Per Capita Income & Some Questions

 

The per capita income (pci) of India has risen by 6% from the last financial year.  It now stands at Rs 46492.  That means every one of the 1.17 billion Indians (man, woman, child) earns about Rs 3900 a month.  Assume that a family has at least three members including one child.  Then the monthly income of the family would be Rs 11700.  That is not a bad amount, is it?

But the pci doesn’t work that way, it seems.  The pci is quite like taking the average of the incomes of the Ambanis, for example, and a few beggars on the street.  The average is not a meaningful indicator of anything.

Wikipedia says, “If the distribution of income within a country is skewed, a small wealthy class can increase per capita income far above that of the majority of the population.” ( http://en.wikipedia.org/wiki/Per_capita_income)  That is exactly what has happened in India.  According to Michael Walton’s analysis, the private wealth of Indian billionaires rose from less than 1% of the country’s GDP in 1997 to more than 23% in 2008.

According to the United Nations Human Development Index released in Nov 2010, India ranks at 119.  The report says that 47% children under 5 in India suffer from severe to moderate malnutrition.  Nine out of ten pregnant women are anaemic.  Then there are the hungry millions. 

The Oxford Institute of Multi-Dimensional Poverty has pointed out that 8 of India’s most populous states fare worse than any Sub-Saharan African state on almost every human development index.

Yet the pci of India is rising!  Rising at a level that would mislead people into believing that India is all poised to be an economic superpower.   The bare fact is that only the rich are getting richer.  The poor are driven to suicide at the worst or subhuman living conditions at the least.

Bill Gates and Warren Buffet, two of America’s richest people, are planning to visit India soon with the hope of persuading their Indian counterparts to part with “at least half of their wealth” for the sake of the poor.  Will they succeed?  Are Indians generous that way?  If they are not, why not?  Why do Indians choose to plunder the public wealth by bribing politicians and bureaucrats rather than look after public welfare?

These are some questions to which I am still looking for answers.

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About matheikal

My more regular blog can be accessed at www.matheikal.blogspot.com
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4 Responses to Per Capita Income & Some Questions

  1. rahulsharma4 says:

    This is a true fact sir, the assumption of per capita income has to change then only we can get correct data.

  2. Raghuram Ekambaram says:

    You have to read to read up on two things to get really exercised about: one, Pareto Principle; two, Gini Index. The former says something like the top 20% will account for about 80% of something. By that score we are safe – the top 1% accounts for a MERE 23% and not 99% ;-). Our Gini Index, a level of inequality is on the increase and is showing no sign of letting up.

    Raghuram Ekambaram

  3. Pingback: Gujarat Model of Development « Matheikal's Blog

  4. Pingback: Reading List « Myth of Vibrant Gujarat

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