On 9/26/07, Venky <[EMAIL PROTECTED]> wrote: > > > Okay, so as expected, the gap is widening. Though, from what I > understand about Gini coefficients from Wikipedia, a country as > large as India with its economic diversity would end up > exaggerating the value. To quote Wikipedia -- "When measuring > its value for a large, economically diverse country, a much > higher coefficient than each of its regions has individually will > result." > > But, in any case, assuming that supply-side economics works, if > this ends up getting us closer to a place where most of the > "poor" have their own homes and mobile phones and > air-conditioning, is the income disparity all *that* bad?
All the data I've seen suggests that the within-state and between-state disparities are greater than the national aggregate. It's not just disparities that are widening, however. There are large groups of people - mostly rural and tribal - who have no way of engaging with the sectors of the economy that are growing, not even as beneficiaries of such trickle down benefits as exist. As terms of trade for their output worsen and/or demand for their skills disappears while costs of the goods/services they need to acquire from the industrial/service sectors increase, they are absolutely, not just relatively, worse off. This is manifested as farmers' suicides, child trafficking, starvation deaths, migration to urban areas - all of which have increased over the past 20 years and continue to do so at an accelerating rate. For these (approx.100 million) people, air-conditioning, phones, even homes are mythical beasts. Those I meet would gladly settle for one square meal a day and a somewhat permanent roof over their heads. > What really makes India different are: > > 1. the sheer numbers of people living in poverty. The percentages living > on > > less than USD 2 per day have declined by less than 10% from 89.6% to > > 79.9%over the same 20 year period. At > > 1.5 billion, that's about 1.2 billion. > > Not to dispute the fact there the majority of the Indian > population is extremely poor, but there has got to be a better > measure of this than one based on a foreign currency against > which the domestic currency fluctuates wildly, and this before we > throw inflation into the mix. I would assume proxy measures like > life expectancy and child mortality rates would work much better. > > A totally naive reading (in the economic sense) of the figures > above seems to indicate that, ignoring the effects of inflation, > 89.6% of the people used to live on less than 30 rupees a day 20 > years ago -- and now 79.9% of the people live on less than 90 > rupees a day. Have no idea how inflation would skew these > numbers but superficially, it looks like a decline of greater > than 10%. > > [Disclaimer: I am bandying about terms which I have a little more > than passing familiarity with. I'll be very glad if someone who > actually understands numbers can clear this up for me.] > > In any case, even accepting these figures at face-value, the poor > do seem to be getting richer - though at a slower pace than the > rest of the country -- which was the original point. I'm not sure what exchange rates you are working from. The US dollar is currently trading just below Rs 40 which is the level it was at in the early '90s. In any case, I should have specified that the percentages I quoted are World Bank stats based on constant 1993 rates. As far as non-currency based measures go, perhaps the fact that 46% (or over 200 million) children are officially reported as being malnourished in 2007 compared to 47% (a statistically insignificant difference) in 1997, tells the story.
