UPA rule sees inequality rising in 70% states
Narendra Modi-led Gujarat is among the states that have performed the best on this indicator
November 6, 2013
Last Updated at 00:50 IST
United Progressive Alliance (UPA) government might take the credit for the steepest decline in poverty
during its regime but what could puncture some of this is the increase
in inequality during this period. The Latest data obtained by Business
Standard show, between 2004-05 and 2011-12, inequality increased in at
least two-thirds of the country's 29 regions.
During this period, the poverty rate - the share of those living below the poverty line in the country's total population - declined to 21.9 per cent at the end of March 2012, down 15.3 percentage points from 37.2 per cent in 2004-05. But, inequality, computed in terms of the Gini coefficient, rose during the same period - from 0.27 to 0.28 in rural areas and from 0.35 to 0.37 in urban areas.
The coefficient ranges from zero to one, with zero representing perfect equality and one showing perfect inequality. So, higher is the coefficient, the more is inequality. And, this trend was seen in 21 of the states. (THE RICH-POOR DIVIDE)
Business Standard obtained these data in reply to one of its questions filed with the government under the Right to Information Act. Gini coefficient is a measure of statistical dispersion and has been derived from the National Sample Survey Organisation data on household consumption expenditure for 2011-12.
The data show that the rich-poor gap in 2011-12 was the widest ever in urban areas and at the highest level since 1993-94 in rural parts.
"If the Gini coefficient is rising, a poverty rate decline in the country is doubtful," said S R Hashim, former Planning Commission member. He said the index was a clear indicator that the rich were getting richer and the poor poorer. He added the estimation of poverty had become a complex phenomenon and needed to be looked at.
In urban parts of as many as seven states - Karnataka (0.41), Uttar Pradesh (0.40), Kerala (0.39), Chhattisgarh (0.39), Haryana (0.38), West Bengal (0.38) and Delhi (0.37) - the inequality level was more than even the national-level index. Of these, in 2004-05, Haryana and Uttar Pradesh had inequality levels below the all-India level.
In that year, inequality in both rural and urban Delhi was less than the national level. The inequality level rose in both urban and rural parts in 14 of the 29 regions, including Delhi, Mizoram, Rajasthan and Madhya Pradesh - four of the five places going for Assembly polls in November and December.
Gujarat - tagged one of the "less developing" states by a new development index suggested by a panel headed by (now RBI Governor) Raghuram Rajan - was one of the states that performed the best on this indicator. The Narendra Modi-led state was among the three (Andhra Pradesh and Sikkim being the other two) where the rich-poor gap shrank in both urban and rural areas.
However, Pronab Sen, chairman of the National Statistical Commission, said: "The coefficient is a measure of overall distribution but is also a relative index, unlike poverty. As a statistician, it matters less to me than the poverty numbers." He said this might be a result of rapid increase in overall income leading to rich getting richer, poor also gaining but the middle class losing out or remaining stagnant.
In rural areas, only three places have more inequality than the national number, including Kerala and Delhi, where the index stood at 0.38 and 0.35, respectively. Joining them in the list was Arunachal Pradesh (0.33). All of these states have entered the fray only in 2011-12.
In the states where inequality came down in 2011-12, the poverty rates also declined between 2004-05 and 2011-12. The rich-poor divide was the most evident in urban Karnataka and rural Kerala.
BALANCING ACT GONE AWRY?
* Wide divide: The rural-urban gap in 2011-12 was the widest ever. Of the 29 regions, inequality rose in rural areas in 21 and in urban parts in 20
* Worst show: During the year, the level of inequality was the highest in Karnataka's urban parts and rural areas of Kerala
* Best performers: Gujarat, Andhra and Sikkim were the only three states where inequality declined in both villages and cities
* Poll-bound states: Of the total, inequality in both villages and cities rose in 14 states, including poll-bound Delhi, Rajasthan, MP and Mizoram
* Direct correlation: The states where inequality fell also saw poverty rates declining between 2004-05 and 2011-12
* Urban phenomenon: Chhattisgarh, Haryana, Odisha, Maharashtra and West Bengal were the states where inequality rose in cities but not in villages
* Uneven villages: Bihar, Goa, Meghalaya, Punjab, Tamil Nadu and Tripura were the states where the rich-poor gap widened in rural parts but not urban areas
During this period, the poverty rate - the share of those living below the poverty line in the country's total population - declined to 21.9 per cent at the end of March 2012, down 15.3 percentage points from 37.2 per cent in 2004-05. But, inequality, computed in terms of the Gini coefficient, rose during the same period - from 0.27 to 0.28 in rural areas and from 0.35 to 0.37 in urban areas.
The coefficient ranges from zero to one, with zero representing perfect equality and one showing perfect inequality. So, higher is the coefficient, the more is inequality. And, this trend was seen in 21 of the states. (THE RICH-POOR DIVIDE)
Business Standard obtained these data in reply to one of its questions filed with the government under the Right to Information Act. Gini coefficient is a measure of statistical dispersion and has been derived from the National Sample Survey Organisation data on household consumption expenditure for 2011-12.
The data show that the rich-poor gap in 2011-12 was the widest ever in urban areas and at the highest level since 1993-94 in rural parts.
"If the Gini coefficient is rising, a poverty rate decline in the country is doubtful," said S R Hashim, former Planning Commission member. He said the index was a clear indicator that the rich were getting richer and the poor poorer. He added the estimation of poverty had become a complex phenomenon and needed to be looked at.
In urban parts of as many as seven states - Karnataka (0.41), Uttar Pradesh (0.40), Kerala (0.39), Chhattisgarh (0.39), Haryana (0.38), West Bengal (0.38) and Delhi (0.37) - the inequality level was more than even the national-level index. Of these, in 2004-05, Haryana and Uttar Pradesh had inequality levels below the all-India level.
In that year, inequality in both rural and urban Delhi was less than the national level. The inequality level rose in both urban and rural parts in 14 of the 29 regions, including Delhi, Mizoram, Rajasthan and Madhya Pradesh - four of the five places going for Assembly polls in November and December.
Gujarat - tagged one of the "less developing" states by a new development index suggested by a panel headed by (now RBI Governor) Raghuram Rajan - was one of the states that performed the best on this indicator. The Narendra Modi-led state was among the three (Andhra Pradesh and Sikkim being the other two) where the rich-poor gap shrank in both urban and rural areas.
However, Pronab Sen, chairman of the National Statistical Commission, said: "The coefficient is a measure of overall distribution but is also a relative index, unlike poverty. As a statistician, it matters less to me than the poverty numbers." He said this might be a result of rapid increase in overall income leading to rich getting richer, poor also gaining but the middle class losing out or remaining stagnant.
In rural areas, only three places have more inequality than the national number, including Kerala and Delhi, where the index stood at 0.38 and 0.35, respectively. Joining them in the list was Arunachal Pradesh (0.33). All of these states have entered the fray only in 2011-12.
In the states where inequality came down in 2011-12, the poverty rates also declined between 2004-05 and 2011-12. The rich-poor divide was the most evident in urban Karnataka and rural Kerala.
BALANCING ACT GONE AWRY?
* Wide divide: The rural-urban gap in 2011-12 was the widest ever. Of the 29 regions, inequality rose in rural areas in 21 and in urban parts in 20
* Worst show: During the year, the level of inequality was the highest in Karnataka's urban parts and rural areas of Kerala
* Best performers: Gujarat, Andhra and Sikkim were the only three states where inequality declined in both villages and cities
* Poll-bound states: Of the total, inequality in both villages and cities rose in 14 states, including poll-bound Delhi, Rajasthan, MP and Mizoram
* Direct correlation: The states where inequality fell also saw poverty rates declining between 2004-05 and 2011-12
* Urban phenomenon: Chhattisgarh, Haryana, Odisha, Maharashtra and West Bengal were the states where inequality rose in cities but not in villages
* Uneven villages: Bihar, Goa, Meghalaya, Punjab, Tamil Nadu and Tripura were the states where the rich-poor gap widened in rural parts but not urban areas
Source: http://www.business-standard.com/article/economy-policy/upa-rule-sees-inequality-rising-in-70-states-113110600030_1.html
