This article was printed in the Dawn:
Budget: Hand to mouth
How do low income families survive in Pakistan? The challenge is to answer this question with a low income budget. The minimum monthly wage for a full time worker for 2010-2011 is Rs7000. According to Karamat Ali, Executive Director of the Pakistan Institute of Labour, Education and Research (PILER) “About 80per cent of industries do not meet the minimum wage.”
Therefore no realistic budget is possible within this figure.
Dr Naeem Ghani, Sultana Foundation
At the higher end of the low scale is Rs36,000, covering the basic requirement for a family of six according to a study conducted by Dr Naeem Ghani, the founder Chairperson of the Sultana Foundation, an educational Trust financed by charitable donations.
A medical doctor and dedicated philanthropist, Dr Ghani works with low income families in the fields of health and education. All costs in his budget are based on a monthly figure for a family of six, the average size of a Pakistani family:
1) Food: Based on a basic daily nutritional requirement for a single person of 2000 calories including 50-60gms of protein and clean drinking water. No soft drinks, tea or coffee included. Total for six people: Rs14,400.
2) Accommodation: A two-three room basic home, owned or leased on a 25 year installment scheme. Total: Rs4,000.
3) Utilities and other expenses such as maintenenace, sanitation etc: Total: Rs3,000.
4) Clothing: Two suits per year, one pair of shoes, accessories, and expenses for laundry. Total: Rs1,800.
5) Other personal expenses (requirements of toiletries, transport, telephone, etc.): Total: Rs3,000.
6) Tax contribution towards health, education, a clean environment and civic bodies: 20per cent of the family’s income. Half this amount to be used for the above, the other half towards the maintenance of the police, army, etc. Total Rs6,000.
7) Saving: 8per cent of a family’s income for emergencies e.g support in case of job loss. Total: Rs2,800.
At least two people in the family must work to maintain the minimum wage at this level.
GRAND TOTAL: Rs35,000 equivalent to 400USD at today’s exchange rate of Rs86/USD.
The trend of these figures well illustrates inflation: within twenty years the cost in rupees went from 4,800 to 24,000, and last year rose further to 35,000.
The equivalent figure in USD remained at 300 for the first twenty years, and only rose to 400 last year.
There is also the figure of Rs25,000 per month. This is the minimum monthly income requirement for most banks to grant a credit card in Pakistan.
Here is a suggested monthly budget given Rs25,000 for a family of six. No consideration has been given to calorie or protein requirements, the guiding principle being ‘making do’.
Food
Meat Rs1200 (4kg at Rs300/kg Beef)
Flour Rs980 (40kg at Rs280/kg)
Lentils: Rs480 (6kg, channa being the cheapest)
Eggs: Rs240 (3 people consuming an egg each every other day: 48 eggs at average of Rs70 per dozen
Onions: Rs250 (10kg at Rs25/kg)
Tomatoes: Rs250 (5kg at Rs50/kg)
Potatoes: Rs68 (4kg at Rs17/kg
Garlic: Rs100 (½ kg at 200/kg)
Ginger: Rs35 ( ½ kg at Rs 70/kg)
Carrots: Rs15 at 15kg or any other equivalent vegetable
Salt, Chillies: Rs220
Oil: Rs700
Tea: Rs500
Sugar: Rs340 (5kg at Rs68/kg)
Milk: Rs3,150 (70 kilos at Rs45/kg)
Total Rs8,528
Accommodation: Rs2,000
Utilities and other expenses such as maintenance, sanitation, etc:
Gas: Rs240
Electricity: Rs2,500
Water: Rs50
Toiletries, etc: Rs350
Total Rs3,140
Clothing: Rs1,000
Uniforms: Rs500
Shoes: Rs800
Total: Rs2,300
Other personal expenses (requirements of toiletries, transport, telephone, etc.): Rs6,000
Education- School/college fees: Rs3,000
Total Rs3,000
Saving: You have to be joking.
GRAND TOTAL: Rs24,968
Since this budget was produced, prices of fuel have risen further.
There is a difference of Rs10,000 between Dr Ghani’s budget of Rs35,000 and the budget of Rs25,000, and a world of difference between both of these and the minimum wage of Rs7,000 in Pakistan.
A budget of Rs35,000 holds possibilities for a minimally functional life, a relatively peaceful state, and hope of progress.
A family of six reared within a budget of Rs25,000 will be deprived of many essentials, and of proper food and nutrition. There will be no savings or contribution towards civic amenities. Barring innate principles, they will be prone to corruption already pervading every strata of our society.
For the family living on Rs7,000 there will be few options but crime to make ends meet.
The answer appears to be that it is crucial to raise the minimum wage, in keeping with the rate of inflation in this country, while taking measures to keep inflation down. With this in mind, carefully considered and responsible policies are required.
Budget: Hand to mouth
Therefore no realistic budget is possible within this figure.
| Dr Naeem Ghani, Sultana Foundation |
A medical doctor and dedicated philanthropist, Dr Ghani works with low income families in the fields of health and education. All costs in his budget are based on a monthly figure for a family of six, the average size of a Pakistani family:
1) Food: Based on a basic daily nutritional requirement for a single person of 2000 calories including 50-60gms of protein and clean drinking water. No soft drinks, tea or coffee included. Total for six people: Rs14,400.
2) Accommodation: A two-three room basic home, owned or leased on a 25 year installment scheme. Total: Rs4,000.
3) Utilities and other expenses such as maintenenace, sanitation etc: Total: Rs3,000.
4) Clothing: Two suits per year, one pair of shoes, accessories, and expenses for laundry. Total: Rs1,800.
5) Other personal expenses (requirements of toiletries, transport, telephone, etc.): Total: Rs3,000.
6) Tax contribution towards health, education, a clean environment and civic bodies: 20per cent of the family’s income. Half this amount to be used for the above, the other half towards the maintenance of the police, army, etc. Total Rs6,000.
7) Saving: 8per cent of a family’s income for emergencies e.g support in case of job loss. Total: Rs2,800.
At least two people in the family must work to maintain the minimum wage at this level.
GRAND TOTAL: Rs35,000 equivalent to 400USD at today’s exchange rate of Rs86/USD.
The trend of these figures well illustrates inflation: within twenty years the cost in rupees went from 4,800 to 24,000, and last year rose further to 35,000.
The equivalent figure in USD remained at 300 for the first twenty years, and only rose to 400 last year.
There is also the figure of Rs25,000 per month. This is the minimum monthly income requirement for most banks to grant a credit card in Pakistan.
Here is a suggested monthly budget given Rs25,000 for a family of six. No consideration has been given to calorie or protein requirements, the guiding principle being ‘making do’.
Food
Meat Rs1200 (4kg at Rs300/kg Beef)
Flour Rs980 (40kg at Rs280/kg)
Lentils: Rs480 (6kg, channa being the cheapest)
Eggs: Rs240 (3 people consuming an egg each every other day: 48 eggs at average of Rs70 per dozen
Onions: Rs250 (10kg at Rs25/kg)
Tomatoes: Rs250 (5kg at Rs50/kg)
Potatoes: Rs68 (4kg at Rs17/kg
Garlic: Rs100 (½ kg at 200/kg)
Ginger: Rs35 ( ½ kg at Rs 70/kg)
Carrots: Rs15 at 15kg or any other equivalent vegetable
Salt, Chillies: Rs220
Oil: Rs700
Tea: Rs500
Sugar: Rs340 (5kg at Rs68/kg)
Milk: Rs3,150 (70 kilos at Rs45/kg)
Total Rs8,528
Accommodation: Rs2,000
Utilities and other expenses such as maintenance, sanitation, etc:
Gas: Rs240
Electricity: Rs2,500
Water: Rs50
Toiletries, etc: Rs350
Total Rs3,140
Clothing: Rs1,000
Uniforms: Rs500
Shoes: Rs800
Total: Rs2,300
Other personal expenses (requirements of toiletries, transport, telephone, etc.): Rs6,000
Education- School/college fees: Rs3,000
Total Rs3,000
Saving: You have to be joking.
GRAND TOTAL: Rs24,968
Since this budget was produced, prices of fuel have risen further.
There is a difference of Rs10,000 between Dr Ghani’s budget of Rs35,000 and the budget of Rs25,000, and a world of difference between both of these and the minimum wage of Rs7,000 in Pakistan.
A budget of Rs35,000 holds possibilities for a minimally functional life, a relatively peaceful state, and hope of progress.
For the family living on Rs7,000 there will be few options but crime to make ends meet.
The answer appears to be that it is crucial to raise the minimum wage, in keeping with the rate of inflation in this country, while taking measures to keep inflation down. With this in mind, carefully considered and responsible policies are required.
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