By- Ira Sharma
Any one would be shocked to hear that inequality in earnings has doubled in India over the past two decades, and thesaddest part is that it makes our country one of the worst performers among emerging economies. The Organisation for Economic Cooperation and Development (OECD) says the top 10% of wage earners make 12 times more than the bottom 10%, as compared to six times 20 years ago.
The paris based OECD is a grouping of 34 advanced and emerging economies. The OECD says India has the highest number of poor in the world. In India the ratio between the top and the bottom wage earners has doubled since the early 1990s, and the saddest part is that India has also not fared well in poverty reduction. It says 42% of Indians live below the poverty line, as against the official Indian figure of 37%. Recently, the Indian government was criticized for saying that an individual income of 25 rupees (52 US cents) a day would help provide for adequate private expenditure on food, education and health in villages.
I, on my part would challenge the members of the Planning Commission to live on 25 rupees or 32 rupees a day till such a time that they are able to explain to the public in simple words the basis of the statement that this amount is ‘normatively adequate’.
Even the countries like Indonesia, Argentina have recorded significant progress in reducing inequality over the past 20 years. The most interesting part is many experts came up and argued that the income limit to define the poor was too low and aimed at artificially reducing the number of people below the poverty line and in return power holders didn’t even gave it a wise thought. Even World Bank also stated that attempts made by Indian Government to combat poverty were not working. Aid programmes were beset by corruption, bad administration and underpayments.
The Indian government has released its latest census, its population has grown by over 17% in the last decade to 1.21billion people. The figure indicate the kind of social and economic progress India has made over the past decade, but also highlights where India lags behind.
Views presented in the article are those of the author and not of ED.