Indicus Analytics, An Economics Research Firm

http://indicus.net/

India 2010 to 2020

December 28, 2009

Indicus Analytics

Brief

This assessment study looks at how various economic and demographic parameters are evolving. It predicts
conditions in India by 2020 if these trends continue to move in the 2010s the same manner as they have been over
the 2000s. This is not a general equilibrium analysis and takes a sector by sector and area by area approach.
However, without making any strong assumptions about the future, we are fairly confident that conditions by 2020
will not be very different from that revealed in the following pages.

Table of Contents

Trend Growth: Economic Growth in the 2010s...........................................................................................................................................3

Household Consumption..............................................................................................................................................................................7
Expenditure of Households: Food .............................................................................................................................................................9
Expenditure of Households: Services .......................................................................................................................................................11
Consumer Durables Penetration Rates (%)................................................................................................................................................13
Energy Consumption.................................................................................................................................................................................14
Consumption of Agriculture Commodities................................................................................................................................................15
Poverty.......................................................................................................................................................................................................16
Additional Employment Generation (millions)........................................................................................................................................18
Fastest Growing Non-Agri Occupations in the 2010s (millions)..............................................................................................................20
Urbanization...............................................................................................................................................................................................22
Income Distribution...................................................................................................................................................................................23
Education Profile.......................................................................................................................................................................................29
India 2020: Indicus Analytics 2
Trend Growth: Economic Growth in the 2010s

Year Agricult Mining Manufac Electrici Constru Trade, Transpo Financing Commun Gross
ure, & t-uring ty, Gas c-tion Hotels & rt, , ity, Domest
Forestry Quarryin & Water Restaur Storage Insurance Social & ic
& g Supply ant & , Real Personal Produc
Fishing Commu Estate & Services t At
nication Business Factor
Services Cost
1980s 2.97% 7.39% 5.95% 8.76% 3.73% 5.89% 6.00% 9.26% 6.23% 5.17%
1990s 3.34% 4.41% 6.91% 7.30% 4.84% 8.51% 7.86% 7.95% 6.50% 6.05%
2000s 3.38% 5.61% 8.26% 5.12% 11.60% 9.35% 15.26% 9.82% 5.96% 8.13%
2010s 3.39% 5.61% 8.28% 5.12% 11.60% 9.39% 16.22% 10.13% 6.20% 9.62%
Source: District Domestic Product of India, 2009-10, Indicus Analytics.

The trends of the 2000s will continue – but growth will be much faster – Agriculture investment will finally resume
after many decades of relative sparseness, but this sector could well grow much faster than the expected 3.4% - a
rural road network has been built up, high agri commodity prices would improve terms of trade towards this sector,
rural human capital has improved tremendously in the 2000s, new technologies are about to enter on a mass scale,
agri reforms such as the APMC acts are being overhauled. However, we would need to wait till the 2020s for the full
impact of these changes to be felt – for the time being agriculture (including forestry and fishing) would barely
sustain its 3.4% growth. Manufacturing opportunities would improve on account of rapidly growing domestic market
as well as international markets – however energy and wage price inflation will play a role. The labour problem has
not been solved yet, and expect a resurgence in labour unrest in 2010s. Transport, storage and communications
will be the driving force of growth in the country in the 2010s – A large road network is going to be operational, ports
are rapidly improving, air transport infrastructure is being overhauled, and most important, a strong ecosystem has
been created for the telecom sector.

Overall GDP growth will be around 9.6% annually, even if the government does not do anything. It would be higher
if agriculture and electricity, gas and water supply are able to break through theior long term institutional
constraints. It would be lower if inflation eats into macro-economic stability and law and order conditions get out of
hand.

India 2020: Indicus Analytics 3

Methodology: GDP growth at the sub-sectoral level estimated across ten year periods. Trend growth rates used to
estimate sub-sectoral GDP for 2010s and added up to achieve sectoral and overall estimate. The growth rates at
sectoral and total GDP are then derived. For telecommunication the annual sub-sectoral growth of 25% was reduced
to 20%.

India 2020: Indicus Analytics 4

Economic Structure: An even more of a services economy
Year 2009- 2019-
10* 10*
Agriculture, Forestry & 16.1% 9.0%
Fishing
Mining & Quarrying 1.8% 1.3%

100% Manufacturing
Electricity, Gas &
Water Supply
15.1%
1.9%
13.5%
1.2%

Construction 7.3% 8.9%

Trade, Hotels & 16.1% 15.9%
Restaurant
Transport, Storage & 14.1% 25.2%
Communication
Financing, Insurance, 15.0% 15.8%
Real Estate & Business
Services

90% Community, Social &

Personal Services
Gross Domestic
12.5%

100.0
9.2%

100.0
Product At Factor Cost % %
Source: District Domestic Product of
Agriculture will become a far smaller part of the economy, and will India, 2009-10, Indicus Analytics.
finally account for less than 10% of the Indian economy. Together –
agriculture, mining and manufacturing would account for barely 25% of the GDP – services would be three fourths of
the Indian economy. The utilities (electricity, gas and water supply) will grow but not that much; the momentum has
just not been generated yet. Some electricity projects will go on stream, some gas pipelines will get extended, and
some water related projects will be instituted - but this growing economy will become thirstier for energy and water.
This will continue to constrain manufacturing growth. But a combination of investment in the 2000s, reforms,

80%
technology improvements, and an institutional structure have been put up in the 2000s for the transport and
communication sectors. This sector will drive the Indian economy in the 2010s. Even without any further reforms,
the stage is set, the tipping point reached.

Methodology: GDP growth at the sub-sectoral level estimated across ten year periods. Trend growth rates used to
estimate sub-sectoral GDP for 2010s and added up to achieve sectoral and overall estimate. The growth rates at

India 2020: Indicus Analytics 5

70%
sectoral and total GDP are then derived. For telecommunication the annual sub-sectoral growth of 25% was reduced
to 20%. The sectoral shares are then estimated.

India 2020: Indicus Analytics 6

Household Consumption

Growth
in Growth in Multipl 2000- 2009- 2019-
2000s 2010s e 01 10 20
40.6 34.2
Food, Beverages & Tobacco 4.1% 6.4% 1.8 48.2% % %
Clothing & Footwear 4.7% 6.0% 1.8 5.9% 5.0% 4.1%
Gross Rent, Fuel & Power 3.2% 3.3% 1.4 11.3% 8.8% 5.5%
Furniture, Furnishings, Appliances &
Services 9.5% 10.5% 2.7 3.4% 4.3% 5.3%
Medical Care & Health Services 8.8% 8.9% 2.4 4.7% 6.0% 6.4%
16.7 17.3
Transport & Communication 7.7% 8.7% 2.3 14.4% % %
Recreation, Education & Cultural
Services 11.2% 12.4% 3.2 3.7% 5.4% 8.0%
13.2 19.2
Miscellaneous Goods & Services 11.6% 12.3% 3.2 8.4% % %
Private Final Consumption 100.0 100.0 100.0
Expenditure In Domestic Market 6% 8% 2.2 % % %
Multiple implies growth factor between 2009-10 and 2019-20. Source: Expenditure Spectrum of India, 2009-10,
Indicus Analytics.

Higher economic growth at about 9.6% will lead to a per capita income growth of close to 8 percent per annum –
that is households will earn about double that they do now by 2019-20. This extra income will also reflect in a
changed household budget. Household expenditures will grow by more than 8 per cent per annum in the next
decade. The overall household budget would be about 2 times higher than now in real terms. The share of food and
related products would fall from 40 percent now to 34 percent in 2019-20 (though in absolute amounts it would be
about 1.8 times higher). Transport, education, health and recreation would all be among the most rapidly growing
items of consumer expenditures. Depending upon how international energy prices evolve (it is likely that energy
would be among the major subsidy items in the coming decade), the overall budget share may actually fall – not in
real terms though.

India 2020: Indicus Analytics 7

The term miscellaneous goods and services includes a range of items ranging from durables to FMCG to household
help, as incomes grow, these items would be among the fastest to rise – reflecting the evolution of aspirations of
ensuring basic consumption to enjoying better lifestyles. The tipping point is not so much in health or education in
the aggregate, but in goods and services that promise better lifestyles.

Methodology: PFCE growth at the lowest expenditure level (referred to as sub-product level) estimated across ten
year periods. Trend growth rates used to estimate sub-product for 2010s and added up to achieve product and
overall estimate. The growth rates at product and total PFCE are then derived. The product-wise shares are then
estimated.

India 2020: Indicus Analytics 8

Expenditure of Households: Food
Growth Growt Multipl 2000- 2009- 2019-
in h in e 01 10 20
2000s 2010s
Cereals & Bread 1.6% 1.8% 1.2 24.3% 21.3% 13.8%
Pulses 3.3% 3.2% 1.4 2.5% 2.5% 1.9%
Sugar & Gur -1.4% 1.0% 1.1 6.1% 3.5% 2.2%
Oils & Oilseeds 3.7% 2.5% 1.3 4.6% 4.3% 3.0%
Fruits & Vegetables 3.9% 5.4% 1.7 19.7% 18.0% 16.6%
Potato & Other Tubers 2.8% 4.5% 1.5 1.6% 1.4% 1.2%
Milk & Milk Products 3.8% 3.9% 1.5 14.8% 14.4% 11.5%
Meat, Egg & Fish 4.6% 5.0% 1.6 8.2% 8.8% 7.8%
Hotel & Restaurants 11.6% 13.0% 3.4 3.9% 7.0% 13.0
%
Coffee, Tea, Beverages, Packaged 6.6% 11.0% 2.8 14.2% 18.8% 29.1%
Foods, Spices, Intoxicants, Etc.
Food, Beverages & Tobacco 4.1% 6.4% 1.8 100.0 100.0 100.0
% % %
Source: Expenditure Spectrum of India, 2009-10, Indicus Analytics.

What will Indians eat in 10 years? Despite the current high inflation in food products, the trends are quite
unambiguous. Indians will spend more on food, but not that much more in real terms. As governments are likely to
ensure long term food inflation is kept under check through various mechanisms, the food component will fall in
households budgets. But lifestyle changes will show up in a major way in our eating habits. That is the next tipping
point – cooking at home will continue, and we will not do away with kitchens as in Thailand – but processed foods
and eating out will emerge as the among the most rapidly growing component of household budgets.

Already, not just the middle class and the affluent, but the poor as well are eating out. Nuclear families, greater
demand for entertainment, womens education and expected rise in their entering the job market – all are long term
trends that will combine and create a demand. And the supply response will not be far behind.

Methodology: PFCE growth at the lowest expenditure level (referred to as sub-product level) estimated across ten
year periods. Trend growth rates used to estimate sub-product for 2010s and added up to achieve product and

India 2020: Indicus Analytics 9

overall estimate. The growth rates at product and total PFCE are then derived. The product-wise shares are then
estimated.

India 2020: Indicus Analytics 10

Expenditure of Households: Services

Growt Multipl 2000- 2009- 2019-

h in e 01 10 20
2010s
Medical Care & Health Services 8.9% 2.4 12% 11% 9%
Transport & Communication 8.7% 2.3 36% 31% 25%
Personal Transport Equipment 8.9% 2.4 2% 2% 1%
Operation Of Personal Transport 4.6% 1.6 11% 7% 4%
Equipment
Purchase Of Transport Services 5.8% 1.8 20% 15% 9%
Communication 15.2% 4.0 4% 7% 10%
Recreation, Education & Cultural 12.4% 3.2 9% 10% 11%
Services
Education 9.5% 2.5 5% 5% 4%
Others 14.7% 4.0 4% 5% 7%
Miscellaneous Goods & Services 12.3% 3.2 21% 24% 27%
Household Services And Durables 100% 100% 100%
Source: Expenditure Spectrum of India, 2009-10, Indicus Analytics.

Health care expenditures will grow rapidly, and so will those for education. But it will be recreation and
communication that will drive household expenditures the most. The Indian household will move more and more
towards lifestyle enhancing expenditures. This same theme will get reflected in all forms of the budget. Within
education and health care however, expenditures would rise dramatically at the tertiary level – the government
would have more or less withdrawn as an important player servicing the masses in vocational and even higher
education as well as hospitals. A few islands in the form of IITs and IIMs will remain and some more may also be
created. A few more district hospitals may be set up, and all these are expected to be priced much lower than what
the market would dictate. But these will not be able to service a large share of the demand. That growth in demand
for health and education will be serviced by the private sector – and another tipping point will be reached in terms of
the expenditures on tertiary education and health.

Methodology: PFCE growth at the lowest expenditure level (referred to as sub-product level) estimated across ten
year periods. Trend growth rates used to estimate sub-product for 2010s and added up to achieve product and

India 2020: Indicus Analytics 11

overall estimate. The growth rates at product and total PFCE are then derived. The product-wise shares are then
estimated.

India 2020: Indicus Analytics 12

Consumer Durables Penetration Rates (%)

Rural Urban
1993- 1999- 2004- 2009- 2019- 1993- 1999- 2004- 2009. 2019.
Item 94 00 05 10 20 94 00 05 5 5
2 Wheeler 2.1 4.5 7.7 13.9 43.1 11.6 18.4 26 37.5 >80%
4 Wheeler 0.2 0.4 0.8 1.5 5.6 1.2 2.7 4.6 8.5 26.7
Television 7 18.7 25.6 46.5 >80% 40.5 59.5 66.1 >80% >80%

Radio 26.8 30.4 26.3 26.2 22.5 41.8 35.1 33.6 30.4 26.3
Refrigerato
r 0.9 2.7 4.4 9.1 30.7 12.3 22.9 31.9 49.3 >80%
Electric Fan 15.9 26.3 38.4 57.4 >80% 56.6 68.5 81.8 >80% >80%
Air Cooler 0.5 1.7 2.9 6.5 24.8 6.4 10.9 18.2 29.2 >80%
Estimates Using penetration trends from NSSO Data. Source: Expenditure Spectrum of India, 2009-10, Indicus
Analytics.

A surge in durable ownership by households is one of the most unambiguous trends. Large numbers of both rural
and u7rban households will benefit from access to electricity as well as financing to purchase and operate electric
appliances. The only threat to this scenario? Electricity supply.

Methodology: NSSO penetration rates have for 1993-94, 1999-00 and 2004-05 have been used to estimate the
growth trends in penetration for 1999-00 as well as 2019-20.

India 2020: Indicus Analytics 13

Energy Consumption

Series GDP at Energy

Name Factor use (kt of
Cost oil
(1999-00 equivalen
Constant t)
prices,
Rs.
Crore)
1971 478918 181983
1981 678033 255362
1991 1099072 381117
2001 1972605 524257

1000000 2009*
2019*
3691518
9176341
677641
902960
*Estimates

Source: CSO, World Development Indicators and Indicus estimates

The Copenhagen talks notwithstanding India will need more and more energy to service the demands of a growing
economy. However, India will not become an energy intensive economic power in the coming decade. The figure
above shows the GDP on the X axis and India’s energy requirements on the Y axis. India’s GDP in 2019-20 would be

900000
about 4.5 times what it was in 2001, however, total energy requirement would have barely doubled since then.
Why? First endemic lack of energy has created an economy that is not as energy dependent as (say) China. India’s
growth relies more on services that are typically less energy intensive than manufacturing. Moreover, we should
expect lesser energy intensity in the emerging economy of tomorrow as was required in the past.

Methodology: Univariate regression between energy used and natural log of GDP for India yields the relevant
elasticities which were then used to estimate energy consumption provided GDP growth occurs at 9.6% estimated
above.

800000
India 2020: Indicus Analytics 14
Consumption of Agriculture Commodities

Commodity Annual growth in consumption till 2020, %

Rice 1.03
Wheat 2.17
Coarse grains 2.28
Oilseed 4.08
Plant-based fibre 4.32
Cattle and meat -0.61
Other agro products 6.29
Milk 3.86
Fish 6.32
Other food 5.37
Forestry 6.7
Source: Author Estimates drawing from joint work done by Bibek Debroy and Laveesh Bhandari for FAO.

The demand for wheat will surpass that for rice on account of increased incomes and changing rpeferences, not to
mention higher population growth in the northern part of the country. But this will not be at the cost of coarse
grains. Consumption of meats will stagnate and may even fall on account of higher relative prices. The
consumption of cash crops will continue to rise and the demand for milk, and fish is likely to grow rapidly. Overall
agriculture will steadily but slowly move towards being more of a cash crop sector. That is subsistence in agriculture
is likely to become less and less important.

Methodology: The GTAP model has been used to estimate food consumption under a general equilibrium
frameowork.

India 2020: Indicus Analytics 15

Poverty

Rura Urba
l n R+U Populat Poor
Poor Poor Poor ion (mill
Year (%) (%) (%) (mill) )
1973.
5 56.4 49.0 54.9 585.3 321.3
1977.
5 53.1 45.2 51.3 641.1 328.9
1983.
0 45.6 40.8 44.5 725.6 322.9
1987.
5 39.1 38.2 38.9 789.2 307.0
1993.
5 37.3 32.4 36.0 890.0 320.4
2004.
5 28.3 25.7 27.5 1097.1 301.7

2009- 2014- 2019-

10 15 20
National Poverty Rate
with
Limited reform 24.8 22.5 19.9
Slow reform 24.8 20.7 16.6
Rapid reform 24.8 19.1 13.7
Population
Total (in Millions) 1, 1, 1,3
176.7 254.0 26.2
Source: Author estimates using Indicus-Teamlease Population Under Poverty
India Labour Report 2008 (in Mill)
Limited reform 291.2 282.6 263.4
Slow reform 291.2 259.5 220.3
Rapid reform 291.2 239.3 182.3

India 2020: Indicus Analytics 16

Currently almost 300 million people are expected to be living under extreme poverty as defined by the Planning
Commission. And this figure has been more or less stagnant over the last 4 decades. It is well known that the rate
at which poverty rates are falling is reducing – in other words, if the current trends continue as many as 260 million
persons would remain under extreme poverty even by the end of the decade. Rapid reforms can however
dramatically reduce these numbers – these reforms would generally be oriented towards ensuring that the demands
of a growing economy are well met by appropriate skills and human capital. However, creating human capital takes
a long time, and especially among those who are the least privileged. Hence even in very good scenarios – almost
200 million persons are likely to remain extremely poor by the end of the decade. Consequelty expect that social
safety nets would remain critical for India.

Methodology: A non-linear trend has been found in the case of both rural and urban poverty rates – this same non-
linear trend was used to predict poverty rates in the future for the limited reform estimates. The slow and rapid
reform related estimates were derived using estimates of occupation shift away from rural to urban, from
subsistence self-employed to wage employed, from unorganized to organized, and from farm to non-farm
employment.

India 2020: Indicus Analytics 17

Additional Employment Generation (millions)
2020- Comments
21 2020- Additio
(lower 21(upp Addition nal
bound er al (lower (upper
2008-09 ) bound) bound) bound)
Growing economy will create many
opportunities for this class of the highly
Professional, Technical educated – the scientists and the
And Related Workers 15.5 17.1 21.4 1.6 5.9 professionals
Organized sector and government
Administrative, employment will increase on back of larger
Executive And size of government as well as growth of
Managerial Workers 14.2 20.8 26.0 6.6 11.8 the organized sector
This sector has stagnated due to rapid
Clerical And Related changes in office technologies as well as
Workers 10.3 9.0 11.2 -1.3 0.9 communications
Retail or wholesale, organized or
unorganized – a growing free market
economy will require greater sales efforts
Sales Workers 31.2 36.3 45.4 5.1 14.2 across the board
Education and Health services are growing
Service Workers 15.9 18.2 22.8 2.3 6.9 rapidly, and so are many other services
The primary sector does not have many
avenues left for productive employment –
Farmers, Fishermen, but with or without productivity increases,
Hunters, Loggers And this sector will have to absorb what others
Related Workers 212.5 273.0 341.3 60.5 128.8 cannot
Production And Related Manufacturing, mining and construction
Workers, Transport workers will double in number – ten years
Equipment Operators of high growth will achieve what 60 years
And Labourers 89.6 140.7 175.9 51.1 86.3 could not.
Not Classified 0.9 0.8 1.0 -0.1 0.1
Total Employment 390.1 516.1 645.1 126.0 255.0

India 2020: Indicus Analytics 18

Source: Indicus estimates using NSSO and CSO data.

Depending upon whether youth would like to study more or work earlier, to what extant women enter the workforce
in larger numbers, and what income earning options exist between 126 to 255 million additional Indians will enter
the workforce in the period under consideration.

Methodology: The responsiveness or elasticity of employment to sub-sectoral GDP growth was estimated for the
period 1993-94 and 2004-05 using NSSO and CSO data. The employment estimates are then made assuming
historical growth rates continue at the sub-sectoral level.

India 2020: Indicus Analytics 19

Fastest Growing Non-Agri Occupations in the 2010s (millions)

NCO2 Description Employm Employm Additiona

ent 2008- ent 2020- l
09 21 Employm
ent
1 Bricklayers and Other Constructions Workers 19.8 67.2 47.4
2 Transport Equipment Operators 12.3 23.9 11.6
3 Salesmen, Shop Assistants and Related Workers 11.3 19.9 8.6
4 Production and Related Workers, n.e.c. 4.4 11.3 6.9
5 Material Handling and Related Equipment Operators, Loaders and 3.7 10.0 6.3
Unloaders
6 Maids and Other House Keeping Service Workers n.e.c. 3.7 8.0 4.3
7 WPDM, Other Service 3.2 7.3 4.1
8 Teachers 8.4 11.6 3.2
9 Merchants and Shopkeepers, Wholesale and Retail Trade 16.9 20.0 3.1
10 WPDM and Related Executives, Transport, Storage and 1.7 4.7 3.0
Communication
11 Tailors, Dress Makers, Sewers, Upholsterers and Related Workers 6.8 9.6 2.8
12 Carpenters, Cabinet and Related Wood Workers 3.6 6.4 2.7
13 WPDM Mining, Construction, Manufacturing and Related Concerns, 5.2 7.7 2.5
14 Painters 1.5 3.7 2.2
15 Insurance, Real Estate, Securities and Business Service Salesmen 1.6 3.8 2.2
and Auctioneers
16 Computing Machine Operators 0.6 2.1 1.4
17 Stone Cutters and Carvers 0.9 2.3 1.4
18 Administrative, Executive and Managerial Workers, n.e.c. 0.6 2.0 1.3
19 Spinners, Weavers, Knitters, Dyers and Related Workers 5.0 6.3 1.2
20 Tobacco Preparers and Tobacco Product Makers 3.4 4.6 1.2
21 Professional Workers, n.e.c. 1.1 2.1 1.1
22 Hair Dressers, Barbers, Beauticians and Related Workers 2.0 3.1 1.0
23 Plumbers, Welders, Sheet Metal and Structural Metal Preparers and 1.6 2.5 0.9
Erectors

India 2020: Indicus Analytics 20

 24 Cooks, Waiters, Bartenders and Related Worker (Domestic and 2.1 2.7 0.6
Institutional)
25 Nursing and other Medical and Health Technicians 1.3 1.7 0.5
WPDM: Working Proprietors Directors Managers. Source: Indicus estimates using NSSO and CSO data.
Methodology: The responsiveness or elasticity of employment to sub-sectoral GDP growth was estimated for the
period 1993-94 and 2004-05 using NSSO and CSO data. The employment estimates are then made assuming
historical growth rates continue at the sub-sectoral level.

India 2020: Indicus Analytics 21

Urbanization

Urban
Populati Share
Year on (%)
1951 62.4 17.3
1961 78.9 18.0
1981 159.5 23.3
1991 217.6 25.7
2001 286.1 27.8
2009 374.2 31.8
2019 468.9 35.4
Source: Indicus estimates using Registrar General of India data.

About 32% of India’s 1176.7 million people reside in Indian cities currently. This will increase to about 35.4% of the
total population of 1326.2 million by 2019 – an addition of about 100 million. The bulk of this new urban population
will comprise of recent migrants.

Methodology: trend growth in share of population in urban areas has been used to first predict figures for 2009 and
2019. Population estimates by RGICS were then used along with urban shares to predict urban population.

India 2020: Indicus Analytics 22

Income Distribution

120.0

Percentage (%) Million Households

100.0 1000K 75K-

150 300 500 1000
K- K- K- K-
Rural- 75K- 150K- 300K- 500K- - >150 <75 150 300 500 100 1500 >150
Year Urban <75K 150K 300K 500K 1000K 1500K 0K Total K K K K 0K K 0K Total
2009- 10 Urban 29.5 26.3 21.3 10.1 7.7 2.3 2.9 100.0 22.9 20.4 16.5 7.8 6.0 1.8 2.2 77.7
olds (millions)

20019-
20 Urban 11.7 19.2 26.2 16.1 14.1 5.0 7.5 100.0 11.7 19.1 26.1 16.0 14.0 5.0 7.5 99.5
2009- 10 Rural 58.1 24.3 11.3 3.6 1.9 0.4 0.4 100.0 96.7 40.4 18.8 5.9 3.2 0.7 0.7 166.4
20019-
20 Rural 42.0 27.0 18.0 7.0 4.1 1.0 1.0 100.0 76.3 49.0 32.6 12.7 7.5 1.8 1.8 181.5
Household Annual Income in 2009-10 (current) prices. Source: Market Skylne of India, 2009-10, Indicus Analytics

The 244 million households would have increased to about 288 million cross rural and urban India. India will
80.0
progressively become less poor – but by no means be able to eliminate the ranks of the extremely poor. Those
households earning less than 75000 per annum will fall from 23 million to less than 12 million in urban India and
from 96.7 million currently to less than 77 million in rural areas. At the same time the number of households that
can be classified as highly affluent (> 10 lakh per year) will rise from 4 million currently to 12.5 million in urban

India 2020: Indicus Analytics 23

areas; and from barely 1.5 million to 3.6 million in rural areas. But the greatest increase is going to be among the
middle classes – the great Indian middle class will finally become a reality in both rural and urban India.
Methodology: Indicus primary data was used to estimate income distribution for 2009-10. Sub-sectoral growth in
incomes for the 2000s were then used to estimate incomes of every household for 20019-20 under the assumption
that these same growth rates continue. Hence household income growth for those households in agriculture is
significantly lower than for those who are in (say) telecommunications or financial sectors.

India 2020: Indicus Analytics 24

 Comparison of Standard of Living – States and Countries

PC
Income
in PPP PC Income in PPP
State/Country Year terms State/Country Year terms
34,95
Chandigarh 2019 1 Chandigarh 2009 10,861
35,02
Netherlands 2005 0 Turkey 2005 10,850
22,07
Goa 2019 7 Goa 2009 8,080
22,76
Korea, Rep. 2005 0 St. Lucia 2005 8,130
19,34
Delhi 2019 8 Delhi 2009 7,271
20,25
Portugal 2005 0 Macedonia, FYR 2005 7,510
18,33
Puducherry 2019 3 Puducherry 2009 7,253
18,60
Barbados 2005 0 Colombia 2005 6,960
13,95
Gujarat 2019 9 Gujarat 2009 4,648
13,48
Poland 2005 0 Middle income 2005 4,705
13,38
Haryana 2019 3 Haryana 2009 5,202
12,36
Mexico 2005 0 Ukraine 2005 5,520
11,08
Maharashtra 2019 6 Maharashtra 2009 4,621
11,21
Malaysia 2005 0 Jordan 2005 4,480

India 2020: Indicus Analytics 25

 PC
Income
in PPP PC Income in PPP
State/Country Year terms State/Country Year terms
11,06
Kerala 2019 5 Kerala 2009 4,356
11,10
Chile 2005 0 Bolivia 2005 4,320
Himachal Pradesh 10,52
2019 2 Himachal Pradesh 2009 4,138
10,42
Argentina 2005 0 China 2005 4,100
Tamil Nadu 2019 8,663 Tamil Nadu 2009 3,792
Belarus 2005 8,560 Sri Lanka 2005 3,500
Andhra Pradesh 2019 8,183 Andhra Pradesh 2009 3,383
South Africa 2005 8,330 Philippines 2005 3,170
Karnataka 2019 7,909 Karnataka 2009 3,437
Brazil 2005 8,300 Sri Lanka 2005 3,500
Punjab 2019 7,110 Punjab 2009 4,009
Colombia 2005 6,960 Azerbaijan 2005 3,940
India State Av. 2019 6,286 India State Av. 2009 2,836
Thailand 2005 6,420 Indonesia 2005 3,040
Nagaland 2019 6,406 Nagaland 2009 2,694
Ecuador 2005 6,390 Congo, Rep. 2005 2,590
Uttaranchal 2019 6,590 Uttaranchal 2009 2,940
Jamaica 2005 6,600 Indonesia 2005 3,040
Orissa 2019 5,678 Orissa 2009 2,206
Peru 2005 5,920 Vietnam 2005 2,100
West Bengal 2019 5,633 West Bengal 2009 2,807
Peru 2005 5,920 Indonesia 2005 3,040
Chattisgarh 2019 4,816 Chattisgarh 2009 2,187
Namibia 2005 5,280 Vietnam 2005 2,100
Jammu & Kashmir
2019 4,738 Jammu & Kashmir 2009 2,241
Jordan 2005 4,480 Pakistan 2005 2,230

India 2020: Indicus Analytics 26

 PC
Income
in PPP PC Income in PPP
State/Country Year terms State/Country Year terms
Jharkhand 2019 4,205 Jharkhand 2009 1,937
Armenia 2005 4,210 Cameroon 2005 1,900
Assam 2019 3,411 Assam 2009 1,906
Bhutan 2005 3,300 Cameroon 2005 1,900
Uttar Pradesh 2019 2,262 Uttar Pradesh 2009 1,410
Pakistan 2005 2,230 Sudan 2005 1,480
Madhya Pradesh 2019 2,666 Madhya Pradesh 2009 1,631
Congo, Rep. 2005 2,590 Sub-Saharan Africa 2005 1,651
Bihar 2019 1,955 Bihar 2009 1,041
LDCs 2005: UN classification
Djibouti 2005 2,020 2005 1,052
A & N Islands 2019 9,397 A & N Islands 2009 4,049
Uruguay 2005 9,400 Guatemala 2005 4,010
Arunachal Pradesh
2019 5,064 Arunachal Pradesh 2009 2,335
El Salvador 2005 5,500 Moldova 2005 2,530
Tripura 2019 6,793 Tripura 2009 2,738
Dominica 2005 6,600 Congo, Rep. 2005 2,590
Sikkim 2019 6,951 Sikkim 2009 2,878
Algeria 2005 6,820 Vanuatu 2005 3,000
Meghalaya 2019 4,588 Meghalaya 2009 2,248
Swaziland 2005 4,640 Nicaragua 2005 2,250
Mizoram 2019 4,434 Mizoram 2009 2,385
Bolivia 2005 4,320 Mongolia 2005 2,550
Manipur 2019 4,077 Manipur 2009 1,962
China 2005 4,100 Uzbekistan 2005 2,000
Source: Indicus estimates using data from World Development Indicators, CSO, and RGI.

Methodology: States GSDP growth was forecast using trend growth in the 2000s for that in 2010s. The population
forecasts are from the Registrar General of India estimates. This yielded the expected PC GDP of the states. The

India 2020: Indicus Analytics 27

PPP estimates were then done for the states of India using the currently available estimate of about 9.8 Rupees to
the PPP US$. These were then compared with the world Banks estimates for PPP of different states.

India 2020: Indicus Analytics 28

Education Profile

Number of Individuals across General Education levels in 15-60 age group (millions)
Year 2009-10 2019-20 20010s
Addition
General Education Mill Mill al Mill
Not Literate 210.1 199.8 -10.4
Lit W/O Formal
schooling 3.7 12.1 8.4
TLC 8.3 71.2 63.0
Others 8.0 16.9 8.8
Literate - Below
Primary 45.9 44.4 -1.5
Primary 91.9 136.7 44.8
Middle 125.1 184.8 59.6
Secondary 75.9 98.8 22.9
Higher Secondary 46.7 71.1 24.4
Graduate & Above 45.8 72.9 27.1
Total 659.2 806.5 147.3

Year 2009-10 2019-20 20010s

Technical Education Mill Mill Additional Mill

No Tech. Educ. 640.6 777.5 136.8
Agri-Dip/Certf. 0.3 0.4 0.1
Engineering/Tech. Degree and
Diploma etc. 10.6 23.0 12.4
Medicine-Degree/Dip etc. 1.3 2.1 0.8
Crafts-Dip/Certf. 0.6 0.7 0.1
Other_Subjects-Dip etc. 5.5 6.2 0.7
Total 657.8 802.5 144.6
Source: Indicus estimates using data from NSSO large sample employment surveys.

India 2020: Indicus Analytics 29

Methodology: The education profile of Indians across above segments were estimated using NSSO data for the
periods 1993-94, 1999-00, and 2004-05. The trend growth was then calculated for each of the above.

India 2020: Indicus Analytics 30