Aug 7, 2013

Believe it or not, Mukesh Ambani and an average guard (including those posted outside his Mumbai home) fall in the top 5 per cent of the country !

My maid servant asked me the other day: “Sahib ji, TV news tells me those earning more than Rs 1000 a month are not poor. How can this be true? Although I am earning Rs 5000 every month working at your home, I mop up your floor and wash your dishes. If I was rich why should I be doing jhhadu-pochha? Kuchch karona Sahib ji. Aap bolo na…”   
  
Mohan used to be a helper in my office. He now works as a guard in the Delhi University. “Sir ji, I earn Rs 6000 every month. I have a wife and two children. I live in a one-room shanty accommodation in Kamla Nagar. I know how I am struggling to run my family. My wife suffers from asthama, and my younger son has a heart problem. If I didn’t have the BPL card, I couldn’t have got them a hospital treatment. They would have died by now. And look, this government tells me that I am not poor…”

While I was grappling with words to assuage their anger at a faulty poverty line being enacted every now and then, here comes another shocker. The National Sample Survey Organisation’s (NSSO) latest set of consumption expenditure data for 2011-12 tells us that if you live in a village and spend more than Rs 2,886 per month you are among the top 5 per cent of the country. For the urban areas, the cut-off limit is Rs 6,383 per month. That makes me as well as you, the reader, in the same category as Mukesh Ambani, Ratan Tata and Narayana Murthy. Time to celebrate, isn’t it?

However, both my housemaid and my helper have narrowly missed being in the top 5 per cent bracket of the country. But they surely can derive some console and of course a lot of happiness to know that they rub shoulders with the top 10 per cent of the country. According to NSSO, those spending Rs 2,296 in rural and Rs 4,610 in the urban areas fall in the top 10 per cent. And that makes me wonder, if a guard outside an office or a swanky home is amongst the top 10 per cent of India, then imagine the fate of the remaining 90 per cent of the population? In simple words, does it not mean that over 110-crore people out of a population of 125-crore in India are simply destitute? Does it not mean that the poverty line that has been worked out time and again is completely fallacious and meaningless? 

If a spending of Rs 96.2 in the rural areas and Rs 212.77 in the cities is what it takes to form the top 5 per cent of the country, then there is something glaringly missing in India’s growth story. The promise and excitement of being the second fastest growing major economy is simply an illusion of prosperity wherein a handful of people/families have amassed huge wealth. The average growth in income that India has witnessed means nothing considering the gigantic income inequality that prevails.

The NSSO’s consumption expenditure data only shows how wide the income gap is. With every passing year, we know the prevailing inequality is further widening. At this rate, probably India would put the US to shame where 400 individuals have amassed economic wealth equal to that of half the American population. In India, economic growth seems to be all about the ultra high net-worth individuals (HNIs) whose number has risen to 100,900 in 2012-13, and is expected to swell to 300,000 in another five years. Ultra high net-worth individuals are those who have amassed Rs 25-crore or more in past 10 years.

The more the accumulation of economic wealth with a handful of families, the more is the projection of rising average incomes and growing prosperity. 

Regardless of how strong the poor feel about the cruel joke being thrust upon them, there is excitement in the air. I mean in the air waves. For the past few days I have been hearing the TV anchors and the Congress spokespersons repeatedly emphasizing on the latest miracle that they claim has been achieved. Poverty has come down by 15 per cent in eight years, between 2004-05 and 2011-12.  Some have even demonstrated their height of insensitivity by claiming that a decent meal is possible in Re 1/5/12.

Past NSSO data shows that the percentage of population below the poverty line has come down from 37 per cent in 2004-05 to 21.9 per cent in 2011-12. Planning Commission has last year (in Mar 2012) announced that poverty percentage has come down by 7.3 per cent, which means from 37.2 per cent in 2004-05 to 29.8 per cent in 2009-2010. And now finally, the data for the eight years the UPA has remained in power shows a magical decline in poverty by 15 per cent.

Interestingly, the reduction in poverty is being flaunted at a time when the Planning Commission is still not sure about the new poverty line. And if my housemaid and helper have crossed the Rubicon of poverty to rub shoulders with the rich and mighty, it is time for a grand celebration. But before that, let's have a reality check. 


Remember the TV serial: "Mungeri Lal ke haseen sapne"

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