New Delhi, May 20, 2022: The latest State of Inequality in India Report indicates a vast income distribution disparity in the country.
The report prepared by Economic Advisory Council to the prime minister shows the need to address gaps to help the country achieve social progress and shared prosperity.
India has proved the overall condition of households, with access to necessities and adequate water supply and sanitation. However, the measures for income parity, poverty, and employment needs to be improved significantly, the report adds.
Top 1 percent of India’s population accounts for 5-7 percent of the national income whereas 15 percent of the country’s working population earns less than 5,000 rupees a month.
Those earning an average of 25,000 rupees a month fall into the top 10 percent of the total wages earned bracket, which accounts for about 30-35 percent of the total income.
In another revelation on the inequality in India, the income of the top 1 percent shows a growing trend while that of the bottom 10 percent is shrinking.
According to the National Family and Health Survey (NFHS) 2015-2016 data, there is a huge gap in household wealth between rural and urban spaces.
Notably, more than 50 percent of the households fall in the bottom proportion of wealth concentration (about 54.9 percent).
That paints a gloomy inequality picture for India, with that disparity worse in rural areas, where a bigger proportion of the population resides than in urban places.
A recent working paper by the World Bank, “Poverty in India Has Declined over the Last Decade But Not As Much As Previously Thought,” by Roy and Van der Weide, highlights that extreme poverty in India has declined by 12.3 percentage points from 2011 to 2019 but at a slower rate than observed between 2004 and 2011.
That underscores the need for the country to mobilize policies aimed at bringing the vast population out of poverty at a faster rate.
While India aims to become a $5 trillion economy based on a gross domestic product measure, the number of poor symbolizes how far a country is in achieving its social progress and growth goals.
The everyday experiences of inequality and poverty are intensely reflected in the population’s living standards, and therefore mapping the household conditions becomes essential to ascertain the extent of disparity and its socioeconomic indications.
To bridge those concerns, the report recommended the implementation of the principles of the Mahatma Gandhi National Rural Employment Guarantee Act 2005 (MGNREGA) in urban areas and the adoption of universal basic income (UBI).
Universal basic income is a policy proposal in which all citizens will regularly receive equally set financial transfer grant from the government. A basic income can be implemented nationally, regionally, or locally and is done without a means of income test.
Source: ndtv.com