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A middle class residential apartment complex in Mumbai, India

The standard of living in India is modest and is constantly improving. The single most common indicator used to quantify standard of living is the per capita purchasing power parity (PPP) adjusted gross domestic product (GDP). In 2005, the per capita PPP adjusted GDP for India was US$ 3,460. These figures can be compared to $6,660 for China a neighbouring country.

With one of the fastest growing economies in the world, clocked at an average growth rate of 8% between 2004-2005, India is fast on way to become a large and globally important consumer economy. The Indian middle class, touted to be anywhere between 200 and 300 million, is fast becoming used to the Western lifestyle. If current trends continue, Indian per capita purchasing power parity will grow to be approximately one third that of the developed world by the middle of the 21st century. In 2006, 22 percent of Indians lived under the poverty line, down from 50 percent in 1995. India has is aimed to eradicate poverty by 2020.^[1]

The standard of living in India can range in magnitudes such as basic medical facilities in rural areas to world class medical facilities in the cities. The very latest machinery is used in construction projects, but many of those in the extremely large labour pool still work without mechanisation.

Main article:Poverty in India

In New Delhi, a woman wields a pickaxe on a footpath maintenance project while her husband rests and her baby sleeps

The recent economic developments have helped upper and middle class Indians. Still a high proportion of India's citizens are in need of the benefits of development. The National sample survey organisation (NSSO) estimated that 22.15% of the population was living below the poverty line in 2004–2005, down from 51.3% in 1977–1978. 75% of the poor are in rural areas (27.1% of the total rural population) with most of them comprising daily wagers, self-employed households and landless labourers. 34.7% of India's poorest population still live on less than US$1 a day and 79.9% live on US$2 per day.

Since the early 1950s, successive governments have implemented various schemes, under planning, to alleviate poverty, that have met with partial success. Programmes like Food for work and National Rural Employment Programme have attempted to use the unemployed to generate productive assets and build rural infrastructure.^[2] In August 2005, the Indian parliament passed the Rural Employment Guarantee Bill, the largest programme of this type, in terms of cost and coverage, which promises 100 days of minimum wage employment to every rural household in 200 of India's 600 districts. The question of whether economic reforms have reduced poverty or not has fuelled debates without generating any clear cut answers and has also put political pressure on further economic reforms, especially those involving downsizing of labour and cutting down agricultural subsidies.^[3][4]

Cheap and environment friendly public transport is seen as a necessity for India's crowded and polluted metros. Pictured here, is the New Delhi Metro, operational since 2002 and seen as a model for other metros.

Since independence, India has allocated nearly half of the total outlay of the five-year plans for infrastructural development. Much of the total outlay was spent on large projects in the area of irrigation, energy, transport, communications and social overheads. Development of infrastructure was completely in the hands of the public sector and was plagued by corruption, bureaucratic inefficiencies, urban-bias and an inability to scale investment.^[5]

India's low spending on power, construction, transportation, telecommunications and real estate, at $31 billion or 6% of GDP, compared to China's spending of $260 billion or 20% of its GDP in 2002 has prevented India from sustaining a growth rate of around 8%. This has prompted the government to partially open up infrastructure to the private sector allowing foreign investment.^[6][7][2] India holds second position in the world in roadways' construction, more than twice that of China.^[8]

As of 31 December 2005, there were an estimated 835,000 broadband lines in India.^[9] Low tele-density is the major hurdle for slow pickup in broadband services. Over 76% of the broadband lines were via DSL and the rest via cable modems.

Main article: List of regions of India

Performance of Indian states in providing basic social services like education, healthcare, etc., in 2001. Darker states have done better.

One of the critical problems facing India's economy is the sharp and growing regional variations among India's different states and territories in terms of per capita income, poverty, availability of infrastructure and socio-economic development. For instance, the difference in growth rate between the forward and backward states was 0.3% (5.2% & 4.9%) during 1980–81 to 1990–91, but had grown to 3.3% (6.3% & 3.0%) during 1990–91 to 1997–98.^[10]

The five-year plans have attempted to reduce regional disparities by encouraging industrial development in the interior regions, but industries still tend to concentrate around urban areas and port cities. Even the industrial townships in the interiors, Bhilai for instance, resulted in very little development in the surrounding areas.^[11] After liberalisation, the disparities have grown despite the efforts of the union government in reducing them. Part of the reason being that manufacturing and services and not agriculture are the engines of growth. The more advanced states are better placed to benefit from them, with infrastructure like well developed ports, urbanisation and an educated and skilled workforce which attract manufacturing and service sectors. The union and state governments of backward regions are trying to reduce the disparities by offering tax holidays, cheap land, etc., and focusing more on sectors like tourism, which although being geographically and historically determined, can become a source of growth and is faster to develop than other sectors.^[12][13]

See also: States of India by size of economy

• Economy of India

1. ^ "Poverty can be eradicated by 2020: Kalam". The Indian Express. Retrieved on 2006-07-04.
2. ^ ^{a b}
3. ^
4. ^ Jawahar gram samriddhi yojana. Retrieved on July 9, 2005.
5. ^ Sankaran, S (1994). Indian Economy: Problems, Policies and Development. Margham Publications. ISBN. 
6. ^ Infrastructure the missing link. Retrieved on August 14, 2005.
7. ^ Infrastructure in India: Requirements and favorable climate for foreign investment. Retrieved on August 14, 2005.
8. ^ Infrastructure Rankings.
9. ^ World broadband statistics q4-2005. Retrieved on 2006-07-24.
10. ^ Datt, Ruddar & Sundharam, K.P.M.. "27", Indian Economy, 471–472. 
11. ^ Bharadwaj, Krishna (1991). "Regional differentiation in India", in Sathyamurthy, T.V. (ed.): Industry & agriculture in India since independence. Oxford University Press, pp. 189–199. ISBN 0-19-564394-1. 
12. ^ Sachs, D. Jeffrey; Bajpai, Nirupam and Ramiah, Ananthi (2002). "Understanding Regional Economic Growth in India". Working paper 88.
13. ^ Kurian, N.J.. Regional disparities in india. Retrieved on August 6, 2005.