The poorest people own the most housing. Strange.

An economic survey conducted this year looked at income and living standards of Indian society. The survey included 61,000 households which were divided into 5 equal segments. It found that the richest 20% earned 45% of income while the poorest 20% earned just 7%. The richest 20% spent Rs 15,882 per person per month while the poorest 20% spent Rs 6,980 per person per month. Thus, the poorest 20% is earning considerably higher than Rs 47 per person per day, less than Rs 1,500 per month, which has been fixed as the level of poverty in urban India. The biggest surprise from the survey is that 97% of the bottom 20% own their homes. Of the total population surveyed 89% of households live in their own homes. It is the relatively well off who live in rented accommodation. Anecdotal evidence suggests that almost everyone lives in own home in rural areas while most rented accommodation is in metro cities. But here there is an enormous difference in standards. Officers who have transferable jobs, as in banks, live in decent apartments because their rents are paid by their employers, while migrant labor lives in wretched conditions in slums or tiny rooms with shared bathrooms. Migration to cities is lower in India than China, Indonesia and Nigeria but even so, 5% of 1.3 billion people is a huge number. This probably explains how Indians are managing to survive on low incomes, with 19.8% of people earning less than $2 per day and 76.9% of people earning less than $10 per day, most of them closer to $2 than 10. With nearly 97% earning less than $10 per day it is not surprising that only about 3% of people file tax returns and 1% pays income tax. One big surprise thrown up by the survey is the cost of houses. The median price, which is middle of the range, paid by the top 20% was just Rs 1 million, while the median price paid by the top 1% was a paltry 1.8 million. A quick glance at real estate prices in Delhi shows that any 2 bedroom apartment in a good locality will cost well in excess of Rs 1.8 million. These are probably official rates. To buy an apartment one would have to pay at least an equal amount in cash, which means black money. With demonetisation cash has virtually disappeared so the real estate market is frozen until such time that people are able to collect enough cash. The average dwelling size in rural India is 431 sq feet while those in urban area are an average of 422 sq feet, while apartments in the US have fallen to an average of 934 sq feet. When it came to consumer spending rural areas spent 57% of the total Rs 42.2 trillion last year, but rural household spending was an average of Rs 9,423 per month compared to Rs 20,227 in urban areas. People cannot move because they do not earn enough and they cannot earn unless they move to where jobs are. The only solution is to bring down the number of people. Everyone will gain.