Inequality gap between rich and poor widens

Mumbai For a country that prides itself on its growth figures, here's a sobering thought. The 'India shining' premise has escaped the poor by a huge margin. Take Phulmani Hirmu from a Jharkhand village, for example. A widow and head of a family of nine members, the money she makes as a domestic help is barely enough to get her family two square meals a day. She says, "If we eat in the morning, we have to go without food in the evening and if we eat in the evening, then we don't know where to get food for the morning."

It's a grim reality many in the country live with every day. India's growth story hasn't brought them hope at the same speed with which it has impacted the lives of those in urban India. An inequality which is also reflected in the data released by the National Sample Survey Organisation (NSSO).

According to the NSSO's provisional data on household consumer expenditure, the per capita monthly expenditure in 2011-12 in rural India was estimated at Rs 1281.45. It was Rs 2401.68 in urban India. Which means the per capita expenditure level of urban India is 87.4 per cent higher than that of rural India.

Simply put, over the last two years, the rich have got richer and the poor poorer. On an average, the poorest 10 per cent of Indians live on just Rs 16 per day to survive whereas the richest 10 per cent spend Rs 255 per day.

The provisional results of the latest survey are based on a sample comprising 7391 villages (59,070 households) and 5223 urban blocks (41,602 households) in nearly all states and union territories.

Professor Himanshu, who teaches Economics at Jawaharlal Nehru University (JNU) puts the data in perspective. He says, "The growth rate has improved, consumption has improved which is what we expect. This certainly means rural people have benefitted out of it. The question is: is it sufficient? Second question is who is really benefiting? Is it just some sections of population or is it more broad-based? Preliminary findings show it has not benefitted (poor) with inequality increasing much faster than we anticipated. There has been a much slower growth for these populations and that should be a cause for concern especially for a government which has taken inclusive growth as a corner stone of its policy."

Though the data is provisional, it is an important indicator on the basis on which key government decisions will be made like taking a call on the country's Gross Domestic Product (GDP), the inflation figures and even deciding the poverty level.

Professor Himanshu also says he feels that as regards the contentious poverty line debate, there will perhaps be little change. He says, "Those numbers are not going to change much as far as poverty line is concerned. Unless another committee takes a very different view from what has been considered. Based on these consumption numbers, I don't see poverty lines change much."

The final data is expected to be ready only next year, but this data reinforces what some economists have pointed out that India perhaps needs a flash flood and not a trickle down for equitable distribution of wealth.
Story First Published: August 02, 2012 23:50 IST

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