The surging economy has turned the tide for Indian households – the number of high-income households exceeded that of low-income by the end of 2009-10, according to a study conducted by the Centre for Macro Consumer Research (CMCR), a division of the National Council of Applied Economic Research’s (NCAER). The study report titled ‘How India Earns Spends and Saves’ is based on a survey of 4.4 lakh households across 24 states carried out by the National Survey of Household Income and Expenditure (NSHIE) in 2004- 05.

The report pegs the number of low-income households (less than Rs 40,000 annual income) at 41 million, while that of the high-income (more than Rs 1.8 lakh annual income) at 46.7 million. The rest, earning between Rs 40,000 and Rs 1.8 lakh, comes under the middle-income category, numbering 140.7 million.

This means that 62% of Indian households come under the middle-income group. The influence of the middle-class was highlighted by the report when it pointed out, “Their growing clout becomes even more apparent when one looks at the ownership patterns of households goods. Nearly 49 per cent of all cars are owned by the middle class, compared to just 7 per cent by the rich.” The Indian middle-classes are the proud owners of 53% of air-conditioners and 46% credit cards sold in the country.

“The wheel of fortune continues to spin in India, with each level of household income set to move a notch higher by the end of the decade,” the report observes on the rising incomes.

Another fact revealed by the study report is that the country’s young workforce is the driving force behind the surging economy as well as the changes witnessed in the income patterns. This sizeable (25%) wage-earning population from the age group of 26 to 35 years forms the chief earners in 68% households and accounts for 61% of income earned in the country.

Education sector received a 25 percent increase in funds in this year’s Union Budget. Government allocated around Rs.45, 711 crore this fiscal (2010-2011) compared to last year allocation of Rs.36, 400 crore. This is to implement the Right to Education Act which aims to make primary education accessible to all children across the country. Right to Education Act is expected to be implanted in April 2010.

The allocation for elementary education is increased from Rs.26, 800 crore last year to Rs.34, 711 crore this year. For higher education, compared to last year’s Rs.9, 600 crore this year the allocation is around Rs.11, 000 crore. According to Finance Minister Pranab Mukherjee, UPA government is committed to implement the Right of Children to Free and Compulsory Education Act, 2009. According to this Act, all children in the age group of 6 to 14 years are legally entitled to good quality education, based on principles of equity and non-discrimination.

Literacy plays an important role to develop any country or society. Literacy can lead to health awareness and empower people to participate in the cultural and economic well being of the country. Though literacy has improved considerably after Independence, it still lags behind compared to other countries. National Sample Survey Organization (NSSO) estimates that India is growing at a slower rate of 1.5 percent per year in Literacy. The good news is that the rate of literacy in rural areas is increasing. As compared to 2004-05, the literacy rate increased by two percent for the rural population and one percent in urban areas during 2005-06. India’s average literacy rate is pegged at 65.38 percent. The male literacy rate is 75.96 percent and female literacy rate is 54.28 percent.

Literacy varies considerably across gender, across regions and across social groups. Scheduled Castes and Scheduled tribes have lower rates of literacy, and rates of female literacy within these groups are even lower. Regional variations are still very wide, with states like Kerala (90.92) approaching universal literacy, while states like Bihar (47.53) are lagging far behind. Government has taken initiatives to increase literacy rates by launching different programs. One of the initiatives is Sarva Siksha Abhiyan, which was launched in 2001 to ensure that all children in the age group 6–14 years attend school and complete eight years of schooling by 2010. The National Literacy Mission launched in 1988 imparts functional literacy to non-literates in the age group of 15–35 years. With all these efforts India is one of the countries where the literacy levels are still below the threshold level of 75 percent. Unless various challenges in the existing education system are addressed its difficult to increase the literacy rate in India.