living wage report bhadohi, uttar pradesh, india

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LivingWageReportBhadohi,UttarPradesh,IndiaRuralWithContextProvidedintheCarpetWeavingIndustry

By:KuriakoseMamkoottam&NidhiKaicker

PhotoCourtesyof©ScottWelker,GoodWeaveInternational,2011

Series1,Report8

October2016

Preparedfor:TheGlobalLivingWageCoalitionUndertheAegisofthe ISEALAlliance,Fairtrade International,ForestStewardshipCouncil,GoodweaveInternational,RainforestAlliance,SocialAccountability International,SustainableAgricultureNetwork,andUTZ

LivingWageReportforRuralBhadohi,UttarPradesh,India-withfocusoncarpetweavingindustry

©GlobalLivingWageCoalitionUnder the Aegis of the ISEAL Alliance, Fairtrade International, Forest Stewardship Council, GoodWeave International,RainforestAlliance,SocialAccountabilityInternational,SustainableAgricultureNetwork,andUTZ

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Acknowledgements

ThisreportonLivingWagesforRuralBahdohi,UttarPradesh, India:withfocusontheCarpetWeavingIndustry has been a collaborativeproject in every senseof the term. Itwas created as a result of theinnovative methodology developed by Richard Anker and Martha Anker, who trained a number ofresearchersfromacrosstheworldincludingthisreport’sfirstauthor.TheAnkershavebeenavailableforconsultationmultipletimesthroughSkypeconversation.

GoodWeave International, a member of The Global Living Wage Coalition; other members of whichinclude FairTrade International, Forest Stewardship Council (FSC), Sustainable AgricultureNetwork/Rainforest Alliance (SAN/RA), Social Accountability International (SAI), UTZ, and the ISEALAlliance sponsored this study. I express my gratitude to several members of the GoodWeave team,especially:BikoNagara,USA,ManojBhatt,NewDelhi,ShriMathewJohnandJawedAhmed,Varanasi.

IamgratefultoRashidEquaramandSanjayKumarDubeywhoassistedthestudybycollectingprimarydata from visits to work places, local markets and the homes of many workers. I also express mygratitude to themanyworkers, factorymanagers and subcontractorswho have been kind enough toparticipateinthisstudybysharinginformation.

AlthoughIacceptedtheinvitationtoundertakethisstudyonmyown,Isoonrealisedthatthecomplexityof the studywasbeyond theexclusivedomainofmyexpertise. Iwish toplaceon record thevaluablecontributionmadebyDrNidhiKaickertothisreport.Nidhihascontributedateverystageofthisreport:beginningwith thepreparationof thesecondarydata for the Istanbulworkshop,preparationof tailor-madesurveyformsfordatacollection,analysisofthedata,preparationofthemodeldietandthewritingofthefinalreport.AsIhavenootheradequatewaytothankher,shehasbeenincludedastheco-authorofthisreport.

NidhiandIalsowishtoexpressoursincereappreciationtoDrKanikaMahajanforhelpinguswithdataonlabourparticipationandunemploymentratesinruralUttarPradesh(UP).

Kuriakose Mamkoottam, Delhi



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Foreword

Thisreport is thefourth inaseriesofstudiesproducedbytheGlobalLivingWageCoalition,aworkinggroup of six organizations, which are members and affiliates of the ISEAL Alliance. These leaders instandards-settingandcertificationhaveagreedtoadoptcommondefinitions,methodsandbenchmarkstoassessalivingwage,andstrivetomaketheseapplicableacrosssectorswithingeographicregions.Ineachofourprogramsweaimtohelpcompaniesensurejustlivelihoodsformillionsofworkerswhoarenowlargelyunprotected.GoodWeave’smission-levelaimtostopchildlaborisservedbythiseffort,asonly inmeetingtherealcostof living forworkerscanparentschoosetoenroll theirchildren inschoolratherthantheworkforce.

ThismarksthefirststudyincarpetsandinruralIndia.TheCoalitionidentifiedIndiaasafocuscountry,asitslaborforceissecondinnumberonlytoChina’s,yetitisriddledwithworkers’rightsconcerns.WalkFree’sSlaveryIndexestimates18millionpeopleareenslavedinIndia,morethananyothercountry,andthe ILOestimates5.7millionoftheworld’schild laborersare Indian.Carpetandtextileproductionareamong India’s leading employers. According to the Indian government’s census, Uttar Pradesh, amanufacturinghubforthissector,hasthecountry’shighestnumberofchildlaborers.Allofthistogetherjustifiedacloserlookatwhetheralivingwagegapmightbeconsideredarootcause.

KuriakoseMamkoottamandNidhiKaicker skillfully applied theAnkerMethodology toproduceabasicliving wage calculation for rural Uttar Pradesh. This practical approach, explained in section 5 of thisreport,combinesprimaryresearchandsecondarydatawhileconsideringtheactual livingconditionsofcarpetweaversintheregionascriticalcontext.Thisbenchmarkiswellabovemostrealworkerearningsin the region. Other studies, sponsored the Global Living Wage Coalition, vary considerably in theirresults,butallcorroboratethiskeyfinding:workersincountriesaroundtheworldfaceaprofoundwagegapthatpreventsthemfrommeetingtheirbasicneedsandrights.

GoodWeaveintroducedtheresearcherstocarpetworkercommunitiestointerviewthemandcarryoutthe benchmark study; most were employed by sub-contractors or home-based operations, workinginformally.InSouthAsia,82%ofnon-agriculturalemploymentisinformal.Theseworkersfalloutsidethepurviewofmostlegalprotectionsandassistanceprograms,anddataonthispopulationisinadequate.InAugust 2016, the Indian government announced a newminimum wage hike in the Delhi region andsimilarincreasesinotherstatesmaysoonfollow.Minimumwagelaws,however,arerarelyenforcedintheinformalworkforce. This isacutelyrelevanttoGoodWeave’smission,aschild,forcedandbondedlaboraremostoftenconnectedtothisportionofthesupplychain.

There is another component to this work that is well served by the Global Living Wage Coalition.Becausewelearnmoreabouthowandwhereworkerslive,whattheyspendonfood,shelter,educationandhealthcare,wecantrackwhethertheresourcesintendedfortheirbenefitactuallyreachthemandserve toadvance their livelihoods. We find that families cannotalwaysaffordboth foodand the fuelwithwhichtocookit,andthatsupportingchildrentoattendschooliscompletelyoutoftheirreach.Itisdauntingtolearnthisofpeoplewhooftenwork60hoursaweek;suchistherealityoftheglobalwagecrisis.

With internationally recognized standards that include credible benchmarks, Coalition members givecompaniesachancetoemploythosemostinneedofdecentwork,andtohavearealimpactonpovertyanditsattendantissues,fromchildprotectiontoarangeofhumanrights.Thisstudyisanactionitemforthatwork.Thenextstepistobringourfindingsintopracticebytrainingmoreon-the-groundprogramsto apply the benchmarks produced using the Anker Methodology. We also must ensure that wage



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standards apply all the way to the bottom of supply chains, and build acceptance of the living wageconcept among the full array of players including business, workers and government. This process isessential to establish new norms that protect all workers: a victory for human rights and the globaleconomy.

NinaSmith

CEO,GoodWeaveInternational

September14,2016



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Acknowledgements.......................................................................................................................................1

Foreword.......................................................................................................................................................2

Introduction..................................................................................................................................................7

1.Background....................................................................................................................................7

2.Livingwageestimate......................................................................................................................8

3.Context..........................................................................................................................................8

3.1RuralIndia.......................................................................................................................................8

3.2Carpetweaving,economyandemployment..................................................................................8

4.Conceptanddefinitionofalivingwage..........................................................................................9

5.HowOurlivingwageisestimated................................................................................................10

5.1Thedata........................................................................................................................................10

5.2TheAnkermethodology................................................................................................................10

5.3Estimatingthelivingwage............................................................................................................12

CostofaBasicbutDecentLifeforaWorkerandTheirFamily...................................................................12

6.Foodcosts....................................................................................................................................12

6.1Generalprinciplesofmodeldiet...................................................................................................12

6.2Modeldiet.....................................................................................................................................14

6.3Foodprices....................................................................................................................................15

6.3.1Collectingfoodprices.............................................................................................................15

6.3.2Analysisoffoodprices............................................................................................................16

6.3Summaryoffoodcosts..................................................................................................................16

7.Housingcosts...............................................................................................................................16

7.1Localstandardforbasicacceptablehousing.................................................................................17

7.2Rentforacceptablehousing.........................................................................................................18

7.3Rentalequivalentvalueofbasicacceptablehousing....................................................................22



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7.4Rentalequivalentcostofowningahouse....................................................................................23

7.5Summaryofrentorequivalentcostforacceptablehousing........................................................23

7.6Utilitiesandotherhousingcosts...................................................................................................24

7.6.1Fuelforcookingandforheatinwinter..................................................................................24

7.6.2Costoflighting.......................................................................................................................24

7.7Summaryofhousingcosts............................................................................................................25

8.Non-foodandnon-housingcosts(NFNH)......................................................................................25

9.Postchecksofnon-foodandnon-housingcosts...........................................................................27

9.1Healthcarepostcheck..................................................................................................................27

9.2Educationpostcheck....................................................................................................................28

9.3Consumerdurablespostcheck.....................................................................................................29

9.4Transportationpostcheck............................................................................................................30

10.Provisionforunexpectedeventstoensuresustainability...........................................................30

LivingWageforWorkers.............................................................................................................................31

11.Familysizeneedingtobesupportedbylivingwage....................................................................31

12.Numberoffull-timeworkersinfamilyprovidingsupport...........................................................31

13.MandatorydeductionsfrompayandCashAllowances...............................................................32

14.In-kindbenefits..........................................................................................................................33

MinimumWagesandGapstoaLivingWage..............................................................................................34

15.Comparingourlivingwageestimatestominimumwagesandprevailingwages:wageladder....34

15.1Minimumwages..........................................................................................................................34

15.2Prevailingwagesandbenefitsofweavers..................................................................................34

15.3Piecerateanddailywagerate....................................................................................................35

15.4Seasonalvariabilityinnumberofdaysworkedperweek...........................................................36

15.5Bonusandovertimepay.............................................................................................................36

15.6Differencesbetweensizesofproductionunitsthataffectincomeofworkers..........................36



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16.WageLadder..............................................................................................................................37

16.1WorldBankPovertyLineWage...................................................................................................37

16.2NationalPovertyLineWage........................................................................................................38

17.summarycalculationsforlivingwageandConclusions...............................................................38

References..................................................................................................................................................41

AbouttheAuthors......................................................................................................................................43



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LivingWageReportBhadohi,UttarPradeshIndiaRuralContextProvidedintheCarpetWeavingSectorIntroduction

1.BACKGROUNDThis report estimates a living wage for workers in rural areas of Eastern Uttar Pradesh, India, forNovember-December 2015. The report is preparedon thebasis of secondary data, aswell as primarydata, collected through field investigation in the rural areas of Bhadohi district, near Varanasi, UttarPradesh,witha focusonareaswhereworkers,engaged in thecarpetweaving industry, live.Thedraftreportwas furtherdiscussedwithstakeholders includingNGOs,academicians, localworkers (weavers),subcontractors and factory owners, after which appropriate corrections and modifications wereincorporated.

The study is based upon a new methodology developed by Anker and Anker (2016) that builds andimprovesontheirearlierworkonlivingwagespublishedbytheILO(seeAnker,2006a,2006b,2011).TheAnker methodology has gained widespread acceptance among diverse stakeholders globally and hasbeenusedtoestimatelivingwagesintencountriesforamulti-nationalcorporation,aswellasinrural,urban,andnon-metropolitanurbanareasin25locationsspreadacross17countries.Currentlythisisthe8th1ofthosestudiestobepubliclyreleased,andvalidatedwithstakeholderseitheratanin-personeventorthroughcollectionandincorporationofcomments(aswasdoneforthisreport).Additionalreportsarecurrently in the validation process or are under technical review and verification, and are beingscheduledforreleasethroughearly2017.The Global Living Wage Coalition brings together Fairtrade International, Forest Stewardship Council(FSC), GoodWeave International, Rainforest Alliance (RA), Social Accountability International (SAI),SustainableAgricultureNetwork(SAN),andUTZ,inpartnershipwiththeISEALAllianceandRichardAnkerandMarthaAnker,withthesharedmissiontoseecontinuous improvements inworkers'wages, inthefarms,factoriesandsupplychainsparticipatingintheirrespectivecertificationsystemsandbeyond,andwiththelongtermgoalforworkerstobepaidalivingwage.EachlivingWageBenchmarkcommissionedby the Coalition is made public to further this aim and to increase the opportunity for collaborationtowardpaymentofaLivingWage.

TheworkofTheGlobalLivingWageCoalition,includingthecommissioningofthisbenchmark,isfurthersupported by theMinistry of Foreign Affairs of theNetherlands, Directorate-General for InternationalCooperation(DGIS).Themanagementofthisworkandeffortstoensurethatresearchershearddirectly

1 The 6th study with results publicly released was Ethiopia. The full report is still being finalized for release in this case, but the resulting living wage estimate is available publicly along with basic information on the inputs used to calculate.



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fromproducersandstakeholderskeytothe issuesofworkers inBhadoiwasfacilitatedbyGoodWeaveInternational.

2.LIVINGWAGEESTIMATEOurestimateofa livingwage for ruralUttarPradesh forNovember-December2015 isRs.8,929 ($133)permonth.2Sincetheworkersinourstudyreceivewagesonapieceratesystemandtheydonotreceiveanyothercashallowances,bonuses,orin-kindbenefitsandarealsonotrequiredtomakeanystatutorypayments, the living wage (take home pay) required is the same as the living wage (gross pay) -calculatedtobeRs.8,929($133)permonth.

ThisreportexplainsindetailhowthelivingwagehasbeenestimatedforworkersinruralareasofEasternUPwherethereisaconcentrationofcarpetweavers.

3.CONTEXT

3.1RuralIndiaA large part (three-quarters) of India’s population live in rural areas and nearly 80 percent of thepopulation of UP resides in rural areas. Land is the single most important resource for livelihood.However,per capitaavailabilityof landhasbeendeclining; less thanone-thirdof the ruralpopulationdependson cultivationof theirown land for the ‘main’ sourceof income.More thanhalfof the ruralpopulationderivesustenancefrommanualcasuallabour,manyworkingaslandlesslabour.ThestatusofhumandevelopmentinUPcontinuestobequitelow,laggingbehindmostotherstatesofthecountryintermsofmajorindicatorsofsocialdevelopment.Childlabourhasafflictedmanysectors,includingcarpetweaving.Stepsarebeinginitiatedbythestateandnon-governmentalagenciestoeliminatechildlabour.It ishopedthatestablishingalivingwagemayhelptoendchildlabourinthesesectorsoftheinformaleconomy.

EconomicallyUP is among themostbackward statesof India,with ahighpercentageofmarginal andsmall land holdings, high population pressure, small manufacturing sector, structural deficiencies ininfrastructure,glaringregionalimbalancesandsluggisheconomicgrowth.

3.2Carpetweaving,economyandemploymentCarpetmaking,amongothermanufacturingactivities includingcement,vegetableoils, jute,brassware,sugar production, handloom, cotton & woollen textiles, leather & footwear, distilleries & breweries,glassware & bangles, is an important source of employment and income for Uttar Pradesh.Shahjahanpur,Mirzapur,Bhadohi,KhamariaandAgraarethemainhubsforthecarpetindustryinUttarPradesh.Thecarpetindustry,inUP,predominantlymakesuseofjuteandcottonfibrestocreatemediumqualitycarpets-aswegatheredfromlocalinformants,includingsubcontractorsandweavers.Basedonourdiscussionswith the local informantsanaverageof60knotsper square inch isappliedduring theknottingprocess.TheweaversoftheMirzapur-BhadohiregioninUParerenownedfortheirversatilityinweavingcarpetsofmanydesigns.

2The conversion rate used is INR 67 = US$ 1.



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Carpetweaving is an old Indian tradition, going back to the 16th century. Today, India is theworld’slargestproducer,saidtoaccountformorethan60percentoftheglobalcarpetproduction.Indiaistheworld leader incarpetexports,with36percentoftheglobalmarketshare(CEPC2015). Indiancarpetsare known worldwide for their design, fascinating colours and quality. The carpet industry is spreadacrossthestatesofRajasthan,Jammu&Kashmir,Punjab,UttarPradesh,AndhraPradesh,andHimachalPradesh.Hand-knottedandtuftedwoollencarpets,chainstitchrugs,puresilkcarpets,staple/syntheticcarpetsandhandmadewoollendureesaresomeofthevarietiesofcarpetforwhichthereisdemandinEuropeandAmerica.

Thisreporthasbeenpreparedonthebasisofdatacollectedthroughfieldstudyundertakenintheruralareas surrounding thedistrict townofBhadohi,which is knownas the carpet city. It is situated in theeasternpart ofUttar Pradesh, about 60 km to thewest of Varanasi city,with a populationof around1,554,000 people. Bhadohi is one of the main carpet centres of the Mirzapur-Bhadohi belt, and thecarpetindustryisamajorcontributortotheeconomicdevelopmentoftheregion.

Amajorpartofcarpetmanufacturingisweaving.TheMirzapur-Bhadohiregionisthelargesthandmade-carpetweavingcluster,engagingaround3.2millionpeopleintheindustry.Bhadohiemploys2.2millionrural artisans, a figure which includes a large number of migrant workers from other states.3 Someweavers, though it is difficult to estimate their numbers or proportion, have their own looms. Themajoritydonotowntheir loomssoweaveon loomsownedbymaster-weaversorcommissionagents.While there are a few factories employing 100-300 weavers, the majority of the carpet weaving inBhadohiareaisdonebyworkersengagedbycontractorsemployingsmallnumberofweavers(lessthan10).Usually,commissionagentsorotherbiggermanufacturersadvancesomemoneytotheweaversorcontractors to install looms. The contractors provide thematerial (yarn, threads etc.) and the specificdesignbasedonwhichtheweaversproducethecarpet.Suchweaversarecontractuallyboundtoweavethecarpetforthosewhohavegiventhemthemoneyinadvance.Thiscontractisonlysociallysanctionedasthereisnoformallegalagreement.Bhadohi-basedorganisationsaccountforamajorshareinthetotalcarpetexportsofIndia.

4.CONCEPTANDDEFINITIONOFALIVINGWAGETheconceptofalivingwagehasbeendevelopedtoensurethatworkersandtheirfamiliesdonotliveinpoverty, but are able to lead a decent life.Wages should be sufficient to support workers and theirfamilies to be able to afford a basic lifestyle, considered decent by society at its current level ofdevelopment.Workers should receive a livingwage in normal working hours without having toworkovertime.

TheGlobalLivingWageCoalitionMembershavedefinedalivingwageas:

“Remuneration received fora standardworkweekbyaworker inaparticular [timeand]placesufficienttoaffordadecentstandardoflivingfortheworkerandherorhisfamily. Elements of a decent standard of living include food, water, housing,education, healthcare, transport, clothing and other essential needs includingprovisionforunexpectedevents.”4

3http://dcmsme.gov.in/dips/Distt.%20Industrial%20Profile%20of%20Bhadohi.pdf 4 http://www.isealalliance.org/sites/default/files/GLWC_who_we_are.pdf



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The Global Living Wage Coalition consists of Fairtrade International, Forest Stewardship Council,Goodweave, Rainforest Alliance, Social Accountability International (SAI), Sustainable AgricultureNetwork (SAN), andUTZ in partnershipwith the ISEALAlliance and global livingwage experts RichardAnkerandMarthaAnker.

5.HOWOURLIVINGWAGEISESTIMATED

5.1ThedataThisreportisbasedonanalysisofsecondarydatacollectedfromdifferentsources,includingtheCensus(2011),NationalSampleSurvey(NSSO,2012a,2012b),USDA-NAL(2014)aswellasprimarydatacollectedthrough field investigation. The field investigation was launched after undertaking a scoping visit toBhadohi district in UP. The scoping visit was undertaken to gain a preliminary understanding of thecarpetweavingindustry,howitoperatesandtoidentifythemainlocationoftheweavingactivity.Onthebasisofthepreliminaryscopingvisit,theruralpartofBhadohiwasidentifiedassuitableforundertakinga detailed field investigation, as it houses a considerable number of weaving operations in UP.Accordingly, the instruments forcollectingprimarydata fromthe fieldweresuitablymodified fordatacollection.Thepreparationofthemodeldietandestimationofitscost,thecostofhousing,thecostofnon-food and non-housing (NFNH) items including health, children’s education and other costs for adecentlivinghasbeenpreparedonthebasisofdatacollectedthroughfieldinvestigationaswellasfromsecondarysources.

Primarydatawascollectedthrougharigorousprocessof investigation,which lastedtwoweeksduringthefirsthalfofDecember2015,byvisitinglocalmarkets,neighbourhoodshops,weavingsites,workers’homes, schools and local dispensaries in as many as 15 different locations within the area of ruralBhadohi.Theweavingsitesvariedfromlargefactories,whichemploylargenumbers(40-100+weavers)tosmallsiteswith2-10looms,whichemploysmallnumbersofworkers(lessthan10).Thefocusoftheinvestigation was to understand the actual conditions of working and the living environment of theweaversasacasestudyof ruralworkers inUP,andtoestimatea livingwagewhichshouldbeable tomeetthecostofadecentlifestyle.Pricesofgrains,cookingoil,eggs,milkandmilkproducts,meat,fish,pulses, fruits and vegetableswere collected frommultiplepoints located in the15different localities.Workers’homeswerevisitedtoestimatethecostofhousingandtounderstandtheconditionofhousingand the environment in which they live. The field investigating team also visited dispensaries tounderstand how workers took care of their routine health problems as well as schools to gain anunderstandingofwhateducationwasavailableandhowmuchitcost.

5.2TheAnkermethodologyThis report is based on the living wage benchmarkingmethodology developed by Richard Anker andMartha Anker, improving on their earlier work on living wages published by ILO (see Anker, 2006a,2006b,2011).TheAnkermethodologyprovidesaprocesstomeasurethelivingwageinlocalconditions,taking into account the cost of food, housing, health, education, transport and other related costs toprovideadecentlifeforafamily.

Theprinciplesandinnovativeaspectsofthismethodologyinclude:

• Theassumptionsusedtoestimatealivingwageareclearlystated,sothatallthestakeholdersunderstandhowlivingwagebenchmarksareestimated,andwhatworkersandtheirfamilieswouldbeabletoaffordiftheyearnedalivingwage.



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• Livingwageisbasedonnormativestandardssuchasanutritiousdiet,healthyhousing,adequatehealthcareandeducationforchildren.

• Livingwageisbasedonarealisticestimationofcostscalculatedspecificallyforagiventimeandplace.Thereforealivingwageincreaseswitheconomicdevelopmentandrisingincomes.

• Separatelivingwagebenchmarksarenecessaryforruralandurbanareas.• Wagespaidbyestablishmentstocomparewithalivingwageincludeallformsof

remunerationincludingfairandreasonablevalueofbenefitspaidin-kindandcashallowances,excludingovertime.

• Thelivingwagemethodologyisinternationallycomparableasthebenchmarksarebasedonthesameprincipleseverywhere.

• Thelivingwagemethodologyispracticalandrelativelyinexpensive,asitusesajudiciousmixofcriticalanalysesofsecondarydataandrapidassessmentmethodsforcollectionofprimarydata.

ThefiguresbelowexplainhowthelivingwagewasestimatedfortheworkersofruralUP.

Table1:Componentsofabasicbutdecentlifeforafamily,movingfromcostofabasicbutdecentlifetonetlivingwage,andmovingfromnetlivingwagetogrosslivingwage

Source:Anker&Anker(2016).



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5.3EstimatingthelivingwageA livingwage is the amountof take-homepay required for a family tomaintain a decent standardofliving.The livingexpensesarecalculatedforabasicacceptable livingstandardfor thereferencefamilysize,basedonanestimateof foodcosts,housingcosts,preliminaryestimateofnon-foodnon-housingcosts with post-check adjustments (as necessary) for education, health care, transportation, andadditionalfundsforsustainability,emergenciesandsocialparticipation.Theassumptionsandproceduresusedtoestimateeachofthesecostsarediscussedinthefollowingsections.

SECTIONI.CostofaBasicbutDecentLifeforaWorkerandTheirFamily

6.FOODCOSTS

ThecostoffoodforalivingwageinruralUttarPradeshhasbeenestimatedonthebasisoffoodpricesforalow-costbutnutritiousdietforanaveragefamilyoffive.

Theenergyrequiredforbasicbodilyfunctions(indicatedbyBasalMetabolicRates)isdeterminedbytheSchofieldequations,whichisbasedoninputsofage,genderandbodysize.Thebodysize(weight)inputis based on an assumption of a BMI of 21 (suggested by FAO/WHO/UNO, 2004) for the height of anaverageIndianadultmaleof1.64metresandIndianadultfemaleof1.5metres.Oncethebasicenergyrequirementsaredetermined,theseareadjustedforthephysicalactivitylevels.Childrenareassumedtohavemoderate activity levels, and adults in our case, because of the nature of their occupation (notinvolvingnonmechanised farmwork)arealsoassumedtohavemoderateactivity levels.Aftermakingsmall adjustments for the extra calories needed for pregnancy, our calculations suggest the calorierequirementof2,157perperson.

6.1GeneralprinciplesofmodeldietThemodeldiethasbeenpreparedon thebasisof the followinggeneralprinciples toestimatea livingwage:

i) Tofindthenutritionalcontentoftheitemsthatareincludedinourmodeldiet,wehaveusedtheNationalDatabaseprovidedbyIndianCouncilofMedicalResearch(ICMR),whichprovidesthecalorie,proteinandfatcontentofeachfooditem(basedonedibleportions).TheedibleportionshavebeencalculatedonthebasisofdataprovidedbyUSDANAL.

ii) Thedietshouldbepalatable,namely,reflectlocalfoodpreferences.Thechoiceofvariousitemsunderdifferentfoodgroupsrepresentsthecommonlypurchaseditemsofacceptablequality,includingnon-vegetarianfood.Forinstance,undercereals&grains,riceandwheatareincluded,thetwocommoncerealsinIndia,whereaspreparedcerealsareexcludedasthesearenotpopularoptionsintheareaofstudy.Potatoesareincluded,asitisanimportantsourceofstarchandakeyitemintheIndiandiet.Thecookingmediumdiffersindifferentpartsofthecountry;refinedvegetableoilormustardoilisincludedasitismostcommonlyusedinthispartofthecountry.Inadditiontotwogreenandtwoothervegetables,tomatoesandonionsareincludedwhichareimportantitemsinthepreparationofIndianmeals.



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iii) Thedietisrelativelylowincostwhileitis‘nutritious’.Forfooditems,wheredifferent

varietiesareavailable,(forinstance,vegetables,fruits,andpulses),onlylowercostitemshavebeenincluded.Inpulses,moongdalandchanaareincludedwhicharecheaperthanotherpopularpulsessuchasArharandUrd.Onlybananasareincludedinfruit,astheyareavailableinallseasonsandarealsocheaperthanotherfruit.Duetothehighpriceofgoatmeat,ithasbeendroppedfromourmodeldiet,andthenon-vegetariandiethasbeenrestrictedtochickenandfish.

iv) BasedonWHO/FAO(2007)guidelines,10-15%ofcaloriesmustcomefromproteins.BasedontheAnkers’methodology,theproportionofcaloriescomingfromproteinsshouldincreasewiththestatusofdevelopmentofthecountry,andforalowermiddle-incomecountrysuchasIndia,11-12%isconsideredacceptable.Furthermore,limitedamountsofanimal-basedfoodsaswellasprotein-rich,plant-basedproductsareexpectedtobeincludedinamodeldiet,despitethehighcostpercalorie.Twotypesofpulseshavebeenincluded,astheseareimportantsourcesofproteinintheIndiandiet.Underdairyproducts,weincludemilk.Expenditureonmilkproductsislimitedasmanyofthem(especiallycurd)arepreparedathomefromrawmilk.MeatisnotapopularsourceofproteinamongHindusinNorthIndia,butapreferredpartofthemealamongMuslims.Thechoiceofmeatisrestrictedtochickenandfishwhicharenotonlymorepopularandcheaper,butalsotheirconsumptionhasnotbeensubjecttopoliticalorreligiousinterventions(unlikeporkandbeef).Inourfinaldiet,11.5%ofthecaloriescomefromprotein,and18.2%ofthecaloriescomefromfats.Itincludesonecupofmilkperpersonperdayandabouttwoportionsofmeatperweek.

v) WHO/FAOrecommendthatapersoneatsatleast400grammesoffruitsandvegetablesperday(notincludingrootsandtubers,butincludinglegumesandpulses).However,thisnormisnotmetbyamajorityofpeopleeveninthehigh-incomecountries.Hence,Ankers’methodologysuggestsatleast300grammesoffruitsandvegetablesperpersonperday,withanincreaseof25grammeswitheachdevelopmentlevel.Thus,forlowermiddle-incomecountries,325gramsoffruitsandvegetables(excludingrootsandtubers)perpersonmustbeincluded.Actualconsumptiondatasuggeststhatvegetableconsumptionisabout135grammespercapitaperday(forallvegetables)and35grammesoffruits,percapitaperday.Theportionsofvegetablesandfruitsinourdietmeettherequirementsof325grammes(includingpulses).

vi) Consumptionofsugarandedibleoilareincludedinthemodeldietforpalatability.

vii) Basedontheinformationavailablefromthehouseholdexpendituresurvey,5%hasbeenaddedtothefoodcostsforsalt,spices,condimentsandsauces.Althoughthisishigherthanthetypical1-3%observedinmostothercountries(Anker&Anker,2016),ourestimateisslightlylowerthantheestimategivenbytheNationalSampleSurvey(NSSO,2012a),whichsuggeststhatapproximately6%ofthetotalfoodexpenditureinruralUPisattributedtospicesalone.Sincefewervegetables,fruitandtypesofoilareincludedinourmodeldiet,weadd10%tothefoodcoststoensurevariety.Recentliteraturealsoindicatesthatmore



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varieddietsarebeingconsumedatallincomelevels.5Also4percenthasbeenaddedtotakeintoaccountsomewastageorspoilageoffood.

viii) Thecostofthemodeldietisdeterminedbyaddingthefoodpricestothemodeldiet.Before

finalisingthemodeldiet,asafinaliteration,adjustmentshavebeenmadebyreducingthosefooditemswhichhaveahighcostperproteinorhighcostpercalorie,withoutcompromisingonthebasicprinciplesthatguidethepreparationofmodeldiet,likeconformitytolocaltastes,preferencesandnutritivecontent.Forinstance,althoughguavaandbananaswereincludedinitially,guavahasbeenremovedasitisanexpensivesourceofcalories,butatthesametimethequantityofbananahasbeenincreased.Similarly,chicken,whichislessexpensive,wasincludedinsteadofgoatmeat,whichismoreexpensive.

6.2ModeldietTable2:ModeldietusedtoestimatelivingwageforruralUP FOOD EDIBLE

GRAMMES per person per day

PURCHASED GRAMMES per person per day

COST PER KILO (Rs.)

COST (Rs.) per person per day

1a. Cereals and grains

Wheat 203 203 16.20 3.28

Rice 157 157 20.00 3.14

2a.Roots and tubers

Potatoes 113 119 12.00 1.42

3. Pulses, legumes, beans

Moong 14 14 120.00 1.68

Chana 14 14 80.00 1.12

4. Dairy Milk 240 240 27.00 6.48 5. Eggs Eggs 4 4 71.90 0.32 6. Meat & fish

Fish 4 7 70.00 0.47

Chicken 8 10 160.00 1.67

7a. Greenleafyvegetables

Spinach 42 59 20.00 1.18

Cabbage 42 53 12.00 0.64

5Gaiha R., Kaicker N., Kulkarni V. and Thapa G. (2014). “Dietary Shift and Diet Quality in India: An Analysis based on 50th, 61st and 66th rounds of NSS” in Jha R., Gaiha R. and Deolalikar A. (eds), Handbook on Food, Edward Elgar Publishing, Cheltenham, UK, ISBN: 978-1-78100-428-9.



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7b. Othervegetables

Cauliflower 42 67 12.00 0.81

Onion 42 47 30.00 1.41

Tomatoes 42 47 30.00 1.40

8.Fruit Banana 85 133 30.00 3.98

9.Oils&fats Refined oil 20 20 88.00 1.76

10.Sugar Sugar 27 27 32.00 0.87

11.Non-

alcoholicbeverages

Tealeaf 2 2 190.00 0.42

Totalcost Rs.32.05

Total cost (after taking intoaccount spices andcondiments, spoilage andwastage, and taste forvariety)

Rs.38.14

6.3FoodpricesPrices for a variety of qualities and quantities of foods from different types of venue (both open airmarketsandsmallneighbourhoodstores)whereworkerstypicallyshopwerecollected.

6.3.1CollectingfoodpricesThefirstauthorofthereportspentthreedaysinthefieldtrainingthelocalresearcherstocollectthepricesofvegetables,fruit,cereals,pulses,meat,fish,oilandotherfooditemstoestimatethecostofourmodeldiet.Inordertoestimatethecostofourmodeldietusingthepricesthatworkersactuallypay,theresearchteamcollectedfoodpricesfromplaceswhereworkersusuallyshop.Theresearchteamvisitedatleasttwotothreevendorssellingvegetablesandfruitinmarketsandalsotheneighbourhoodshopsineachofthelocations.Inthemarkets,manyvendorssitnexttoeachothersellingpopularvegetablesandfruit.Inmostcases,workersvisitthesemarketplaceseitheronfootoronbicycletoshop.Theneighbourhoodshopsarelocatedveryclosetotheresidentialareaswherealimitedvarietyofvegetablesandfruitaresold.Theresearchteamalsovisitedafewlargelocalmarketswheregrain,cookingoil,wheat,pulses,sugarandspicesaresold.Shopssellingmeatandfishareusuallylocatedalittlewayfromthemainmarket.FoodpriceswerecollectedfromthesedifferentshopslocatedaroundthedistrictofBhadohiandAurai(nexttoBhadohi).Whilesomeofthevegetablesandfruitaresoldbyweight,othersaresoldbyunitornumber.Accordinglypricesarequotedperkiloorlitreorfornumberofunits.Oftenpricesvarydependingonthequalityof



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vegetablesandfruit,andalsodependingonthequantitypurchased.Forexample,pricesofcerealssuchaswheatandricecouldbelessiftheywereboughtinquantitiesabove5or10kilograms.Weusetheleastexpensiveforthequantitythatispracticalforworkerstobuyatonetime.Pricesoffishalsovarydependingonthetypeandsizeofthefish.Weweighedeggsandbananas,whichwereoftensoldinunits,inordertodeterminetheirpriceperkilogram.Similarlycauliflowerwasalsoweighedtocalculatethepriceinkilograms.Vegetableswerealsoweighedbeforecleaningandaftercleaning(pealing)todeterminetheedibleproportion.Inordertoreducethecostofthemodeldiet,thelowestpricedvarietywaschosenaftercollectingpricesforarangeoffruit,vegetables,pulsesandoil.Carehasbeentakentoensurethatthefoodusedinthedietisofacceptablequalityandquantity,forexample:

• MoongandChanadalwerechosenastheyareamongtheleastexpensivepulses• Spinachandcabbagewerechosenfortheleafyvegetablesastheirpricewascheaperthanmany

others;cauliflowerwasaddedasathirdvegetable• Onlybananahasbeenincludedforfruitasmostotherfruitisseasonalandmoreexpensive• Onlychickenandthecheapestvarietyoffishhavebeenincludedinthenon-vegetariandietas

theyarecheaperthangoatmeat.• Potato,tomatoandonionshavebeenincludedinthedietastheyareconsideredessential

ingredientsofeverydaycookinginIndia.

6.3.2AnalysisoffoodpricesForallthefoodgroups,wehaveincludedthelowcost(butcommonlypurchased)varietiesinourmodeldietaftercollectingpricesofallvarieties.Thelowestprice(priceofthevarietywhichisthecheapest)ofeachitemavailableinthestore/market,hasbeentakentocomputethemedianpriceforallmarketsforthatitem.Onthebasicoftheseprices,thecostofthemodeldietwascalculated.

6.3SummaryoffoodcostsThecostofthemodeldiet,aftertakingintoaccountspicesandcondiments,spoilageandwastage,andtasteforvariety,isRs.38.14perpersonperday,whichamountstoRs.5,801permonthforafamilyoffive(assuming30.42daysinamonth).6

7.HOUSINGCOSTS

Housing is a basic human requirement in a civilised society. For an average citizen, owning a housemeanssignificanteconomicsecurityanddignity.Thereisanincreasingrecognitionofacloserelationshipbetweenhousingandhealthandwellbeingofthepeople(Gopalan&Venkataraman,2015).

6 Through the Mid Day Meal Scheme, every child within the age group of six to fourteen years studying in a government school is supposed to be provided hot cooked meal meeting nutritional standard, free of charge every day except on school holidays. However, during the conversations with several workers and contractors, we were told that workers, in general, prefer to send their children to private schools rather than government schools. The reasons for preferring private schools included English as medium of instruction and better quality of education imparted in private schools, and hence we do not take into account, the value of free meals provided by the School.



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7.1LocalstandardforbasicacceptablehousingAsafirststepitwasdecidedthatthesizeofthefamilyconsistsoffivepeople.Thisallowedtheauthorstoestimatethecostofbasichousingthatalsomeetsacceptablestandards.Accordingtothe8thPlanningCommission of India (1995), the physical dwelling unit is not the sole element of housing; equallyimportant is the provision of basic services like potable water, sanitation, drainage and electricity. Inaddition, the type and location of housing is inextricably linked to employment and affordability. ItshouldbenotedthatagoodpercentageofIndia’sruralpopulationstillliveinkutcha7(non-permanent)houses,whicharenotoftensafeorhygienic.

HousingisanacuteprobleminIndia.Itisestimatedthatthereisashortageofaround18millionhouses,with99%ofthisintheeconomicallyweakersectionsofsociety.Manyinternationalorganisations,includingtheGlobalLivingWageCoalitionhaveagreedoncertainminimumhousingparameters,foradecentlifestyle,whichinclude(i)privacy;(ii)security;(iii)hygiene;(iv)safety;(v)potablewater;(vi)cleantoilet;and(vii)fireandelectricalsafety.Indiahasvariousnational,stateandlocalgovernmentdepartments,authorities,andschemesconcernedwithprovisionofaffordablehousingandalsosettinghousingstandards.Commonamongtheacceptablehousingnormsadoptedbymanyoftheseauthoritiesare:

• Minimumtwolivingroomsincludingabedroom• Ampleveranda(sitout)space• Builtupareaofhouseshouldnotexceedonethirdoftotallandarea• Separatekitchenwithpavedsinkorplatformforwashingutensils• Tubewellordugwellwithinaquarterofamilefromthehouse• Cattleshedshouldbeataminimumdistanceof25feetfromthehouse• Windowareashouldbeatleast10%offloorarea• Sanitarylatrineshouldbepresent• Provisionforproperwastedisposal

ThestandardoflivingspacerecommendedforhousingoftheLowIncomeGroup(LIG)isaminimum517sq.feetor48.03squaremetres(GuidelinesforAffordableHousinginPartnership,MinistryofHousing&UrbanPovertyAlleviation,2013).Therefore,ourhousingstandardsforruralUPaimstoensurethatthehousesareofpermanentanddurablestructure-basedonminimuminternationalstandardsforhealthyanddecenthousing.Ahouseneedstohave:

• About48squaremetersoflivingarea(basedontheaverageofthestandardsoflivingspacerecommendedforLIGhousing)

• Minimumtworooms(livingroomandbedroom),pluskitchen.Separatekitchenorcookingareainsidethehouse

• Floormadeofcementormosaic• Wallsmadeofconcrete/burntbrick/un-burntbrick/wood/stone• Roofmadeofburntbrick/concrete/tiles/metalsheets• Ceilingwithaminimumheightof2metres• Flushtoilet,evenifshared/pitlatrinewithslab

7 A kutcha house is a temporary and makeshift structure usually made of mud and straw.



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• Waterfromasafesource,handpumporwellinthevicinity• Liquidpetroleumgas(LPG)/Pipednaturalgas(PNG)/fire-woodavailableascookingfuel• Electricity/keroseneavailableasstandardsourceoflighting• Thehousemaintainedinareasonablecondition

7.2RentforacceptablehousingTheresearchteamvisited27residencesofweavers,includingtwosinglerooms(whichwerehiredonrentbymigrantworkerswholivedonasharedbasis),in15differentlocalities.Forthe25housesvisited(excludingthetwosinglerooms),thequalityofmaterialusedandtheconditionofhousesandtheirenvironmentwerenotfoundtobesatisfactory.Manyofthehouseswere:

• inhabitedbyalargenumberofpeople• notbuiltwithmaterialmeetingwithinternationalstandardsforasafeanddurablehouse• notfoundingoodcondition.

AsTable3belowshows,ofthehouseswevisitedinBhadohi10hadfivetosixpeoplelivinginthemwhile15houseshadmorethansevenpeopleusingthespace.Thirteenhouseshadthreetofiveadults,whileanothersevenhouseshadmorethanfiveadultslivingineach.Fourofthehousesvisitedhadwallsmadeofmud/clay,18ofthemhadwallsmadeofburntbricks,onlytwohadwallsofconcreteorRCCandonehadstonewalls.Sixteenofthehouseshadaconcreteroof,eighthouseshadroofmadeofburntbrickandonehadaroofmadeofstone/slate.Manyhouses(13)hadamudfloor,ninehadaconcretefloorandthreehadafloormadeofburntbrick.Mosthouseshadafoundationbuiltatmorethan2feetaboveground,exceptthree.Twoofthehouseswerebuiltatgroundlevelwithoutanyfoundations.Whiletheceilingsofallhousesweremorethan7feethigh,thedoorsofsomeofthehouseswerelessthan6feethigh.Mosthouseshadmoderatequalityofventilationwithonewindoweachineachroom;onlyeighthouseshadtwowindowsineachroom.Allthehouseshadtwoormorerooms,somewithmorethanfiverooms.Sixofthehousesvisitedhadalivingspacebetween200and400sq.ft.;fivehad400-500sq.ft.and16ofthemhad500sq.ft.ormorespace.Whileafew(10)hadseparatebedroomsonlytwohadaseparatelivingroom.Onlysixhouseshadaseparatekitchenandonlythreeofthesewereinsidethehouse.Onlythreehouseshadpipedwaterinsidethehouse,whiletherestdependedonahandpumpfordrawingwaterfromaborewell,whichwassituatedinthevicinityoutside,usuallysharedbyseveralhousesintheneighbourhood.Threehouseshadatoiletinsidethehousewhilemostoftherestusedopenfields/spacesforbathinganddefecation.Twohouseshadarefrigerator,sixhousespossessedamotorcycle,while20ofthemhadatelevision.Allhouseshadatleastonefan.Whileallthehouseshadaccesstoelectricity,nonereceiveda24-hoursupplyofelectricity,mostofthemreportingaround8-10hoursofsupplyperday.Elevenhousessurveyedwerefoundtobeingoodcondition,meetingthestandardsoutlinedabove,whileotherswereinpoororlessthansatisfactorycondition.Manyofthehouseswerenotmaintainedwellandneededrepairs,whileotherswerenotmeetingtheminimumstandardsofdecentliving. Images1-4showphotographsofsomeofthehousesvisitedbytheresearchteam.Thefollowingtableshowsasummaryofthestatusofhousesvisitedduringthefieldstudy.



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Table3:StatusofhousesvisitedinBhadohi

CHECKLIST DETAIL (surveying 25 houses)

Adequate space Only 14 houses had 48 sq. metres or more space Separate bedroom 10 houses had separate bedroom(s) Separate kitchen/ cooking area inside the house

6 houses had separate kitchen/cooking area inside

Floor made of cement/mosaic

9 houses had cement floor

Walls made of concrete/ burnt brick/wood/stone

21 houses had walls made of standard material

Roof made of burnt brick/ concrete / stone/ burnt brick/ tiles/ metal sheets

All houses had roof made of standard material

Ceiling with a minimum height of 2 metres

All houses had roof with more than 2 metres of height

Quality of ventilation All houses were found to have moderately good or good ventilation

Flush toilet/pit latrine with slab

3 houses had toilets inside 5 had shared toilets outside

Piped water 3 had piped water inside the house Hand pump or well in the vicinity

23 had access to hand pump/well near the house

LPG/ PNG as cooking fuel

3 houses used LPG for cooking

Fire-wood as cooking fuel 22 houses used firewood/cow dung cake Electricity/kerosene source of lighting

All houses had electricity supply for a limited period of time every day supplemented by kerosene

Condition 11 houses were well-maintained 4 were in moderately good condition 10 were in poor condition



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Image1:Houseswithtileroof,mudwallsandmudfloor

Source:Theauthors

Image2:Housewiththatchedroof,mudwallsandmudfloor

Source:Theauthors



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Image3:Abetterhousewithcementedfloor,plasteredwalls&reinforcedcementroof

Source:Theauthors

Image4:Anotherclusterofhouses

Source:Theauthors



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TheabovedescriptionseemstoreflectthegeneralconditionofhousinginruralUP.HoweverthehousesintheareawestudiedseemtobeofbetterqualitycomparedtotheconditionoftheaveragehouseinruralUP.Thismaybeexplainedbythefactthatmostworkershaveasteadyincome,thoughsmall,fromcarpetweaving,whichmaynotbethecaseinmanyotherpartsofruralUP.Accordingto2011Census,out of the total number of houses in rural UP, only 38.72 percent were classified as “good”, 53.90percenthouseholdsas“liveable”andtheremaining7.38percentas“dilapidated.

An acceptable standard of floor is made of cement, mosaic or burnt brick but 83.47 percent of thehousesofruralUPhaveamudfloor.Only4.29percenthasburntbrick,11.05hascementedfloor,0.55percenthasstonefloor,0.32percenthasmosaic/floortilesItisclearthatthevastmajorityofhousesinruralUPdonotmeettheminimumstandardsofdecenthousing.

Howevermostofthehouses inruralUPappeartohavewallsmadeofacceptablematerial–concrete,burntorunburntbrick,woodorstone.Inoursurvey64.20percenthadwallsmadeofburntbrick,23.89percenthavewallsofmudorun-burntbrick,while1.55percenthavestonepackedwithmortarand0.44percentofhouseshavewallsmadeofconcrete.

Similarly, againstour standardnormof roofmadeof concrete, stone, slate,burntbrick, tilesormetalsheets, 31.48 percent of rural houses have a roof of burnt brick, 13.22 percent have roof of stone orslate,13.82percenthavearoofofconcrete,0.60percenthavearoofmadeofmachinemadetiles,theremaining 41 percent of houses including 9.77 percent have a roof made of hand-made tiles, 27.56percent have a roof made of thatch/grass/wood/bamboo/ mud, and the rest have other materialincludingmetalsheets.Nearly60percentofthehouseshadnomorethantworoomsanddidnothaveaseparatebedroomandveryfew,ifany,househasaseparatekitchen.Mosthouseshadaccesstowateratadistanceof10-50metreseitherthroughhandpumporbore-well.

7.3RentalequivalentvalueofbasicacceptablehousingAsexpected,mostweaverswevisitedliveintheirownhouses,whichmadeitdifficultforustorelyonnationalstatisticsonhousingexpenditure.WefoundthatinBhadohi,onlythemigrantworkerslivedinrentedroomsonsharingbasisorlived/sleptatnightinthesamespaceastheyworkedduringtheday.Therefore,itwasnotpossibletoestimatetherentalcostofthehousesinwhichtheweaverslived.Thus,wehadtorelyonadifferentapproachtoestimatehousingexpenditure.

Oneapproachistolookattherentpaidbythemigrantworkersforsmallerdwellings,andscaleituptomeettherequirementsofthehousingstandard.Forinstance,themigrantworkersstayinrentedrooms(with no other facilities) of about 144 sq.ft., paying Rs.800 permonth,whichmay be extrapolated toRs.2,872fora517sq.ft.(48.03squaremetres)house.Sincethishousedoesnothaveamenities,wemayaddRs.500permonthasadditionalcostofamenitiestogetthetotalrentofRs.3,372.

Inanother location,aschoolteacherpaidarentofRs.3,500forahousewithanareaof900sq.ft.andbasic facilities (kitchen, toilet, bathing facilities, etc). This again can be extrapolated to Rs.2,011 permonthfora517sq.ft.house(48.03squaremetres).

A linear extrapolation is not alwaysuseful in the relationshipbetween rent and area, especiallywhenamenitiesareincluded,sinceamenitiesaremoreexpensivepersquaremetre.Therentpersquarefootdecreasesassize increases forhouseswithamenities (ithasbeenfoundforVietnamthat the fall is toalmost half). Using a correction for higher cost per square footwouldmake this Rs.4,022 permonth.



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Thesefiguresdogiveusarangetoworkwith,sowehavetwoestimatesofrent:Rs.3,372thatdidnotmeetourhousingstandard(intermsofamenitiesandmaterials),andRs.4,022forahousethatmetourstandards.

7.4RentalequivalentcostofowningahouseAnotherapproachistolookatthemonthlyusercostofabasicacceptablehouse,whichisestimatedbycalculatingthecostofconstructingabasicacceptablehouseandtheassumptionsforitslifeexpectancyand its maintenance costs. Keeping the built area of around 53.8 sq. metres8 (579 sq. feet) as therecommendedareaforadecenthouse,thecostofconstructingahousewascalculatedonthebasisofinformationprovidedbytheCentralPublicWorksDepartment(CPWD),GovernmentofIndia.TheCPWD(2014)estimateisRs,1,418.80foronesquarefoot.Thecostofconstructingahousewiththefloorareaof517sq.ft.,withtwosmallroomsandakitchen,toiletandbathingfacilitywithbasicparametersofsafetyanddurabilityhasbeencalculatedasRs.821,526.

The annual cost is givenby the cost per year (equal to depreciationon a straight line basis), plus themaintenancecostsandinterestcosts(i.e.costofborrowingortheopportunitycostof investedfunds).Assumingdifferentscenariosof lifeexpectancyof20yearswith1percentmaintenance,30yearswith1.5percentmaintenanceand40yearswith2percentmaintenance,theaveragemonthlycostofhousingisgiven inTable4.We ignore the interest ratescosts,asaneffective financial system isabsent in theruralareas.Also,mostoftheworkers,weassume,wouldhavebuilttheirhouseoutofsavingsoftheirownor inheritedwealth.WefeelthatthehousebuiltusingCPWDstandardswould last forat least40years with 2 percent maintenance. Hence, this scenario is assumed for our calculations of user cost,whichcomesouttoRs.3,081permonth.

7.5SummaryofrentorequivalentcostforacceptablehousingWedecidedtouseourestimateofRs.3,081fromtheusercostapproachforhousingcosttobeontheconservativeside

Table4:ImputedrentbasedonconstructioncostandlifeexpectancyITEM SIZE/COST Area 579 sq.ft. (53.8 sq.metre) Rate per sq.ft. (Rs.) Rs.1,418.80 Cost of construction Rs.821,526

LIFE EXPECTANCY 20 YEARS

30 YEARS 40 YEARS

Annual depreciation cost (Rs.) Rs.41,076 Rs.27,384 Rs.20,538 Annual maintenance cost (%) 1.0% 1.5% 2%

8 Assuming a living space of 48 sq. metres and increasing it by 12% to account for thickness of outer and inner walls.



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Annual maintenance cost(Rs.)

Rs.8,215 Rs.12,323 Rs.16,431

Total annual cost (Rs.) Rs.49,292 Rs.39,707 Rs.36,969 Total monthly cost (Rs.) Rs.4,108 Rs.3,309 Rs.3,081

7.6UtilitiesandotherhousingcostsInordertoassessarealisticcostforhousing,thecostofwater,electricity,cookingfuelandlightingareincluded. It is difficult to calculate the cost ofwater as the sourceofwater inmost cases is thehandpumporborewell,whichinmanycasesareprovidedbythelocalgovernment,andfreeofcost.

7.6.1FuelforcookingandforheatinwinterAccordingto2011Censusdata,54.40percentofhouseholdsinruralUPusefirewoodforcooking,27.86percentusecowdungcake,while6.39percentuseLPGforcooking.Outofthe25housesvisitedinourfield study, 22 of them used a combination of firewood and cow dung cake as the source of fuel forcooking as well as for heating in winter months; three of the households used LPG for cooking andfirewoodforheating.Itwasnotpossibleformostoftherespondentstocalculatethecosttheyincurredforcookingfuel.However,wewereinformedthatonanaverage,20-30piecesofcowdungcakeswereused for cooking per day for a family of six - eightmembers. Typically, the cowdung cakeswere notpurchased,butweremadebythewomenofthefamily.Themarketpriceofonepieceofcowdungcakewas found to be Rs.1. Therefore, on average, a family spends Rs.20-30 per day for cooking fuel,amounting to about Rs.600-900 permonth. Themarket price for firewoodwas Rs.17 per kg, and theamountoffirewoodrequiredtocooktwomealsinadayisapproximately2kilograms.Again,firewoodisnotoftenpurchased,butcollectedfromnearbyareas;butwhenthecostofbuying is imputed, itturnsouttobeapproximatelyRs.35perday,totallingRs.1,050permonth.TheLPGcylindercostsRs.42.67perkg,anditwasfoundthata5kgcylindertypicallylastsforseventoeightdays(ifnootherfuelsourceisused).ThisamountstoRs.853permonthfuelcost.

Ifwetaketheaverageofthecostincurredonthesesourcesoffuel,wegettheexpenditureasRs.883permonth.

7.6.2CostoflightingMorethan23percent(23.77%)ofruralUPhouseholdshaveaccesstoelectricityasasourceoflighting,whileover75percentusekeroseneasthesourceoflighting.InthesampleofhousesthatwecoveredinBhadohi,everyhousehold,barringtwo,hadelectricityconnection;butthepowersupplyvariedfrom8-16 hours per day. In the absence of electricity, kerosene was mostly used for lighting. The cost ofelectricity per household ranged from Rs.240 to Rs.400 permonth. Kerosene is available through thepublicdistributionsystem(PDS)atsubsidisedprices,butmostoftheseworkersdidnothavethecardtoavailthebenefitsofPDS,orthefairpriceshopwasnoteasilyaccessible.Hence,theyboughtkerosenefrom the open market at a price of Rs.30 per litre. The average consumption of kerosene by thehouseholds we visited was about 3-4 litres a month amounting to about Rs.105 per month perhousehold.ThecostoflightingthereforeamountstoRs.425permonth.Inwinters,firewoodwasmostlyusedforheating,butthiswasnotboughtfromthemarket.Moreover,thesamefirewoodthatwasusedforcookingwasusedforheatingaswell.



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Togetutilitycosts,wecanaddthecostoflighting(Rs.425)tothecostoffuel(Rs.883),whichcomestoRs.1,308permonthperhousehold.

To validate this amount with the secondary data available in the 2011-12 consumption expenditureseriesof theNational SampleSurvey,weexamined theamount spenton fuel and lightbyanaveragehousehold in rural UP. In rural UP, the average monthly per capita expenditure on fuel and light isRs.99.12,whereas theaveragemonthlypercapitaexpenditureon food isRs.612.28.Thus, the ratiooffueltofoodexpenditureis16.2%.

Ifweusethis ratioandthecostofourmodeldiet (calculated in theprevioussection),ofRs.5,801permonthperfamily,theapproximateutility(fuel+light)costperfamilypermonthcomestoRs.939.Thedifferencebetweenthis,andourimputedfigure,maybeattributabletothefactthatcowdungcakesandfirewoodareusedasfuel,andthatlightingisnotpurchasedfromthemarketandweimputedthecostforthese.

7.7SummaryofhousingcostsThe monthly housing cost, including the cost of utilities (Rs.1,308) and rent or rental equivalent(Rs.3,081)foralivingwageiscalculatedtobeRs.4,389permonthforafamilyoffive.

8.NON-FOODANDNON-HOUSINGCOSTS(NFNH)FollowingthemethodologyrecommendedbyRichardAnkerandMarthaAnker(AnkerandAnker,2016forthcoming),non-foodandnon-housingcostsareestimatedinthreesteps.Instep1,non-foodandnon-housing(NFNH)costsareestimatedbasedoncurrentexpenditurepatterns(usinghouseholdincomeandexpendituredatafromNSSO,2012a).Themeanshareofmonthlypercapitaexpendituresonvariouscomponents-foodandnon-food–areanalysedtoestimatetheNFNHtofoodexpenditureratio.Thisratioshouldbederivedfromtheexpenditurepatternsofthehouseholdsinthe40thpercentileoftheincomedistributionforestimatingalivingwage.AccordingtoNSSO,2012a,52.96percentofallhouseholdexpenditureinruralUPisforfood,8.57percentisforfuelandlight,0.78percentonrent(becauselargelythedwellingsareowned),2.48percentonpan,tobaccoandintoxicants,andtheremaining35.20percentisforallotherexpenditures.(RefertoTable5fortheproportionoftotalexpenditurespentonvariousitemsforanaveragehouseholdinruralUP,accordingtoNSSO,2012a.)Instep2,expendituresthatareconsideredtobeunnecessaryforadecentstandardofliving(e.g.alcohol,tobaccoandprivatemotorvehicle)areeliminated.Asmentionedabove,2.48percentoftheexpenditureonpan,tobaccoandintoxicantsareexcludedfromtheNFNHexpenditure.Afterexcludingtheunnecessaryexpenditures,theNFNHcostsamountto35.20percentandthefoodcostsamountto52.96percent.TheratioofallNFNHtofoodexpenditureisthus0.665.TheAnkers’methodologysuggestsusingdataforthehouseholdinthe40thpercentileoftheincomedistributionforruralareasofadevelopingcountryforestimatingalivingwage.Ifdatafortheregionis



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notavailablebyexpenditureclasses,theysuggestreducingtheaverageNFNHtofoodratioforallexpenditure(whereeachrupeecountsthesame)asindicatedabove.WedidnotfinddatabyincomeclassforruralUPbutwefounddatabyincomeclassforruralIndiahasawhole.ForruralIndia,theNFNHtofoodratio(aftereliminatingunnecessaryexpenditures)formeanhouseholdexpenditurewas0.649.Forthe40thpercentilehouseholdforruralIndia(takingtheaverageoftheratiosforthe4thand5th

decilesoftheincomedistribution),theratiowas0.480,or26.1percentlowerthantheratioforthemeanhouseholdexpenditure.Weusedthis26.1percentdeflatortoadjustthemeanNFNHtofoodratioforruralUPof0.665toderiveanestimateof0.491forthehouseholdinthe40thpercentileofincomedistributionforruralUP.WithafoodexpenditureofRs.5,801permonth,thenon-foodnon-housingexpenditureisRs.2,850(0.491×Rs.5,801).Instep3importantexpendituregroupssuchashealthcare,educationandanyothermajorexpensesaretakenintoaccounttoassesswhetheravailablefundsestimatedinstep2aresufficientforadecentliving;ifnot,additionalfundsareaddedtoensureavailabilityofadequatefundsforadecentliving.AccordingtoNSSO,2012a,forameanincomehousehold,theexpendituredistributionfornon-foodnon-housingcostsisshownincolumn1andsoimpliedamountsforeachitemincludedinNFNHareincolumn3:

Table5:Non-foodnon-housingexpenditure(NFNH)Item Total monthly per

capita expenditure in 2011-2012 NSS (%) (column 1)

Total NFNH in 2011-12 NSS (%) (column 2)

Amount (Rs. / month) assuming NFNH costs of Rs.2,850 (column 3)

Clothing, bedding & footwear

7 21 603

Education 4 11 316 Health 9 26 740 Recreation 1 1 42 Household consumables

4 11 316

Household durables

2 5 137

Conveyance 5 14 385 Consumer services

4 11 311

Total 35.20% 100% Rs.2,850 Step 3 examines specifically whether funds allocated for health care and education are sufficient, astheseareconsideredtobepartofcitizenrights.



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Basedon the following in-depthexaminationofhealth care, educationandhousehold furnishings andequipment,thefundsfornon-foodandnon-housingneeds,havebeenincreased,asexplainedbelow.

9.POSTCHECKSOFNON-FOODANDNON-HOUSINGCOSTS

9.1HealthcarepostcheckAccording to theHuman Development Report 2015, about 1.5 billion people are afflicted withmulti-dimensional poverty, namely suffering from overlapping deprivations in education, health and livingstandards.A further 800million are at thebrinkof fallingback intopoverty.Nearly 80percentof theglobal population lacks comprehensive social protection. About half of all workers — more than 1.5billion—workin"informalorprecarious"employment.India,whichranks130among188countries,has55.3percentof thepopulation(631,999,000people)multi-dimensionallypoorwhileanadditional18.2percent(208,588,000people)livenearmulti-dimensionalpoverty.

India in general has many health care challenges, including shortage of skilled health care staff andinadequatefacilitiesandfundingforhealthcare.RuralIndiahasahighchildmortalityrateof56formaleand66forfemalechildrenundertheageoffive,withastillhigherrateof69and85respectivelyinruralUP (Census of India, 2011). The total per capita health expenditure (private and public together),includingtheprovisionforpreventiveandcurativecare in India in2013wasa lowUSD61(WHO).Notonly is the public health system in India under huge stress, but the quality of health care is far fromsatisfactory.Therespondentswemetduringourfieldinvestigationexpressedtheviewthatpublichealthcare in ruralBhadohiwaspoorandunsatisfactory.Doctorsandmedicineswere rarelyavailableat thepublic clinics. As a result, people had no choice but to visit unauthorised clinics set up by unqualifiedmedicalpractitioners.Ononeoccasionasweapproachedalocalclinic,thepatientswerechasedawaybythe doctor, as he suspected of us being an inspection team.While public (government) healthcare inruralIndia(ruralUP)ismeanttobefree,thefacilitiesarepoororinaccessible.Mostpeoplewespoketoresortedtoprivatehealthcarefacilities.Accordingto localexperts,respiratory illness isreportedlyverycommonamongcarpetweavers,duetothedustthatisgeneratedintheprocessofweaving.

The preliminary estimate of funds for health care estimated as part of NFNH costs at step 2 wasapproximatelyRs.740perfamilypermonth.Toensurethatthisamountwassufficientforhealthcare,weaskedtherespondentsduringthefieldstudyinruralBhadohiaboutthenumberoftimestheyfellillandhadtovisitprivateclinicsandpharmacies,andthecostofmedicinesandprivateconsultancy.Asalmostallthepeoplewespoketoreportedthatonaverageapersonfellillthreetofourtimesinayearandhadtovisittheprivateclinictogetmedicines,itisnecessaryforadecentlivingtoprovidefundsforfamiliestobeabletouseprivateclinicsandpharmaciesmostofthetime.

Weenquiredabouttheestimatedexpenditureonhealthdirectlyfromworkers.AfamilyoffiveinruralBhadohivisitedthedoctorandclinicthreetofourtimesayeartotakecareofroutineillness,especiallyduringseasonalchanges.Fromtheinformationcollectedfromlocalpeopleandprivatedoctors inruralBhadohi,itisestimatedthatconsultationsinprivateclinicscostRs.50-100pervisit,Rs.300-500fortests,andRs.100-400formedicineeachtimeforroutineailments.Inotherwords,eachepisodeofillnesscostsapproximately Rs.450 – 1,000. Assuming that people fall ill three times in a year, of which twice is aroutine illness,whereexpenditure is limitedtoconsultation feeandmedicines,andonce, the illness ismoreserious,wheretestsmayhavetobeconducted,theannualexpenditureonhealthcarecomesouttobeintherangeofRs.3,750toRs.10,000.ThisgivesusanaverageofRs.572permonth.Thishowever



28

excludes, extremely serious illness requiring hospitalisation. If one assumes that illnesses requiringhospitalisation occur once in 18 years and costs on average Rs.10,0009 per case thisworks out to beRs.231permonth fora familyof five,whichwouldmake totalhealth careexpendituresofRs.803permonth for a reference family. This is not very different from the total amount for health careexpendituresofRs.740includedinthepreliminaryNFNHestimate.Hencenofurtheradjustmentismade.

Table 6: Expenditure on health care excluding hospitalisation costs Medicalneeds Minimum Maximum

Consultation Rs.50 Rs.100 Lab tests Rs.300 Rs.500 Medicines Rs.100 Rs.400 No of family members 5 5 Routine illness (incidence) 2 2 Serious illness requiring lab test (incidence) 1 1

Annual cost Rs.3,750 Rs.10,000 Per month Rs.313 Rs.833 Average cost Rs.573

9.2EducationpostcheckTheIndianeducationsystemisdividedintoprimary,secondaryandtertiarylevels.Theschooleducationconsistsofeightyearsofprimaryschool,beginningattheageofsix;fouryearsofsecondaryschoolandtwo years of senior secondary school. Tertiary level (degree) education takes place atcolleges/universities.Arighttoeducationiseverychild’srightinIndiaandparentsarerequiredtosendtheir children to school.Education forallhasbeenmadeauniversal right since theNationalPolicyonEducation (NPE), 1986/1992, and has been seen to contribute to national cohesion, developingindependenceofmindandspirit,fosteringthegoalsofsocialism,secularismanddemocracyenshrinedintheConstitutionofIndia.ThiswasfurtherbolsteredwhenArticle21-AandtheRightofChildrentoFreeandCompulsoryEducation(RTE)Act2009becameoperativeon1April2010.

EducationinIndiaisprovidedbythepublicsectoraswellastheprivatesector,withcontrolandfundingcomingfromthecentralgovernment,thestategovernmentandlocalauthorities.

Despitefreeeducationandmiddaymealsprovidedbythegovernmentschools,duetothepoorqualityof facilitiesandanabsenceof trainedandmotivatedteachers inpublicschools, increasingnumbersofparents, including those in ruralareas,enroll their children inprivateschools. In fact, theshareof theprivatesectoratallthreelevelsofeducation,includingtheprimarylevel,hassteadilygrownduringtherecent years. A study by Ernst & Young (2014), shows that of 253 million students, enrolled inkindergarten to class 12, private schools account for 40 percent (around 100 million) of student

9 Hospitalisation of once in 18 years is consistent with findings of the 71st round of the National Sample Survey (2014) for rural UP. Average cost per hospitalisation. The average cost of hospitalisation in rural UP was Rs.18,693 in the NSS but this includes private and public hospitals.



29

enrolment.TheAnnualStatusofEducationReport,2014,byPratham,foundthat51.7percentofchildreninUPhavebeenenrolledinprivateschoolscomparedto49percentin2013.WefoundduringourfieldvisitthatthesituationisnodifferentinruralBhadohiaswell.

Theresearchteamvisitedbothpublicandprivateschoolsinthesamelocalityandfoundthattheprivateschoolsweremuchbettersubscribedbythelocalpeople,withclassroomsfulltocapacity,managedbyteachers with a level of seriousness. In contrast the students at government schools were absentingthemselvesandteacherswerenotpayingasmuchseriousattentiontothestudentsandtheir learning.Even the freemid daymeal scheme, which is offered by the government schools, does not seem toattractstudentstotheclassroom.AsreportedbyPratham’sAnnualStateofEducationReportmoreandmorestudentsaregoingtoprivateschoolsinruralIndia.Aheadmasterofalocalgovernmentschoolalsoadmittedthatthemiddaymeallackedquality.

Given this scenario, we have assumed that for decency and effective use of the right to education,attendanceinprivateschoolisrequiredinruralUttarPradesh.

The respondentswemet in 15 different locations in rural Bhadohi reported annual expenses rangingfromRs.1,425 to Rs.4,400 (1,425, 1,450, 1,500, 1,625, 1,750, 1,820, 1,930, 2,100, 2,240, 2,300, 2,350,2,400,2,495,3,500,4,400)incurredforachildintheprimaryschool(classes1-8)inaprivateschool.Thisamountincludedregistrationfee,examinationfee,tuitionfee,costofuniform,booksandotherlearningmaterial. Similarly, the annual cost reported by our respondents for educating a child in the lowersecondaryclasses(from9th&10th)inaprivateschoolrangedfromRs.1,810toRs.3,520;andtheannualcost for educating the child in the senior/upper secondary (private) school varied from Rs.2,275 toRs.6,210.Asisevident,privateschoolexpensesareprogressivelyhigherinhigherclasses,fromprimarytolowersecondarytohighersecondary.

Based on the annual cost of education at different levels, discussed in the preceding paragraph, theaverage annual cost for educating three children in a family is computed. For each child, the amountspentoneducationisRs.2,240peryearforeightyearsofprimaryeducation,Rs.2,550peryearfortwoyearsofsecondaryeducationandRs.4,347.5peryearfortwoyearsofhighersecondaryeducation.Thesearethemedianannualcostsfromtherangegivenabove.Thus,theamountspentperchildisRs.3,1715overhis/her18yearsofchildhood.ThisgivesanaverageannualcostofRs.1,762perchild,orRs.147perchild per month. The monthly expenditure incurred on education by a family with three children is,therefore,Rs.440permonth.This isRs.134morethantheRs.316,whichwasincludedforeducationinour preliminary unadjusted estimate of NFNH costs. Therefore, we added approximately Rs.100 permonthtoNFNHexpenses toensure thatsufficient fundsareavailable toworkers tocovereducationalexpensesatprivateschoolsfortheirchildren.

9.3ConsumerdurablespostcheckAccordingtoCensus2011,25percentofruralhouseholdsinUPownaradio,72percentabicycle,and24percent a television. These consumer durables, along with basic furnishings may reasonably beconsidered to be required for a decent living. It is therefore expected thatworkers should be able toaffordtheseitemsonalivingwage.Thecostoftheseitemsinthemarkethasbeencalculatedtoincludeit in terms of monthly cost, using assumptions on how long these items last. These are given in thefollowingtable:



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Table 7: Expenditure on consumer durables Item Number Total cost

(Rs.) Life expectancy

Annual cost (Rs.)

Chairs 5 2,000 20 100 Bed (Double) 2 10,000 20 500

Mattress 4 2,400 20 120 Bicycle 1 2,000 20 100 Radio 1 800 20 40 Television 1 15,000 20 750 Total annual

cost 1,610

Total monthly cost

Rs.134

Wehave already includedan amountof Rs.313permonthper family for durable goods including theones listed in the above table plus other electronic items, furniture and fixtures; hence, no furtheradjustmentismade.

9.4TransportationpostcheckAn expenditure of Rs.170 per month on conveyance has already been included, and no furtheradjustmentismadetothissincemarkets,healthcarefacilities,schoolsetc.areaccessiblewithinwalkingorcyclingdistance.

10.PROVISIONFORUNEXPECTEDEVENTSTOENSURESUSTAINABILITY

Asoftenhappens,unforeseeneventslikeillnesses,accidentsanddeathscanincurhugeexpenses,whichcanthrowworkerswhobarelymanagetosubsistintopovertyanddebtfromwhichtheymaynotbeabletorecover.Plannedandinevitableevents,suchasmarryingadaughter,cancreateseriousfinancialcrisisinthelivesofworkers.Therefore,itisimportanttoaddasmallmargin(toallowforsavings)inordertoestimatealivingwagethatallowsforunexpectedevents.Thusamarginof5percenthasbeenaddedtoallowforunforeseenemergenciesandsomediscretionaryspending.



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SECTIONIILivingWageforWorkers

11.FAMILYSIZENEEDINGTOBESUPPORTEDBYLIVINGWAGELivingwage isa familyconcept (Anker2011,2016).Therefore, it isnecessarytodecideanappropriatefamilysizeforalivingwageforruralUP.Afamilysizeoffivepeople(twoadultsandthreechildren)hasbeenusedtoestimatethelivingwageforruralUP.Thisfamilysizeisaconservativeassumptionthatisconsistentwith:(i)numberofchildrenruralwomentypicallyhaveand(ii)averagehouseholdsizeinruralareas.

The average household size in rural Uttar Pradesh is six, and when single person households areexcluded,itbecomes6.24(Census2011).Moreover,ifverylargehouseholds(10+members),thatwouldusuallyincludetwoormoreearners,arealsoexcluded,theaveragehouseholdsizeis5.8.

Sincefamilysizeandhouseholdsizecannotbeusedinterchangeably,thetypicalfamilysizecanalsobeestimated by adding two adults and the number of children women usually have based on adjustedfertilityrates.AccordingtotheCensus,2011,thetotalfertilityrateforruralUttarPradeshis3.4,whichwhenadjustedforthechildmortalityrateof72per1000(Census2011)amountsto3.1552.Thisimpliesareferencefamilysizeof5.2(2adults+3.2children).Wedecidedtouseareferencefamilysizeoffivetobesomewhatconservativeasit isconsistentwithfertilityratesandthenumberofchildrenwomenarehavinginruralUP.

12.NUMBEROFFULL-TIMEWORKERSINFAMILYPROVIDINGSUPPORT

Asalivingwageisafamilyconcept,itisnotunreasonabletoexpectmorethanoneadultinafamilytoprovide support throughpaidwork in typical families that include two adults. It is usually assumed inother methodologies that either both the spouses/partners work full-time or that only onespouse/partner works full-time. The assumption of one full-time worker is based on the malebreadwinner model of the household that was the accepted norm till some years ago in Westerncountries,aswellasinsomepartsoftheworldtoday.Theassumptionoftwofull-timeworkersisbasedonthe ideathatalladultswork full-timeyearround.Neitherassumptionmayberealistic forruralUP.Therealityisthatmanyadultsarenotabletofindworkduringthewholeyear,particularlyinnon-peakseasons.Thesituationhasbecomemoreacuteas landholdinginrural India, includingUP,hasbecomesmallerand/ormanymaynothaveaccessto/possessionofanyland.

Todeterminethenumberoffull-timeequivalentworkersperfamily,thedataavailableon(i)ageandsexspecificlabourforceparticipationrates(LFPR),(ii)unemploymentrates(UR),and(iii)typicalnumberofhoursofworkhasbeenused.Theaverageproportionoffull-timeworkperadulthasbeendeterminedbyadjustingtheaverageadultlabourforceparticipationratebytheunemploymentrateandthepart-timeemploymentrate.

Weusethefollowingformulaetodeterminethenumberoffull-timeequivalentworkersperfamily.

Proportionoffull-timeequivalentworkersperfamily=1+LFPR×(1-UR)×(CurrentDailyActivityRate÷UsualActivityRate)×(1-Part-timeemploymentrate/2)withLFPR=usualactivityrate×partoftheyearwork.Thesecondexpression intheaboveformulae iscalculatedseparatelyformalesandfemalesand



32

thenanaverage is taken.Thedataonusualactivity rate,URandcurrentactivity rateareavailable forruralUPfortheprimeworkingagegroup25-59andaretakenfromNSSO(2012b).Weuseapart-timeemployment rateof40percent forwomen,basedon timeusedata (Anker,Khan&Gupta,1987)andassumeapart-timeemploymentrateof5percentformen,giventhatthisisknowntobelow.

Table8:Calculatingworkersperfamily LFPR

(usual activity rate)

Unemployment rate(UR)

Current daily activity rate

Part of the year work(current daily activity rate ÷ usual activity rate × 52/50)10

Part-time work when working

Number of full- time workers

Male 98.0% 0.6% 91.7% 97.3% 5.0% 0.924

Female 35.1% 0.2% 20.3% 60.1% 40.0% 0.168

Total Average 0.546

1 + average number of full-time equivalent workers

1.546

Basedontheabovecalculations,weconsider1.546full-time(equivalent)workersperfamilybecauseweassumethatoneperson(weaver)isworkingfull-time.

13.MANDATORYDEDUCTIONSFROMPAYANDCASHALLOWANCES

UndertheIndianIncomeTaxAct,everypersonresponsibleforpayinganyincome,whichischargeableunderthehead'salary',isexpectedtodeductincometax(TDS)ontheestimatedincomeoftheperson.Thedeductionistobemadeatthetimeoftheactualpayment.However,notaxisdeductedunlesstheestimated salary incomeexceeds themaximumamountnot chargeable to taxapplicable in caseofan

10 This calculated ratio should be adjusted somewhat to allow for some sick leave and vacation time. Hence, it is multiplied by 52/50 to allow for two weeks of vacation & sickness.



33

individual during the relevant financial year. The income tax in India for the assessment year 2015-16suggest an exemption limit of Rs.250,000 for individuals less than 60 years of age, Rs.300,000 forindividuals between60-80 years of age andRs.500,000 for citizensof 80 years age and above.At ourestimatesoflivingwage,theseworkersareexemptedfrompayingincometax,andhence,notaxhastobepaidbythem.

Further,therearenocashallowancesgiventotheworkers.

AstatutorypayrolldeductionistheProvidentFund,i.e.thecontributionsmadebytheemployeeduringthetimehe/sheworkedalongwithanequalcontributionbyhisemployer.Calculatedat12percentofhis/herbasicsalaryandasimilaramountiscontributedbytheemployer.Howeveremployeeshavetheoption to contributemore than12percent. Employeesdrawingabasic salaryRs.15,000permonthormorearerequiredtocontributetotheprovidentfund.Sincetheworkersinourstudyarepaidonapiecerate,andmostofthemarecontractual,theydonotcontributetoaProvidentFund.

Sincetherearenostatutorydeductions,thelivingwagegrosspayneededequalsthedisposableincomeneededfordecentliving.

14.IN-KINDBENEFITS

In-kind benefits received from employers can reduce the amount of cash income that workers require to ensure they receive a living wage. Under different labour laws such as Employment Compensation Act, Provident Fund Act, Gratuity Act, Maternity Benefit Act, Employee State Insurance Act, several kinds of social security and health benefits are available to employees working in establishments employing 10 or more workers. However, we found that most of the weavers in our study work in small units where in-kind benefits are limited or non-existent. This is largely because these weavers worked for subcontractors who engaged small number of weavers and their operations were not registered as legal establishments.

In some of the bigger factories employing larger number of workers, they are given subsidised meals and minimal health care facilities. These are also bigger factories, which followed labour legislations protecting minimum wages and other benefits for the workers.



34

SECTIONIIIMinimumWagesandGapstoaLivingWage

15. COMPARING OUR LIVINGWAGE ESTIMATES TOMINIMUMWAGES ANDPREVAILINGWAGES:WAGELADDER Our estimate of livingwage is Rs.8,929 permonth perworker based on living costs of Rs.13,803 permonth for a family of five. If we refer to the data disseminated by the National Sample SurveyOrganisation for 2011-12, the average monthly per capita expenditure for Rural Uttar Pradesh wasRs.1,156,whichequalsRs.5,780permonthforafamilyoffiveandRs.6,759consideringthattherehasbeen17%inflationsince2011-2012.However,it isimportanttoqualifyherethatNSSestimatesdonotconsiderthecostorvalueofowneroccupiedhousing,andhence,areanunderestimate.Nevertheless,our estimate is significantly higher than that of current average household expenditure in rural UttarPradesh.However,ifwelookatsomebetter-developedstatesofthecountrysuchasPunjabandKerala,theaveragemonthlypercapitaexpenditurein2011-2012wasRs.2,345(inruralPunjab)andRs.2,669(inruralKerala).ThisequalsamonthlyexpenditureofRs.11,725andRs.13,345forafamilyoffiveinPunjaband Kerala, respectively (which would be equal to Rs.13,718 and Rs.15,614 in Punjab and Kerala ifupdated for the 17% inflation since this survey). Thus our estimate of expenditure for a family tomaintain a decent standard of living is similar to current expenditure in Punjab, and less than theexpenditureestimatesofKerala.

15.1MinimumwagesThereisaplethoraoflabourlawscoveringemployment,industrialrelationsandsocialsecurityoflabourin India, including theminimumwages. Theminimummonthlywages, including dearness allowance,prescribedbytheMinimumWagesActforunskilledworkersintheweavingindustryisRs.6,814.81,forsemi-skilled Rs.7,085 and for skilled workers Rs.8,397.04. The minimum wage applies to all forms ofemployment inanyactivities coveredunder theMinimumWagesAct,whetherpermanent temporary,casual or hourly, and cannot be reduced by the value of in-kind benefits as partial payment of theminimumwage.Theminimumwagesactappliestoanycarpetmakingorshawlweavingestablishments.Asisevident,theprescribedminimumwageisinadequatetosupportafamilyoffive.

Thecarpetweaversareconsidered tobesemi-skilled.However,mostof themwork fromhomeor forsubcontractorswhoemploysmallnumbers(7-9)ofweavers.Thesubcontractorsortheiroperationsarenotregisteredaslegalestablishmentsandremainintheunorganisedsector.Henceamajorproportionofcarpetweavers, (except thosewhomaybeworking in the few large factories),whoareengagedbytheunregisteredsubcontractors,arenotprotectedbylabourlawsbecausemanyofthelabourlawsareonlyapplicabletoestablishmentswith10ormoreemployeesandarealsoregisteredunits.

15.2PrevailingwagesandbenefitsofweaversTheaveragedailywageinmanufacturinginruralIndiaisRs.256.82.Assumingaworkerworks24daysinamonth,thisequalsRs.6,163.8.Ifweadjustthisforinflation,theaveragemanufacturingwagesforruralIndiaareRs.7,209permonth(NSSO,2012b).



35

Althoughthereisabasicminimumwageprescribedbythestatefortheworkerswithdifferentskilllevelsengaged in the weaving industry, most of the workers covered in our study do not seem to get thebenefitssuchasaprovidentfund,ESI(EmployeeStateInsurance)etc.whichareavailableunderthelaw,primarily because theweaverswork for contractorswho have not registered their establishment andhenceremainedoutsidethereachoflabourlaws,althoughsuchcontractorsarenotexemptedfromtheregulationsprescribedbythelaws.

15.3PiecerateanddailywagerateIngeneralthecarpetweavinginBhadohiisbasedonpieceworkforwhichworkersarepaidonthebasisofthesizeofthecarpettheyweave.Inaddition,pieceratewagesalsovarydependingonthequalityofthecarpetwoven.Infact,thequalityofthecarpetvariesdependingontheprocessofmakingit(tuftedorknotted),thenumberofknots,andthequalityofthreadsused.

Hand-tuftedcarpetsusehighqualitywoolsothe finishedproduct looksmuch likeahand-knottedrug.However,unlikeahand-knottedrug,ahand-tuftedrug iscreatedwithouttyingknots.Thesearemadewithatoolcalleda"tuftinggun."Loopsofwoolarepushedthroughabackingthathasbeenimprintedwiththeoveralldesign.Hand-tuftedrugscanwithstandhightrafficareas includingentrances,hallwaysandfamilyrooms.Weavingahand-knottedrugrequiresagreatdealofskillandtakestimetoproduce.The number of knots per square inch determines the quality and the cost of a hand-knotted carpet.Makingahand-tuftedarearugtakesmuchlesstimetomake,comparedtohand-knottedcarpet,therebyreducing the cost. Amajor proportionofweavers in Bhadohi areawho areworking in establishmentsauditedbyGoodWeave,areengagedinhand-tuftedcarpetweaving.

Fromour conversationwith severalworkersduring the fieldvisit itwas clear that the typical rangeofwages paid to the workers varied depending on the variety and quality of carpetsmade. Those whoworkedonknottedandhandloomvarietyofcarpetsareconsideredbetterskilled.Informationonwagesfor carpetweaverswas collected by auditorswho investigated thewages of 97 carpetweavers in 30differentestablishments(seeTable9),undertakenbyGoodWeavein2015.

Table9:Dailywagesofcarpetweaversin30selectedestablishmentsauditedbyGoodWeaveTypeofcarpet

Number Minimumdaily wage(Rs.)

Maximumdaily wage(Rs.)

Median dailywage(Rs.)

Mean dailywage(Rs.)

Percentearningbelowminimumwage

Knotted 9 120 240 196 190 100%

Tufted 72 97 503 228 227 63%

Other 16 133 303 200 206 94%

The GoodWeave inspectors collected the information provided in Table 9 above during the period ofJanuary5andApril22,2015.Almostallofthe97workersinterviewedworkedinsubcontractorfacilities(28of30facilities).Roughlyhalfoftheworksiteswereinrurallocationsandtheotherhalfwereinsemi-urban locations. Exporters who subcontracted the work were situated in Bhadohi (13), Panipat (7),Mirzapur (3) and the rest in Meerut, Sitapur and Karnal. Wages were calculated on an eight-hour



36

workdaybasis.Forexampleifsomebodyworked12hourseveryday,thenhisorherearningsforthedaywascalculatedforeighthours(i.e.earningstimes8/12).Piece-ratewascalculatedonthebasisofareaofcarpetwovenforeighthoursperday,sixdaysperweek,52weeksperyear11.Inmostcasesinthecarpetindustryweavingchargesarecalculatedonthebasisofareaofcarpetwovenmultipliedbyearningspersquarefootorsquareyard.

Aswegatheredfromthefewweaversandsubcontractorswemetduringthefieldvisit,andasevidentfrom the survey conductedbyGoodWeave, the amount earnedby theworkers ismuch less than theminimumwagesprescribedunder the law (MinimumWagesAct) forweavers,andmuch less than thelivingwageweestimated.Manyoftheworkersworkovertime(e.g.12–14hoursaday),butmostoftheloomsareshutononedayoftheweek,sothenumberofdaysworkedisabout24inamonth,atleastduringthepeakseason.Thereare,however,seasonalvariations,asexplainedbelow.

15.4SeasonalvariabilityinnumberofdaysworkedperweekAsagaingathered fromthe interviewswithweaversandsubcontractors, itwas foundthat thework isseasonal,dependingontheexportdemand/order,whichpeaksinthemonthsofDecembertoMay.Themigrant workers who came from Bengal, Orissa and Jharkhandmet the demand of the peak season.Duringthepeakperiod,i.e.thesixmonthsfromDecembertoMay,theworkersworkeighthoursaday(ormore),andduringtheleanseason,theworkersworkfornotmorethanfour-sixhoursinaday.

15.5BonusandovertimepayAsmentionedearlier,carpetweaving inBhadohi (RuralUP), iscarriedout largelybyweavers,whoareengagedbysubcontractors.Thesubcontractorssetupafewloomswheretheweaversworkonapieceratesystem,someofwhicharehomebasedaswell.Suchestablishmentsarenotregisteredanddonotcomeunderthelabourlegislativeframework.SomeweaversaremigrantswhocomefromotherpartsoftheUPandotherneighbouringstates.Thesubcontractorsmayinsuchcasesprovidethemigrantworkersthespacetostay,whichisoftenthemakeshiftarrangementofsleepingonthefloorwheretheywork.

There are also a few factories, which are owned and operated by the carpet exporters themselves,employing larger number of workers. Such factories are registered under the Factories Act, and theworkersarereportedlybetterpaid(atleasttheprescribedminimumwages).Duringourvisitstoacoupleof such factories, we were told that workers are given small benefits like subsidised meals, partialmedicalbenefitsandgiftsandbonusesaround important festivals suchasDiwali.Theworkers in suchfactoriesarealsolikelytobepaidovertimeforworkingextrahoursbeyondthestipulated48hoursperweek as these are legally registered establishments, which are periodically visited by the inspectiondepartmentsofthegovernment.

15.6DifferencesbetweensizesofproductionunitsthataffectincomeofworkersWeavers who are working in larger establishments may earn more than those who work forsubcontractors insmallerestablishmentsorhome-basedontheirown.However,thecurrentstudyhas

11 Our study is for a 50 week working year as a minimum of two weeks will be deducted for vacation.



37

focusedontheworkerswhoareengagedbythecontractorswhoworkinsmallerestablishments,asthisisthemostpopularmodeofcarpetweavingfoundinthisregion.

16.WAGELADDER

Thewageladderillustrateshowthelivingwagecomparestootherwagesandeconomicbenchmarks.Wehavealreadydiscussedtheminimumwages inthesectorandtheprevailingwages intheindustry.Theprevailingwage(median)permonthisbasedontheassumptionthatworkersworkforsixdaysaweekand50weeksayear(aminimumoftwoweeksisdeductedforvacation).

OurlivingwageismuchlowerthantheAsiaFloorWageforIndia(seeTable10).

Table10:Wageladder(Rs.permonth)

16.1WorldBankPovertyLineWageWeestimatethewagesbasedontheWorldBankPovertyLineof$3.1aday(PPP)andextremepovertylinesof$1.9aday(PPP).Thepovertylineinrupeeterms(usingtheimpliedPPPconversionrateofRs./USD)12forafamilyoffivepermonthisRs.8,192(i.e.,$3.1×17.375×5×30.42)andRs.5,021(i.e.,$1.90×17.375×5×30.42).Thepovertylinewagecanbeobtainedbydividingthesefiguresby1.546,i.e.thenumberofworkersperfamily.ThisgivesusRs.5,299permonth(for$3.1povertyline)andRs.3,248permonth(for$1.90extremepovertyline).

12 This is calculated as the average of the implied PPP conversion rates of Rs.17.11/USD for 2015 and Rs.17.64 / USD for the year 2016 from Quandl (Source: https://www.quandl.com/data/ODA/IND_PPPEX-India-Implied-PPP-Conversion-Rate-LCU-per-USD).

2815 32484900 5299 5700 7085 7209

8929

18727

RuralU

PPo

verty

Line

Wage

WorldBank

Extrem

ePo

verty

Line

Wage

PrevailingWages

(Med

ian-

Know

ed)

WorldBank

PovertyLine

Wage

PrevailingWages

(Med

ian-T

uxed

)

Minim

umW

age

(Sem

i-skilled)

AverageM

anufact

uringWage(Rural

India)

LivingW

age

AsiaFloorW

age

WageLadder(Rs./Month)



38

16.2NationalPovertyLineWageTheAllIndia(Rural)PovertyLinefor2011-12isRs.816perpersonpermonth,whichequalsRs.4,080forafamilyoffive.ThepovertylineforruralUttarPradeshisRs.768,whichequalsRs.3,840forafamilyoffive.Dividingthisbythenumberoffull-timeequivalentworkersperfamilygivesustheNationalPovertyLinewageswhichequalRs.2,557(atAllIndiaRuralPovertyLine)andRs.2,407(atUttarPradeshRuralPovertyLine).Ifweadjustthesewagesforinflationbetween2012and2016,therevisedwagesareRs.2,990(atAllIndiaRuralPovertyLine)andRs.2,815(atUttarPradeshRuralPovertyLine).

17.SUMMARYCALCULATIONSFORLIVINGWAGEANDCONCLUSIONSThelivingwagethatwehaveestimatedforruralUttarPradeshisRs.8,929($133)permonth.Asworkersin the carpet belt of rural UP (Bhadohi) are mostly engaged on a piece rate basis with no otherallowancesor in-kindpaymentRs.8,929 istheamounttheyneedtoearnfor leadingadecent life, (seeTable11andTable12).

ThisamountishigherthantheminimumwageofRs.7,085-theamountmandatedbythestateforsemi-skilledworkers.ItisalsohigherthantheamountmandatedfortheskilledworkersofUP,Rs.8,397.Basedonassessmentofthesecondarydataaswellastheprimarydatacollectedfromthefield,wefeelthattheproposedlivingwageisnecessaryforaworkerandhisfamilytoleadadecentlife.

Theproposedlivingwagewillenableaworkerandhisorherfamilyoffivememberstohavenutritional,but inexpensivemeals, to take careof routinehealth careproblems, tomaintainadecenthousewithminimumamenities,toeducatehis/herchildrenandtobeabletomeetlife’sunexpecteddemands.

Table11-SummarytableforcalculatingalivingwageItem Local currency

(Rs.)USD

PARTI:FAMILYEXPENSES

Foodcostpermonthforreferencefamily(1) 5,801 87

Foodcostperpersonperday 38.14 0.57

Housingcostspermonth(2) 4,389 66

Rentpermonthforacceptablehousing 3,081 46

Utilitiesandminorrepairspermonth 1,308 20

Non-food/non-housing costs per month taking intoconsiderationpostchecks(3)

2,956 44

PreliminaryestimateofNFNHcosts 2,850 43



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Healthcarepostcheckadjustment 0 0

Educationpostcheckadjustment 106 1.6

Otherpostcheckadjustments 0 0

Additional 5 per cent (approx) for sustainability andcontingencies(4)

657 10

Totalhouseholdcostspermonthforbasicbutdecentlivingstandardforreferencefamily(5)[5=1+2+3+4]

13,803 206

PARTII:LIVINGWAGEPERMONTH

Living wage per month, net take home pay (6)[6=5/#workers]

8,929 133

Mandatorydeductionsfrompay(7) 0 0

Grosswagerequiredpermonthforlivingwage(8)[8=6+7] 8,929 133

PART III: LIVING WAGE BASIC WAGE IN INDUSTRYCONSIDERINGVALUEOF TYPICAL IN-KINDBENEFITS, CASHALLOWANCES&BONUSESININDUSTRY

Typical value per month of usual in-kind benefits inindustry(9A)

0 0

Typicalvaluepermonthofcommoncashallowancesandbonusesinindustry(9B)

0 0

Netbasic livingwagewhenworkers receive typical in-kindbenefits, cash allowances and bonuses in industry (10)[10=6-9A-9B]

8,929 133

Grossbasiclivingwagewhenworkersreceivetypicalin-kindbenefits, cash allowances and bonuses in industry (11)[11=8-9A-9B]

8,929 133

Source:TheauthorsTable12:KeyvaluesandassumptionsforalivingwageestimateExchangerateoflocalcurrencytoUSD INR67=US$1

Numberoffull-timeworkdayspermonth 24

Numberofhoursinnormalworkweek 48

Numberofworkerspercouple 1.546



40

Referencefamilysize 5

Numberofchildreninreferencefamily 3

RatioofNFNHcoststofoodcosts 0.491

Source:Theauthors



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AbouttheAuthors

Professor Kuriakose Mamkoottam did his Master’s and Doctoral degrees in sociology and specialised in the area of Human Resource Management and Industrial Relations. Dr Nidhi Kaicker is a graduate in Economics and has her Post Graduate and Doctoral degrees in Management with specialisation in Economics and Finance.

living wage report bhadohi, uttar pradesh, india

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