The gap between the rich and the poor in India is not that wide
According to a survey by the World Institute of Development Economics Rsearch (WIDER) there isn’t that great an economic difference between poor Indians and rich Indians. Well, at least not by global standards. The top 10 per cent of the richest Indians are 7.3 times richer than the poorest 10 per cent, but other nations fare worse.
The rich in countries like Brazil are 57.8 times richer than the poor, and the ratio for the United Kingdom is 13.8 times, the United States almost 15.9 times, China 18.4 times and Russia 12.7 times. More horrifying – the top ten per cent of Bolivia‘s population is 168 times richer than its poorest 10 percent! The ratio for Namibia is 129 times and Lesotho 129 times.
Enough reason for Indians to gloat?
Not really. We may have a better distribution of income here, but the per capita income in India is so low that the bottom 10 percent are near starving and without access to education (or hope) which is the only way they can better their life. Therefore comparing ourselves to the developed world or even second world countries like Brazil is of no use.
A look at the $PPP (Purchasing Power Parity) of different countries (for a more detailed explanation of $PPP and the $PPP of all the countries of the world go here.
India, according to data from the CIA World FactBook has a PPP of $3700, while countries like the US are way ahead with $43,500 and the UK at 31,400. Brazil is also higher than us at $8,600. So even if the top ten percent of people in the US are obscenely rich, the poor there aren’t as poor as the poor in India. Well, we knew it I guess, by seeing the Oprah Winfrey Show! In one of her shows she showed us ‘poor’ America. Looking at the plump well-fed faces, one wondered whether those people knew what real poverty was. Being poor by American standards didn’t mean insufficient food. It didn’t mean starvation. It meant not having a car and depending on social security. Perhaps being homeless, and falling back on government shelters.
A comparision with China seems more valid. China’s $PPP is just above India’s at $7600 (not including Hong Kong) which goes to show that the wealth that you see in Chinese cities is not being evenly distributed. Rural China must be very poor indeed, as poor as India…maybe poorer. China’s dazzling cities and expensive malls (they sold the same international brands available in India at a 15-20 per cent higher price) are a clear indication that urban Chinese have more money than the urban Indians. But the disparity between the rich and the poor is almost three times greater than in India! China is growing at over 10 per cent, but presently at least they don’t seem to be taking the poor along. Maybe its temporary…because their growth has been far too fast, faster than India’s, and people haven’t caught up. Their one-child policy however could see them through. (Wiki: $PPP is calculated by the value of all final goods and services produced within a nation in a given year and dividing it by the average population of the same year).
In India we are burdened with a large and growing population. As a democratic nation we cannot adopt the harsh one-child policy of the Chinese government. Millions of our countrymen and women yet to be born are doomed to poverty. On the other hand, China plans to double its GDP and halve its population! Whew.
However, articles which suggest that India is leaving the poor out of the economic boom are true only to a limited extent. Our poverty line has decreased and a sizeable chunk of our poor have moved up the economic scale to become middle-class (300 million today). So even while poverty in our country needs to be alleviated, the fact is that we aren’t as badly off as many other countries. At least not when compared to a rapidly growing economy like China’s.
However, there are economists who suggest that the gap between the rich and the poor in India is widening…but Japan‘s example shows that it is possible to have a developed economy and keep the gap between the rich and the poor at a reasonable level.
The top 20 percent of the richest Japanese are only about 4.5 times richer than the bottom 10 per cent. And the $PPP in Japan is 33,100. A very high average income, but the distribution of income is more evenly spread out than in the US or the UK.
I am not an economist, but I cannot help but wish that we can go the Japanese way. Make our poor so rich that they have at least a quarter of the money that the rich have. Sounds like Utopia, but we can do it if we can overhaul our education system and control our population. Not tomorrow perhaps, but its a goal to aim for.
Related Reading: Lets make the poor richer instead of making the rich poorer
India to be fifth largest consumer market by 2025
Quality of education in India differs widely
India will eradicate poverty, although slowly
India to be number two economy world-wide by 2050