Truths About Poverty And Inequality In India


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Truths about Poverty and Inequality in India

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Truths About Poverty And Inequality In India

  1. 1. Shashikant S Kulkarni
  2. 2. <ul><li>Inequality in asset ownership (including land), India is much worse than China. </li></ul><ul><li>When it comes to education, in which India is one of the most unequal in the world. </li></ul><ul><li>These kinds of inequality are growth-retarding, so there is no trade-off between equity and efficiency. </li></ul>
  3. 3. <ul><li>India during the years of more rapid growth has not seen poverty levels come down significantly faster </li></ul><ul><li>There is no data for the post-2003 period, which has seen the fastest growth so far. </li></ul><ul><li>Even in China, the poorest 10 per cent of the population have seen very little improvement in their standards of living. </li></ul>
  4. 4. <ul><li>The rapid growth in India and China is nether anti-poverty, nor pro-equality. </li></ul><ul><li>Economic reforms and the greater role of markets responsible for growth being anti-poor and anti-equality </li></ul><ul><li>Failure of governance in poverty-ridden states like Bihar and Jharkhand. </li></ul>
  5. 5. <ul><li>According to a recent Indian government committee constituted to estimate poverty, nearly 38% of India’s population (380 million) is poor. This report is based on new methodology and the figure is 10% higher than the present poverty estimate of 28.5%. </li></ul>
  6. 6. <ul><li>Since 1972 poverty has been defined on basis of the money required to buy food worth 2100 calories in urban areas and 2400 calories in rural areas. In June this year a government committee headed by NC Saxena estimated 50% Indians were poor as against Planning Commission’s 2006 figure of 28.5%. </li></ul>
  7. 7. <ul><li>Even after more than 50 years of Independence India still has the world's largest number of poor people in a single country. Of its nearly 1 billion inhabitants, an estimated 260.3 million are below the poverty line, of which 193.2 million are in the rural areas and 67.1 million are in urban areas. More than 75% of poor people reside in villages. Poverty level is not uniform across India. The poverty level is below 10% in states like Delhi, Goa, and Punjab etc whereas it is below 50% in Bihar (43) and Orissa (47). It is between 30-40% in Northeastern states of Assam, Tripura, and Mehgalaya and in Southern states of TamilNadu and Uttar Pradesh. </li></ul>
  8. 8. <ul><li>The Indian state has undoubtedly failed in its responsibilities towards its citizens over the last 60 odd years. There is a need for the state to move out of many areas and the process has been started with economic liberalization. The process of decentralization should devolute lot more powers, both functional and financial, to panchayats. The lack of transparency and accountability has hampered our economic development at all levels. The problem of poverty persists because of a number of leakages in the system. </li></ul>
  9. 9. <ul><li>New laws have to be evolved to ensure more accountability. Bodies like the Planning Commission should be modified into new constitutional bodies that can hold governments accountable for their failure to implement development programmes. A strong system of incentives and disincentives also needs to be introduced. The encouragement of non-governmental organizations and private sector individuals in tackling poverty is imperative, as the state cannot do everything. </li></ul>
  10. 10. <ul><li>The common conclusion about inequality in India is that not only has it been worsening, but worsening sharply. </li></ul><ul><li>Not only are the rich getting richer, but horribly so </li></ul><ul><li>The most popular measure of inequality is the Gini coefficient. If all individuals have the same consumption (or income), then the Gini has a value of 0, perfect equality. If one individual has all the consumption, the Gini has a value of 100--perfect inequality. </li></ul>
  11. 11. <ul><li>A large decline in inequality between 1951 and 1983, and then a flattening. For the high-growth period 1983-2005, the pattern is a V shaped one--a small 5 per cent decline in inequality between 1983 and 1994, and a corresponding equal increase over the next decade. </li></ul>