Perspectives on India’s riches

By Jyoti Mukhia
India is the country of two Indias: Shining India and Suffering India.
The Shining India:
India was positioned at 12th among the wealthiest nations by World Bank in 2005 based on the GDP, wealthier than Mexico, Russia and Australia but lagging behind China which was at 4th position.
According to recent Forbe’s list (2009) of Wealthiest people in the world, there are 23 billionaires in India with combined net worth of $99bn, surpassing former Asian leader Japan’s 27 billionaires with their total worth of $67bn. Out of top 100 billionaires India’s contribution is 6 billionaires whereas US has 36 top 100 billionaires. India ranks 7th in the number of dollar-billionaires, after America, Mexico, Sweden and Germany. Yet, we rank 134th in human development.
The news of the newly-minted Indian billionaires and the obscenity of riches of IPL are bringing sharper focus on the growing rich-poor gap in India. The list appearing in public domain through media regarding top 10 highest paid salaries CEOs, suggests that the number has increased both in size and numbers.[1] The list is being added by new debuts every year meaning thereby that more and more people of fat and vulgar salaries are being born in India.
On the one hand, 23 Indian billionaires constituted 25% of India’s GDP while on the other, 70% of Indians had to do with Rs 20 a day and a farmer commits suicide every 30 minutes, husband sells his wife in lieu of debt waiver from landlord.
The top 10 per cent of the richest Indians are 7.3 times richer than the poorest 10 per cent.[2] India, according to data from the CIA World Fact Book 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.[3] On the basis of the prosperity Index India is at 45th position out of 104 countries.[4]

India’s poverty Estimates:
Estimates for India indicate a continuing decline in poverty. The estimates suggest that the percentage of people living below $1.25 a day in 2005 (based on India’s PPP rate, works out to Rs 21.6 a day in urban areas and Rs 14.3 in rural areas in 2005) decreased from 60% in 1981 to 42% in 2005. Even at a dollar a day (Rs 17.2 in urban areas and Rs 11.4 in rural areas in 2005)[5] poverty declined from 42% to 24% over the same period. 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).
Although India has had significant success in reducing the number of the poorest of its poor - those living on less than a dollar a day – there are still a huge number of people living just above this line of deprivation. This is most evident when we study absolute numbers. The number of people living below a dollar a day is down from 296 million in 1981 to 267 million people in 2005. However, the number of poor below $1.25 a day has increased from 421 million in 1981 to 456 million in 2005. This the biggest challenge facing India today. This indicates that there are a large number of people living just above this line of deprivation (a dollar a day) and their numbers are not falling.[6]
Paradox: the suffering India
Despite the facts that there has been a decline in the incidence of poverty over the past two decades, and annual growth rates that cross eight percent, one in four persons in India still lives below the income poverty line. The health indicators and socio-economic indicators do not speak eulogy for us.
According to World Health Organization, about 49% of the World’s underweight children and 34% of the World’s stunted children and 46% of World’s wasted children live in India. India has the largest number of working children in the world, and accounts for 20% of the world’s out of school children. Girls’ life chances, in particular, are often severely limited, so much so that in some areas the number of girls has fallen to less than 800 per 1,000 boys. On contrary to this, about 83, 000 Indians have liquid assets more than 1 Million dollars. There are millions of people who own more than 5 palatial buildings whereas there are hundreds of thousands of people who sleep under sky.
There are still hundreds of villages and towns which are not electrified and connected with good roads. We use mineral waters in cities whereas; people in many rural areas do not have access to safe drinking water. There are millions of homeless people and Indira Awas Yojna, a flagship scheme for providing homes to BPL families is still to provide even the minimum space required homes to all eligible BPL families. On the other hand there are people who spend 700 crore on one building to live in.
Amartya Sen has rightly said that growth without democratic distribution brings no prosperity in the country, after all the ongoing financial crisis and global recession has been caused due to ‘privatizing profits and socializing losses’ and if we want to create sustainable social and economic order, we will have to distribute the profits also and not only losses.

[1] Persons like Mukesh Ambani who tops the list gets more than 44 crore (440 million) as annual salary, whereas as Pawan Kant Munjal of hero Honda gets more than Rs/-150 million per annum.
[2] 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.
[3] 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.
[4] Poor but rich - dnaindia.com A survey by Legatum Institute. The index looked at variable like democratic institutions, personal freedom and social capital.
[5] Economic and political weekly, October 2008
[6] ibid