India 2010 to 2020
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India 2010 to 2020

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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 ...

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.
Trend Growth: Economic Growth in the 2010s
Economic Structure: An even more of a services economy
Household Consumption
Expenditure of Households: Food
Expenditure of Households: Services
Consumer Durables Penetration Rates (%)
Energy Consumption
Consumption of Agriculture Commodities
Poverty
Additional Employment Generation (millions)
Fastest Growing Non-Agri Occupations in the 2010s (millions)
Urbanization
Income Distribution
Comparison of Standard of Living – States and Countries
Education Profile

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.

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India 2010 to 2020 India 2010 to 2020 Presentation Transcript

  • 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...........................................................................................................................................2 Household Consumption..............................................................................................................................................................................4 Expenditure of Households: Food .............................................................................................................................................................5 Expenditure of Households: Services .........................................................................................................................................................6 Consumer Durables Penetration Rates (%)..................................................................................................................................................7 Energy Consumption...................................................................................................................................................................................8 Consumption of Agriculture Commodities..................................................................................................................................................9 Poverty.......................................................................................................................................................................................................10 Additional Employment Generation (millions)........................................................................................................................................12 Fastest Growing Non-Agri Occupations in the 2010s (millions)..............................................................................................................13 Urbanization...............................................................................................................................................................................................14 Income Distribution...................................................................................................................................................................................15 Education Profile.......................................................................................................................................................................................19
  • Trend Growth: Economic Growth in the 2010s Year Agriculture Mining & Manufact- Electricity, Construc- Trade, Transport, Financing, Community Gross , Forestry Quarrying uring Gas & tion Hotels & Storage & Insurance, , Social & Domestic & Fishing Water Restaurant Communic Real Estate Personal Product Supply ation & Business Services At 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. 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 2
  • Economic Structure: An even more of a services economy Year 2009-10* 2019-10* 100% Agriculture, Forestry & 16.1% 9.0% 90% Fishing Mining & Quarrying 1.8% 1.3% 80% Manufacturing 15.1% 13.5% Community,Social & Personal Services Electricity, Gas & Water 1.9% 1.2% 70% Financing,Insurance,Real Estate & Business Supply Services Transport,Storage & Communication Construction 7.3% 8.9% 60% Trade, Hotels & Restaurant Trade, Hotels & Restaurant 16.1% 15.9% Transport, Storage & 14.1% 25.2% Construction 50% Communication Electricity, Gas & Water Supply Financing, Insurance, Real 15.0% 15.8% 40% Manufacturing Estate & Business Services Mining & Quarrying Community, Social & 12.5% 9.2% 30% Agriculture,Forestry & Fishing Personal Services 20% Gross Domestic Product At 100.0% 100.0% Factor Cost 10% Source: District Domestic Product of India, 2009-10, Indicus Analytics. 0% 2009-10 2019-20 Agriculture will become a far smaller part of the economy, and will 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, 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 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 3
  • Household Consumption Growth in 2000s Growth in 2010s Multiple 2000-01 2009-10 2019-20 Food, Beverages & Tobacco 4.1% 6.4% 1.8 48.2% 40.6% 34.2% 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% Transport & Communication 7.7% 8.7% 2.3 14.4% 16.7% 17.3% Recreation, Education & Cultural Services 11.2% 12.4% 3.2 3.7% 5.4% 8.0% Miscellaneous Goods & Services 11.6% 12.3% 3.2 8.4% 13.2% 19.2% Private Final Consumption Expenditure In Domestic Market 6% 8% 2.2 100.0% 100.0% 100.0% 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. 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 4
  • Expenditure of Households: Food Growth Growth Multiple 2000-01 2009-10 2019-20 in 2000s in 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 Foods, Spices, 6.6% 11.0% 2.8 14.2% 18.8% 29.1% 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 overall estimate. The growth rates at product and total PFCE are then derived. The product-wise shares are then estimated. India 2020: Indicus Analytics 5
  • Expenditure of Households: Services Growth Multiple 2000-01 2009-10 2019-20 in 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 Equipment 4.6% 1.6 11% 7% 4% Purchase Of Transport Services 5.8% 1.8 20% 15% 9% Communication 15.2% 4.0 4% 7% 10% Recreation, Education & Cultural Services 12.4% 3.2 9% 10% 11% 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 overall estimate. The growth rates at product and total PFCE are then derived. The product-wise shares are then estimated. India 2020: Indicus Analytics 6
  • Consumer Durables Penetration Rates (%) Rural Urban Item 1993-94 1999-00 2004-05 2009-10 2019-20 1993-94 1999-00 2004-05 2009.5 2019.5 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 Refrigerator 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 7
  • Energy Consumption Energy use (kt of oil equivalent) Series GDP at Energy use 1000000 Name Factor Cost (kt of oil 2019-20 900000 (1999-00 equivalent) Constant 800000 prices, Rs. Crore) 700000 1971 478918 181983 600000 1981 678033 255362 1991 1099072 381117 2004-05 500000 2001 1972605 524257 2009* 3691518 677641 400000 2019* 9176341 902960 300000 *Estimates 200000 100000 100000 1100000 2100000 3100000 4100000 5100000 6100000 7100000 8100000 9100000 10100000 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 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. India 2020: Indicus Analytics 8
  • 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 9
  • Poverty Rural Urban R+U Poor Poor Poor Population Poor Year (%) (%) (%) (mill) (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 2009-10 2014-15 2019-20 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) 1,17 1,25 1,32 6.7 4.0 6.2 Population Under Poverty (in Mill) Limited reform 291.2 282.6 263.4 Source: Author estimates using Indicus-Teamlease India Labour Slow reform 291.2 259.5 220.3 Report 2008 Rapid reform 291.2 239.3 182.3 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. India 2020: Indicus Analytics 10
  • 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 11
  • Additional Employment Generation (millions) 2020-21 2020-21(u Additional Additional Comments (lower pper (lower (upper 2008-09 bound) bound) bound) bound) Growing economy will create many opportunities for Professional, Technical And this class of the highly educated – the scientists and the Related Workers 15.5 17.1 21.4 1.6 5.9 professionals Organized sector and government employment will Administrative, Executive And increase on back of larger size of government as well as Managerial Workers 14.2 20.8 26.0 6.6 11.8 growth of the organized sector This sector has stagnated due to rapid changes in office Clerical And Related Workers 10.3 9.0 11.2 -1.3 0.9 technologies as well as communications Retail or wholesale, organized or unorganized – a growing free market economy will require greater sales Sales Workers 31.2 36.3 45.4 5.1 14.2 efforts across the board Education and Health services are growing rapidly, and Service Workers 15.9 18.2 22.8 2.3 6.9 so are many other services The primary sector does not have many avenues left for productive employment – but with or without Farmers, Fishermen, Hunters, productivity increases, this sector will have to absorb Loggers And Related Workers 212.5 273.0 341.3 60.5 128.8 what others cannot Production And Related Manufacturing, mining and construction workers will Workers, Transport double in number – ten years of high growth will Equipment Operators And achieve what 60 years could not. Labourers 89.6 140.7 175.9 51.1 86.3 Not Classified 0.9 0.8 1.0 -0.1 0.1 Total Employment 390.1 516.1 645.1 126.0 255.0 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 12
  • Fastest Growing Non-Agri Occupations in the 2010s (millions) NCO2 Description Employment Employment Additional 2008-09 2020-21 Employment 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 Unloaders 3.7 10.0 6.3 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 Communication 1.7 4.7 3.0 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 and Auctioneers 1.6 3.8 2.2 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 Erectors 1.6 2.5 0.9 24 Cooks, Waiters, Bartenders and Related Worker (Domestic and Institutional) 2.1 2.7 0.6 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 13
  • Urbanization Urban Year PopulationShare (%) 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 14
  • Income Distribution 120.0 100.0 96.7 Households (millions) Household Annual Income 80.0 76.3 (K=1000) <75K 75K-150K 150K-300K 60.0 300K-500K 500K-1000K 49.0 1000K-1500K >1500K 40.4 40.0 32.6 26.1 22.9 20.4 19.1 18.8 20.0 16.5 16.0 14.0 12.7 11.7 7.8 7.5 7.5 6.0 5.0 5.9 1.8 2.2 3.2 1.8 1.8 0.7 0.7 - Urban Urban Rural Rural 2009-10 20019-20 2009-10 20019-20 Percentage (%) Million Households 1000K Rural- 75K- 150K- 300K- 500K- 1000K- 75K- 150K- 300K- 500K- - >1500 Year Urban <75K 150K 300K 500K 1000K 1500K >1500K Total <75K 150K 300K 500K 1000K 1500K K 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 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 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 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 15
  • Comparison of Standard of Living – States and Countries PC Income in State/Country Year PPP terms State/Country Year PC Income in PPP terms Chandigarh 2019 34,951 Chandigarh 2009 10,861 Netherlands 2005 35,020 Turkey 2005 10,850 Goa 2019 22,077 Goa 2009 8,080 Korea, Rep. 2005 22,760 St. Lucia 2005 8,130 Delhi 2019 19,348 Delhi 2009 7,271 Portugal 2005 20,250 Macedonia, FYR 2005 7,510 Puducherry 2019 18,333 Puducherry 2009 7,253 Barbados 2005 18,600 Colombia 2005 6,960 Gujarat 2019 13,959 Gujarat 2009 4,648 Poland 2005 13,480 Middle income 2005 4,705 Haryana 2019 13,383 Haryana 2009 5,202 Mexico 2005 12,360 Ukraine 2005 5,520 Maharashtra 2019 11,086 Maharashtra 2009 4,621 Malaysia 2005 11,210 Jordan 2005 4,480 Kerala 2019 11,065 Kerala 2009 4,356 Chile 2005 11,100 Bolivia 2005 4,320 Himachal Pradesh 2019 10,522 Himachal Pradesh 2009 4,138 Argentina 2005 10,420 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 India 2020: Indicus Analytics 16
  • PC Income in State/Country Year PPP terms State/Country Year PC Income in PPP terms 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 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 Djibouti 2005 2,020 LDCs 2005: UN classification 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 India 2020: Indicus Analytics 17
  • PC Income in State/Country Year PPP terms State/Country Year PC Income in PPP terms 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 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 18
  • Education Profile Number of Individuals across General Education levels in 15-60 age group (millions) Year 2009-10 2019-20 20010s Additional General Education Mill Mill 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. 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 19