Close chasm of inequality to match per capita income rise
It is good to know that India’s per capita income doubled to Rs 1.72 lakh from Rs 86,647 in FY2015 when the current Narendra Modi government took charge. Though these figures, released by the National Statistical Office (NSO), are the nominal average annual income of an individual, not considering the impact of inflation, they show the country has registered significant economic growth. Even in real terms, taking constant prices, income has increased by 35 per cent from Rs 72,808 in 2014–15 to Rs 98,118 in 2022–23. The NSO data also shows a significant negative impact on individual incomes because of the lockdowns during the Covid period, when both nominal and real income dipped sharply. However, since April 2021, there has been a strong positive rebound.
Translating this into an annual snapshot, government policies and individual entrepreneurship have ensured the country’s per capita income in real terms has been growing at 5.6 per cent per annum. Policies encouraging financial inclusion, such as the distribution of free rations under the Right to the Food programme, and the cash transfer to farmers of Rs 6,000 a year under the PM-KISAN scheme, have had a positive impact. However, scratch the surface, and it will be seen that rising income levels are mostly restricted to the 10 per cent of the richest Indians. For those at the bottom of the pyramid, real incomes may have, in fact, been shrinking over the years.
The rising inequality is, therefore, a huge source of worry. A report released on January 16 this year by the charity Oxfam at Davos says between 2012 and 2021, 40 per cent of the wealth created in India has gone to just 1 per cent of the population, and only a mere 3 per cent of the wealth has accrued to the poorest 50 per cent. The report Survival of the Richest: The India story also says that while the total number of dollar billionaires in India increased from 102 in 2020 to 166 in 2022, the number of those who went to bed hungry increased to 350 million in 2022 from 190 million in 2018. Malnutrition continues to be a major cause of death among children, while the increasing rural-urban divide triggers mass migration from our villages to overcrowded cities. The government must therefore ensure justice through the redistribution of wealth and focus on raising the income levels of those being crushed by poverty at the end of the scale.