No land for the poor

The rich getting richer and the poor getting poorer is the long and the short of India’s economic growth story

Photo courtesy: Twitter
Photo courtesy: Twitter

NH Web Desk

The World Economic Forum’s (WEF’s) Inclusive Development Index (IDI) has come as a much-needed reality check for India and our chest-thumping BJP government. The most major power in South Asia lags behind its neighbours by quite a distance when it comes to inclusive economic growth. India’s rank is a dismal 62 out of 77 emerging economies.

Nepal is the best performer amongst all South Asian countries, coming in at the 22nd position in the list, followed by Bangladesh in the 34th slot. Sri Lanka comes in the 40th position and Pakistan ranks 47th.

The WEF report says the following on India. “The country performs best (44th) in terms of Intergenerational Equity and Sustainability, profiting from a low dependency ratio that is set to further decline as the economy reaps the dividends of an extremely young population (28% of the Indian population was younger than 14 years in 2017). Though the incidence of poverty has declined in India over the past five years, 6 out of 10 Indians still live on less than $3.20 per day. Given the prevalence of inequality both in terms of both income and wealth, there is substantial scope for improvement for India in this aspect. Both labor productivity and GDP per capita posted strong growth rates over the past five years, while employment growth has slowed.”

Although India’s per capita GDP is significantly higher than Nepal, Bangladesh and Pakistan, this is a clear indicator that the concentration of wealth in India is in much few¬er hands as compared to the three other countries. Sri Lanka, of course, has a much higher per capita GDP than India and the others.

This contention is corroborated by yet another study by international advocacy group Oxfam. The report titled ‘Reward Work, Not Wealth’ shows that one per cent of India’s people pocketed 73 per cent of the wealth generated in 2017 and 67 crore Indians saw their wealth rise by just 1 per cent in the same time period.

Nisha Agrawal, CEO of Oxfam India, said: “It is alarming that the benefits of economic growth in India continue to concentrate in fewer hands. The billionaire boom is not a sign of a thriving economy but a symptom of a failing economic system. Those working hard, growing food for the country, building infrastructure, working in factories are struggling to fund their child’s education, buy medicines for family members and manage two meals a day. The growing divide undermines democracy and promotes corruption and cronyism.”

The report added, “The number of billionaires increased by an unprecedented rate of one every two days in the 12 months between March 2016 and March 2017. Billionaire wealth has risen by an average of 13 per cent a year since 2010 – six times faster than the wages of ordinary workers, which have risen by a yearly average of just 2 per cent.”

In the last 12 months, the wealth of billionaires in India increased by Rs 20.913 lakh crore, the study found out. This amount is equivalent to the total budget of Central Government in 2017-18.

The report also found out that 84 per cent Indians agreed that the gap between the rich and poor in the country was way too big and 73 per cent wanted the Indian government to urgently address this difference in income between the rich and poor.

“People in India are ready for change. They want to see workers paid a living wage; they want corporations and the su¬perrich to pay more tax; they want women workers to enjoy the same rights as men; they want a limit on the power and the wealth which sits in the hands of so few. They want action towards an economy that works for all, development that uplift the billions and not the billionaires alone,” said Agrawal.

Earlier, the Global Nutrition Report 2017 had also shown India’s poor performance in tackling malnutrition. It had found out three important forms of malnutrition that was impeding India’s development. These were childhood stunting, anaemia in women of reproductive age, and overweight adult women.

As many as 38 per cent of India’s children under the age of five years were found to be suffering from stunting. Stunting occurs when children do not grow to heights they are sup¬posed to for the lack of nutrients. This often leads to physical weaknesses and permanent brain impairment.

More than half of Indian women of the child-bearing age were found in the report to be suffering from anaemia, a serious condition that can affect the health of both the mother and the child.

The Global Nutrition Report 2017 had called for nutrition to be placed at the heart of efforts to end poverty, fight disease, raise educational standards and tackle climate change.

“We know that a well-nourished child is one third more likely to escape poverty,” said Jessica Fanzo, Professor at Johns Hopkins University. “They will learn better in school, be healthier and grow into productive contributors to their economies. Good nutrition provides the brainpower, the ‘grey matter infrastructure’ to build the economies of the future,” said Fanzo, also the Global Nutrition Report Co-Chair.

But the WEF’s IDI report has come as the biggest embarrassment for India’s ruling establishment. When none other than Prime Minister Narendra Modi was waxing eloquent on the stage at Davos on the strides made by the country in his bid to woo global capital, this report published by the very platform has left the government with egg on its face. One just hopes the government wakes up to this reality and takes concrete action to address the inequality.

This will need structural changes in planning and political will to step up public spending in agriculture, public infrastructure, public health, education, sanitation, streamlining the PDS system, to name a few. With the government’s revenue collection not looking northwards, it is doubtful if this is possible even if political will exists for the same.

The Inclusive Development Index is an annual assessment by WEF of 103 countries’ economic performance that measures how countries perform on eleven dimensions of economic progress in addition to GDP. It has 3 pillars; growth and development; inclusion and; intergenera-tional equity – sustainable stewardship of natural and financial resources.

The IDI is a project of the World Economic Forum’s System Initiative on the Future of Economic Progress, which aims to inform and enable sustained and inclusive economic progress through deepened public-private cooperation through thought leadership and analysis, strategic dialogue and concrete cooperation, including by accelerating social impact through corporate action.

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