Human Development in India - NCAER

income, poverty, and inequality 1733 per cent of the total, with agricultural wage work addingan additional 12 per cent. However, given the difficultiesof measuring agricultural income, these results should betreated with caution.Finally, private and public transfers are important formany Indian households. Remittances from family membersworking away from home account for 2 per cent of all householdincomes, but 5 per cent of Indian households receive atleast some income from absent family members. Governmentsupport is even more common: 13 per cent of Indianhouseholds receive some form of direct income supplementfrom the government. The most common source of governmentsupport comes in the form of old-age and widows’pensions. This government assistance is usually quite small(the typical reported payment is only Rs 750 per year), so itaccounts for less than half a per cent (0.4 per cent) of householdincome. For poor households, however, this help canbe significant.Multiple Income SourcesAlthough much of the discussion on income sources tends toassume that households rely predominantly on one source ofincome, the IHDS data suggest that more than 50 per centof Indian households receive income from multiple sources.Table 2.4 shows the proportion of households that drawincome from various sources of income.For example, more than four out of five farm householdsalso have income from some other source, more often fromagricultural and non-agricultural wage labour and salariedwork (40 per cent) but also from private businesses (17per cent). Similarly, 71 per cent of households with a privatefamily business also receive other types of income, forinstance, from family farms (37 per cent). This diversificationimplies significant interconnections between differentsectors of the Indian economy and suggests that policiesthat affect one sector of the economy could have widespreadimpact on a large number of households.Some of these sources of income are highly interconnected.It is quite common for farmers to work on otherpeople’s fields when their own fields do not require attention.However, as we show in Figure 2.4, a substantial proportionof farm households rely on non-agricultural income, particularlyin higher income categories.Income Disparities and Sources of IncomeHow much income a household earns is closely related tothe source of income (see Table A.2.2a). Wealthy householdsreceive much of their income from monthly salaries.Table 2.4Per cent of Households Drawing Income from Various SourcesCultivation Wage Work Business Other Rural Urban Total Medion Income 1.14 0.26 0.89 35,755 – 2.78 0.61 2.16 32,938 – 8.69 1.12 6.52 25,507 – – 23.55 3.83 17.89 23,536 – 1.4 0.51 1.15 54,850 – – 3.9 1.28 3.15 36,000 – – 5.48 0.56 4.07 31,265 – – – 11.27 1.03 8.33 20,964– 0.81 1.61 1.04 47,400– – 2.43 5.98 3.45 40,900– – 6.33 12.1 7.98 33,600– – – 24.23 48.46 31.18 27,000 – 0.99 3.71 1.77 52,000– – – 3.39 14.1 6.47 40,000– – – 1.98 4.15 2.6 18,000Negative or no income – – – 1.61 0.69 1.35 –985Grand Total 100 100 100Notes: Wage work includes agricultural and non-agricultural wage, and salaried work.Other sources include pensions, family transfers, and income from government programmes.Source: IHDS 2004–5 data.