Because of the readiness with which households provide such data and the non-existence of measurement problems, estimates of proportions of households earning income from each source are presumed to be free from non-sampling errors to a large extent. 1.2 Income sources can be classified into income accruing from economic activity and income accruing otherwise. The latter includes income from rent, pension, remittances, interest and dividends. Economic activity includes wage/ salaried employment (regular or casual) and household enterprise. The nine sources considered in this survey were: wage/ salaried employment, three types of enterprise income coming from cultivation, fishing or other agricultural enterprise, and non- agricultural enterprise, and non-gainful incomes, namely, pension, remittances, rent, interest and dividends, and “other sources”. 1.3 Households were also classified in the survey into four or five occupational types and three social groups, and estimates of proportion of households receiving income from any source were generated separately.