The rich-poor gap grows

The findings of the 68th National Sample Survey Organisation survey, conducted in 2011-12, on monthly per capita expenditure have reaffirmed that inequality in India is growing  despite economic growth and the increasing income and consumption levels of the average Indian. As compared to the last survey, conducted in 2009-10, the monthly expenditure of the poorest 10 per cent population in rural India has risen by only 11.5 per cent, while that of the richest 10 per cent has gone up by 38 per cent. The monthly expenditure of the poorest 10 per cent of urban population has risen by 17.2 per cent while that of the richest 10 per cent is up by 30.5 per cent. The poorest 10 per cent living in rural India spend on an average only Rs 16.8 per day to survive, and half the rural population in India spends less than Rs 35 per day. It emerges from the survey that in urban India, the poorest 10 per cent spend Rs 23.4 per day in  contrast to the richest 10 per cent who spend Rs 255.1 on an average. Thus, 90 per cent rural Indians spend less than Rs 68.47 per day per person and 90 per cent urban Indians spend less than Rs 142.70. Not only is the economic divide between the rich and the poor  persisting but it has, in fact, grown with the rich having become richer and the poor poorer.

It appears that the growth that India is experiencing has not trickled down to the poor but its benefits have only gone to those already well off who have taken advantage of globalisation and the market-oriented reforms. This is a commentary on government policies and on the economic reforms, which have provided lip service to the concept of inclusive growth but have, in fact, helped only the better off and the rich. The statistics are all the more regrettable because growing inequality encourages politicians to indulge in reckless populist policies, which further undermine economic performance resulting in a perpetuation of povery: It is a vicious cycle. Lop-sided growth is dangerous in the long-run for a high degree of inequality breeds social tensions between the haves and have nots. This generates instability and is an explosive cauldron that can explode any time. The government must heed the results of such surveys and take corrective action.