PROSPEROUS INDIA 26

Earning for others is a distinct feature of Indian economy

 The Indian tradition enjoins the householder to earn for the families and maintain them with   care.  Arthashastra notes that the dharma of the householder is to sacrifice his own pleasures for the sake of those dependent on him. Hence abandoning a dependent, without a valid reason, is considered a serious offence. It gives examples in this connection:  a husband abandoning his wife, a father his son, a brother his sister, a maternal uncle his nephew and so on. 

The idea behind this system is the duty based approach of life as evolved by the Indian culture.  A crucial point to note here is that the householders are not allowed to entertain a feeling as to why they alone should earn money for all the others in the family. They have to do it as it is their duty, in the same way their children have to look after them when the householders become old. So, even while the householders have to take up the full responsibility for working and earning, their earnings have to be used for the benefit of all the members in the family. Besides, occasions might necessitate a part of the earnings being used for causes outside the needs of the immediate family.

Hence the culture of earning for others dominates the Indian lives even today. National Council for Applied Economic Research (NCAER) conducted the National Survey of Household Income and Expenditure with 2004-05 as the reference year. It was conducted across the country in both the rural and urban areas, covering different segments of the population in terms of occupation, education and income. The survey notes that only around 28.1 per cent of the population in the country is engaged in one or the other financially remunerative activities. It reveals the number of earners per household as 1.4. Please see Table 1 for the details relating to the Indian households and the earners

Table 1:  Estimates of households and population (2004-05)  

	Rural	Urban	All India
Households ( crore)	14.45	6.14	20.59
Population ( crore )	73.2	29.5	102.7
Household size	5.08	4.81	5.00
Number of earners per household	1.43	1.34	1.4

Note: Original figures in millions for population and households converted in to crores by the author for easy understanding.  

Further analysis of the survey shows that in more than two thirds of the Indian households only one member earns for the entire family. In 68.8 per cent of households in the country there is only one earning member. It means that in all these cases one person earns money for the entire family, with the rest depending on him/her. While 23.7 per cent of households have two earning members, there are 7.5 per cent households with more than two members who earn.  This shows that a great majority of the population is dependent on the income of one or more persons who earn for the family.  The survey also notes that 17 per cent of the women earn income working outside.   

Table 2 presents figures relating to the household income and expenditure from the survey for further understanding. 

Table 2: Household income and expenditure estimates (2004-05)

(Amount in Rupees)

	Rural Areas	Urban Areas	All India
Household income	51,922	95,827	65,041
Household expenditure	40,124	68,352	48,558
Income over expenditure	11,798	27,475	16,483
Investments	4,103	9,763	5,795
Cash saving	7,694	17,706	10,688
Percentage of income saved	22.7	28.7	25.3
Percentage of cash saving	14.8	18.5	16.4

Note: All the above figures are for the year.

The table shows that people prefer to keep more of the amount earned in the form of cash and deposits in banks. Further details show that the regular salary/ wage earners and self-employed people in the urban areas and the agriculturists in rural areas earn comparatively more returns, than those engaged in the other types of activities.

When it comes to saving the hard earned incomes, the NCAER survey notes that the earners give priority to the interests of the family, before allotting a share for their future.  It says that 83 per cent of the households save for emergencies and 81 per cent for the education of children. Saving for the old age of the earners, as financial security, is only their third priority (69 per cent). The next important reason for saving is again the family and the relations. 63 per cent of households save for weddings, births, social events and ceremonies. While 47 per cent households save for business expansion, 43 per cent save for construction and purchase of the house. 22 percent save for the purchase of consumer durables, while 18 per cent save for making gifts and donations, and undertaking pilgrimages to places of worship. 

Field level studies emphasize that almost all the earning members consider family as the single most important concern in their lives. They further note that their lives would be fulfilled if they could keep the family members happy. The financial security of the family and the future of their children are the two most important objectives of earning and saving. It would be interesting to note that even in the case of the second-income earners, the objectives remain the same. In a study conducted among the lady college teachers in Coimbatore, 60 per cent of the respondents ranked bank deposits as their most preferred avenue for investments, while another 35 per cent rated it as their second best preference, due to the safety provided by the bank deposits. More than two third of them gave the least preference to stock market investments, though they have studied and were engaged in teaching finance subjects, as they do not want to invest their earnings in risky avenues.   

It is significant to know that even while making long term investments, the householder- earners prefer buying assets in the names of family members. In a study of 279 respondents comprising of the school/ college teachers and doctors in Coimbatore city, 60 per cent of them noted that they preferred to buy assets in the names of their spouses, children, parents and even grandparents. It is important to note that a large number of people make investments in the names of their family members, instead of doing it in their own names, though the money was earned by them, as the earners believe that their earnings belong to all in the family.  

Studies on different business clusters indicate that invariably the families of the promoters contribute the maximum amount for initial investments. In most cases, the relatives and friends also lend a helping hand. A sample study conducted among the diamond exporters of Patel community in Surat and Ahmedabad showed that all of them were helped by their relatives, when they mobilized funds for their businesses during the initial periods. In about 89 per cent of the cases, such support exceeded more than 20 per cent of the initial capital invested in business. It means that people provide funds willingly to their relatives for promoting businesses.

Hence the studies reveal that even today the Indian tradition of earning and saving for others continues without interruption. This is a remarkable quality that keeps the Indian family system intact. It is also a distinct feature of India that makes the economy to move forward with confidence, proving to the world that the culture of this land plays a crucial role in matters related to economic development.   

References:  

1.      Rajesh Shukla, How India Earns, Spends and Saves - Unmasking the Real India, Sage Publications India Private Ltd. and National Council of Applied Economic Research, New Delhi, 2010

2.      P.Kanagasabapathi and U.Amantha Nancy, ‘ A study on the savings, investment and consumption pattern of women academicians’, Unpublished Report, P.S.G. College of Technology, Coimbatore, 2007

3.      P.Kanagasabapathi and M. Anitha Gayathri, ‘ A study on identification of spending and investment pattern of working people in Coimbatore city’, Unpublished Report, P.S.G. College of Technology, Coimbatore, 2004

4.      Sharad Patel and P. Kanagasabapathi, ‘A study of Gujarat diamond export industry’, Unpublished Report, P.S.G. Institute of Management, Coimbatore, 2005

( Yuva Bharati, Vol.40 No.4, Vivekananda Kendra, Chennai)