In the ongoing election, the ruling Bharathiya Janata Party (BJP) has focused on the concept of ‘New India’ and India’s future. Glorifying India’s past and promising progress in all economic fields are usually very attractive propositions for the average Indian who is sick of being labelled as a Third World resident. The new narrative is strongly of a resurgent India which has shed its Third World status. Prime Minister Narendra Modi wants the nation to have countless startups and become a leader in renewable energy.
Glorifying India’s past and promising progress in all economic fields are usually very attractive propositions for the average Indian who is sick of being labelled as a Third World resident.
The Congress party has, on the other hand, chosen poverty reduction as its main plank which is not something new. Congress president Rahul Gandhi has claimed that he will undertake ‘surgical strikes on poverty’. India’s poverty story interests, specially the foreign press, who at the same time express wonder at the fast pace of development in the fields of space, startups and IT industry in various parts of India.
The many facets of India’s poverty and the growing inequality, however, persists. The existence of
multidimensional poverty is indeed worrisome and according to UNDP and Oxford Poverty and Human Development Initiative, a large swathe of the population, comprising of 364 million people, continue to experience deprivation in health, schooling, and sanitation. Multidimensional poverty index looks into 10 indicators: nutrition, child mortality, years of schooling, school attendance, sanitation, cooking fuel , drinking water, electricity, housing and assets. India’s MPI was 0.121 and was ranked 53 out of 105 developing countries in 2017.
While there has been much progress in science and space and innovative applications of digital technology in many fields, India is still experiencing a shocking rise in inequality. The ‘trickle down’ effect has not been very effective, even though 271 million people moved out of poverty between 2005-06 to 2015-16. The poverty rate has nearly halved falling from 55 per cent to around 28 per cent in the 10-year period. Much of the 10-year period was under the Congress-led UPA rule.
The ‘trickle down’ effect has not been very effective, even though 271 million people moved out of poverty between 2005-06 to 2015-16. The poverty rate has nearly halved falling from 55 per cent to around 28 per cent in the 10-year period. Much of the 10-year period was under the Congress-led UPA rule.
But there is truth in the allegation that the Indian economy with its high growth rate of GDP growth has benefited India’s rich more than the poor. Very few of the really poor have been able to climb into the Middle classes as various handicaps prevent them from doing so. According to the World Inequality Report 2018,India is the second most unequal region in wealth distribution in the world. In 2017, 73 per cent of wealth generated went to the richest 1 per cent. The poorest 67 crore Indians comprising the poorest half of the population saw only 1 per cent increase in their wealth.
In 2017, 73 per cent of wealth generated went to the richest 1 per cent. The poorest 67 crore Indians comprising the poorest half of the population saw only 1 per cent increase in their wealth.
The number of dollar billionaires (101) and dollar millionaires (3,43000) is increasing at a fast rate. The growing inequality between social and economic groups leads to disparity in access to health, education and basic services. Due to inadequate health services, many of those who are just above the poverty line recede below it if a serious disease hits any member of the family. Similarly, inequality in opportunities due to lack of proper education, training in skills, inability to speak and write English, connections and assets are serious disadvantages faced by low income families.
Mitigating inequality has not been important on the agenda of economic reforms carried out by either the UPA or the Modi governments. They did not make inclusive growth their main plank of action. Modi, however, has claimed recently that 50 crore poor are now getting Rs 5 lakh each for medical expenses under the Ayushman Bharat programme. He has put in place the Jan Dhan Yojna and direct cash transfer into the accounts of the poor on centrally funded schemes. He has given free cooking gas to poor households. Yet, inequality in the access to good healthcare with high ‘out of pocket’ expenditure still remains a problem because of the minuscule amount of public expenditure that has been devoted to health by the NDA government and before it by the UPA government.
Mitigating inequality has not been important on the agenda of economic reforms carried out by either the UPA or the Modi governments. They did not make inclusive growth their main plank of action.
The re-distributive policies are inadequate and the system of social protection for 90 per cent of the labour force working in the informal sector still remains incomplete and is dragging down the living standards of the poor. Lack of good quality formal jobs is also missing. Rural and urban youth aspire for government jobs, but the demand is far greater than the vacancies. With unemployment at 6.7 percent in the economy, people are forced to opt for low quality, low paying jobs because of lack of other options. Women aspiring for jobs have been hard hit and many have opted out of the labour force, making women participation in the labour force far below the world average at 24 per cent. There is growing marginalisation of women from the growth process.
The re-distributive policies are inadequate and the system of social protection for 90 per cent of the labour force working in the informal sector still remains incomplete and is dragging down the living standards of the poor.
Under the UPA government also, there were many anti poor programmes also, like the MNREGA, Right to Food, right to education, indirect income transfer on food related schemes, but on the whole, its agenda of inclusive growth and uplift of informal sector workers through an adequate social safety net remained largely unfulfilled. The NDA government launched a more comprehensive programme regarding various types of insurances for securing the future of the informal sector workers but more needs to be done.
Whichever party comes to power, the serious problem of inequality that leads to high rate of multidimensional poverty will have to addressed. The label of India being a third world country will stick on even when it becomes a $10 trillion economy if widespread inequality persists. India ranks low at 132 out of 152 countries in OXFAM’s ‘Commitment to Reducing Inequality Index' reflecting its poor commitment to the reduction of inequality by continued low social spending on health and education, not taxing the rich highly enough and not offering sufficient protection to labour and their rights. High inequality is likely to undermine democracy, promote corruption and cronyism. Reduction of inequality on the other hand will lead to faster reduction of poverty a goal sought by both the Congress party and the BJP.
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