India becomes richer, Indians poorer

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December 12th, 2011 Tarun Chaturvedi

According to a new report by the Organisation for Economic Cooperation and Development (OECD) inequality in earnings has doubled in India over the past two decades, making it one of the worst performers among emerging economies which include Argentina, Brazil, China, South Africa and Russia. According to the report, the top 10% of wage-earners make 12 times more than the bottom 10%, compared to six times 20 years ago — a sign that inequality of income is increasing by the year.

Unfortunately, this has happened during a period which is touted as the golden period of economic reforms in India. During this period, the country has seen unprecedented growth rates which have created an aura of INDIA GROWING. There is no doubt that India is a growing nation and on most of the macroeconomic (GDP-based) indicators, the country has done better than its peers. However this report raises serious doubt whether the large part of India (which still remains very poor) has benefitted from this growth period or not. The findings of the report clearly indicate that the growth in India has been very deep but not wide. The inclusive factor in the growth has been totally missing. Infact if one is to go by the report numbers, the growth in India has been exclusive, leaving a large part of the population untouched. These are surely not good signs for the future of the country.

Even in terms of absolute numbers, India has the highest number of poor in the world. Around 42% of its 1.21 billion people live on less than $1.25 a day.

As far as comparison with other emerging economies is concerned the report finds that Brazil, Indonesia and Argentina, on some indicators have recorded significant progress in reducing inequality over the past 20 years. By contrast, China, India, the Russian Federation and South Africa have all become less equal over time.

The situation is really grave and is a matter of great concern even more when we have a government which continuously claims as having introduced the most amount of welfare measures in the form of MNREGA and such like. It is time that the government came to grips with the situation and started taking corrective policy measures aimed at a ensuring a more egalitarian growth. As far as the aid programmes are concerned, the less said the better, but nonetheless it is known that they are beset with corruption, bad administration and leakages.

 

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One Response to “India becomes richer, Indians poorer”

  1. Pucca Ghati Says:

    With Delhi and the mother + Son + daughter Gandhis in charge , Ambanis the oligarchs running the show , Mamta as de facto veto does it surprise anyone except the North Indian journalist ? Only The North Indian and Manmohan and the foreigner

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