Poverty levels: Government admits growth gains uneven

NEW DELHI: A day after government data tom-tommed sharp reduction in poverty levels, the Planning Commission released additional numbers revealing that the benefits of high economic growth have not trickled to the most disadvantaged.

The data based on the 66th consumption expenditure survey by the National Sample Survey Organisation (NSSO), released by the commission on Tuesday, showed that the pace of reduction in poverty has been the slowest in the bottom 15% of the population.

The ratio of per capita income between the top 15% and bottom 15% of the population has risen from 3.9 in 2004-05 to 5.8 in 2009-10 in rural areas, according to the data. In the urban areas, the ratio has gone up from 6.4 to 7.8, indicating that the inequality between the two groups is on the rise.

“It can be said that the benefits of high economic growth have not trickled down to the bottom 15% who are the most disadvantaged in the country,” said Planning Commission member Saumitra Chaudhuri, who led compilation of the poverty data. “They continue to be a concern.”

The commission had on Monday released poverty ratio for 2009-10 that showed an impressive decline of 7.3 percentage points from 37.2% in 2004-05 to 29.8% in 2009-10. Even in absolute terms, the number of poor in the country based on per capita expenditure came down by 15% from 407.2 million to 354.6 million.

The poverty line, adjusted for 2009-10 prices, stood at Rs 29 per day per capita expenditure for people in the urban areas and Rs 22 per day per person for population in the rural areas.

Independent analysts said while an increase in inequality was expected in a fast growing economy, the government now needs to take corrective measures to curtail the rising gap.

“It is not at all surprising as this has been happening in India for some time,” said Sonal Desai, economist at National Council of Applied Economic Research. “It is not desirable but it often happens in a growing economy that the people at the top benefit from the growth process at a much faster pace than those at the bottom.” Others are more critical and say the rising inequality will hamper political and economic stability.

“We should not be very happy about the decline in poverty ratio as those who were the poorest continue to be caught in a poverty trap,” said Himanshu, professor of economics at Jawaharlal Nehru University. “It is time to focus on correcting it or else it will lead to instability.”