The Socio-Economic and Caste Census 2011 is an important compilation from the point of view of future policy action. For the first time there has been a detailed survey on rural India where households have been interviewed and classified under different categories. Such a classification can be used effectively for devising schemes for improving the life of the people.

However, there is a view that since the census is based on a survey, there could have been a tendency for understating the wellbeing of a household with the lurking fear that they could get excluded from certain benefits if a true revelation is made. But even so, the data can be used meaningfully for targeted programmes of the government.

Corporate lessons The first important takeaway is that 73.4 per cent of households are rural-based; this is a large number. This fact also gels well with the view often held that rural consumption is one of the driving forces of the economy given the large size of the population. Hence, while focusing on smart cities is an idea that should be implemented in parallel, the thrust of the development process has to be rural-based as this is where most people reside.

It has often been argued that in the last three years, consumer spending especially on durable goods has come down mainly due to less post-harvest-cum-festival spending by rural households. This also provides a clue to corporate India that a large market does exist for their products in this region, but given the lower levels of income and high levels of deprivation, they would need to customise their production processes.

Second, going by the census, 10.69 crore households out of 17.91 crore households may be considered for deprivation. The criteria look at seven parameters such as single-room house, no adult member, no literate member, SC/ST, landless households and so on. Looking at households which fall in at least one of these buckets, 48.5 per cent of the households in rural India are under deprivation.

This number is quite shocking as normally we keep viewing poverty numbers and debate on the income or consumption criteria where different cutoffs are used. But by linking poverty with consumption/calorie criteria, we narrow the scope of deprivation. The deprivation methodology drawn up here looks like a more reasonable definition as it looks at multiple criteria which most of us take for granted once we reach a certain income level.

In fact, as the households have been identified, the Centre and States can take up these seven issues and address them through directed programmes. This would mean having housing schemes for those who have a single-room kuccha house, permanent employment for those who do not own land, education access for families with no literate member, special employment for women who run their households in the absence of an adult male , and so on. Therefore, social development programmes in rural India can be better targeted to lower the level of deprivation.

Beyond land-holders Third, the classification of households on the basis of income is quite revealing. There are 9.16 crore landless labourer households which constitute 51.1 per cent of rural households. Land reforms keep talking of fair compensation to the owners of the land along with other issues relating to social audit and purpose of land use.

But if half the rural households are dependent on employment on other people’s land, any such transaction has to also address the concerns of this population which is large and cannot be ignored. Converting farm land into a highway is good for development, but the displacement of such casual labour which is not covered under the land compensation dispensation will have serious social implications. Fourth, around 30 per cent of the households are cultivators and involves around 5.4 crore families. This would be the section vulnerable to the monsoons and require special attention in terms of provision of farm inputs including irrigation and knowledge about crop prices, access to markets, etc.

Any attention given to enhancing productivity in agriculture would have to focus on these families. It has been seen anecdotally that the involvement of corporates in farming has helped to enhance their standard of living with end-to-end solutions being offered.

Finally, the fact that just 14 per cent of rural households are employed either with the government or the private sector is a reflection of the level of education. It also points to limited growth opportunity for future generations.

The SECC Census is a wake-up call for us to think harder on how to improve the standard of living of the poor in rural areas. In fact, to keep the capitalist machines moving it is essential that standards in rural India also improve.

(The writer is the chief economist at CARE Ratings. The views are personal)