Inequalities Highest in Kashmir’
Srinagar: Inequalities between the poor and the rich are highest in Jammu and Kashmir even after two decades of economic liberalisation, broadly implying that poor people are getting poorer and rich are getting richer, according to a recent analysis undertaken by The Associated Chambers of Commerce and Industry of India (ASSOCHAM).
The average household monthly per capita consumption expenditure (MPCE) at current prices was deflated by consumer price index to arrive at a realistic measure of change in real economic well being of people across regions and classes.
The ASSOCHAM study confirms that growth rate of both average per capita expenditure and resultant demand increased during 2004-05 and 2009-10. But while the average per capita consumption expenditure remained unchanged for the poorest, 20 per cent people, the average household income of the richest 20 per cent increased by 7.7 per cent.
This broadly led to increased inequalities. On an average, a rural household in the richest 20 per cent category spent more than 258 per cent of what a household of similar size falling in the poorest 20 per cent category spent in 2004-05. This difference further increased to 286 per cent in 2009-10.
“The resultant market size of richer MPCE classes too increased at a relatively faster pace,” said ASSOCHAM secretary general D S Rawat. “While the size of consumer markets expanded at a healthy rate of 7.9 per cent, economic inequality further widened over these five years.”
The calculated gini coefficients for states indicate that income inequalities increased in Jammu and Kashmir by 7.37 per cent, Madhya Pradesh including Chattisgarh 4.96 per cent and Bihar including Jharkhand by 4.9 per cent.
At the same time, gini coefficient values indicate falling inequalities in Orissa by 5.75 per cent, Maharashtra 3.85 per cent, Haryana 2.36 per cent and West Bengal.
Rajasthan, Karnataka, northeastern states and union territories too have seen some fall in the degree of income inequalities.
“Along with achieving higher economic growth, more efforts need to be made to make it more inclusive,” said Rawat adding reducing income inequalities is necessary for accelerating economic and human development. State governments must play a major role in developing social sectors and critical infrastructure.