Open Forum

New Delhi, 12 November 2013

Rich-Poor Divide

WIDENING DISPARITY UNCHECKED

By Dhurjati Mukherjee

The festival of democracy is in full swing. Political parties and their candidates are all out promising the moon to the people in the five State elections. But none has taken into account or addressed the biggest problem faced by the electorate—the widening disparity between sections of the populace as also between cities and rural areas and between organized and unorganized workers. This obviously does not augur well for a country where balanced and sustained development has been emphasized over the years. The growing imbalance has a very negative effect which hampers healthy societal growth and development, in the true sense of the term.

A recent global wealth and investment report pointed out that India recorded the second highest increase in high net worth individuals HNIs – those having investable assets worth over $1 million – in the world. It went up to 22.2 per cent in 2012 while their wealth grew by 23.4 per cent. As against 84,000 HNIs in 2008 and 125,000 in 2011, the country was home to 153,000 HNIs in 2012. Other reports were more or less similar as regards India was concerned.

The Capgemini and RBC Wealth Management 2013 World Wealth Report (WWR) found the country’s reform measures and monetary easing helped the rich in amassing wealth which, in turn, boosted equity markets gain 23.9 per cent. Most of the investments were concentrated in the real estate followed by cash and deposits, equities and alternate investments.

Importantly, the World Wealth Report 2013 prepared by Swiss bank, Credit Suisse, revealed that inequality among people and countries may be at its zenith. Two-thirds of adults in the world have wealth below $10,000 which is a mere 3 per cent of global wealth while the 32 million dollar millionaires – 0.7 per cent of the world’s adults -- own 41 per cent of all assets. 

The bottom 70 per cent of India’s households own only about 20 per cent of the country’s private wealth, whereas in China it is slightly higher at 29 per cent of such wealth being held by the bottom 70 per cent. The disparity is widening and creating spasms in the country, thereby leading to social and economic tensions between States and also between people of different regions within the States.   

The concentration of wealth in a few hands is no indicator of a country’s development or progress in any way. True development means there is a fundamental uplift of the livelihood conditions of the masses which, unfortunately, has not taken place in the country in spite of the so-called progress.

While the rich have become more and more prosperous, the 2013 Global Hunger Index report, brought out by the International Food Policy Research Institute (IFPRI), released recently (on October 14) revealed that a quarter of the world’s hungry or 210 million are in India alone. The three indicators used are: one, the proportion of people who are undernourished, two, the proportion of children under five who are underweight and three, the mortality rate of children younger than five.

However, the report found there has been some marginal improvement as the country’s hunger index declined from 24 to 21 between 2003-07 and 2008-12. Similarly, the proportion of undernourished declined from 21 per cent to 17.5 per cent, the proportion of underweight children declined from 43.5 per cent to around 40 per cent and under five mortality from 7.5 per cent to about 6 per cent.

But other surveys indicated that the nutritional value of food consumed per person is on the wane, which undoubtedly is a distressing phenomenon. As per the National Sample Survey Organization (NSSO) data, between 2004-05 and 2009-10, the calorie intake per person per day dipped from 2047 to 2020 in rural areas and from 2020 to 1946 in urban areas. 

The two pictures of wealth accumulation and poverty present a shameful disparity of people amassing money, on the one hand, while a major section languishing in poverty and squalor, on the other. This trend has been manifest as issues like agriculture, public health, education and poverty eradication have been given a short shrift, exposing large sections of the population to disease, debt, suicide and starvation.

The politicians of the country have never bothered to analyze why in spite of innumerable programmes targeting the poor to alleviate poverty, there has been no perceptible change in the livelihood conditions of the people in general of the rural areas, specially in the backward districts/areas of the country. The answer to the ineffective implementation of these programmes remains a mystery and that State governments are primarily responsible for the pitiable state of affairs.

The result of this disparity has been increasing social tensions, communal violence and spread of hatred and jealousy among the masses. The politicians and also bureaucrats are not liked by the aam admi, who feels deprived and cheated in various ways as he/she fails to get justice from the corrupt system.

In fact, there has been an “erosion of people’s faith in the Government” and the confidence in public institutions has declined. For example, while the Planning Commission has not been able to do anything tangible to ameliorate the conditions of the poor, it has become unnecessarily embroiled in the poverty line controversy. The integrity and professionalism of civil servants, including the police force, are being openly questioned. No doubt the system favours the rich and the powerful and the voice at the grassroots is rarely heard.    

What then needs to be done? It is indeed very difficult to come out with any ready solution but there has to be proper understanding of the situation by the planners and politicians. Development cannot be measured by the GDP growth rate but other parameters as well which should include the increase in income patterns of the poor, their food intake, health of children, water supply and sanitation coverage in rural areas etc. And to start with, the parameters have to be applied to say 50 to 80 backward districts of the country.    

The approach to development has to take a new approach. Real social development, as advocated by Mahatma Gandhi and many other political thinkers and development strategists, ought to rest on five pillars -- it ought to be indigenous, self-reliant, need-oriented, environment friendly and open to institutional change. To achieve this, it is necessary to empower the people and recognize the third sector, represented by the civil society, as a major emerging sector on the development scene. This sector should be instrumental in building public-private cooperation and explore the potential for mobilizing latent human and physical resources for local developmental projects, initiated and identified at the grass-root level, with people’s participation.

In recent times, eminent jurist V. R. Krishna Iyer aptly pointed out: “If our country cares for Gandhiji, if India lives in villages, if a billion Indians matter more than 23 billionaires (presently the number stands at over 40 or even more), a conceptual reversal of vision and values is necessary. I am not against industrialization as such but wealth multiplication in a few hands throwing voiceless as worthless commodities”. It needs to be emphasized that the proletariat must survive and flourish and cannot surrender to the syndrome of “proprietariat monopoly”.--- INFA

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