India’s rich, richer than the French. Its poor, much poorer
By Annie Banerji
As India’s politicians struggle to manage an outcry over the definition of poverty — does earning more than $0.65 a day really mean you are not poor? — a new report shows the country’s rich doing very nicely from fast economic growth.
Rubbing shoulders with Singapore and Hong Kong, India appears in the top five countries where the affluent now have more than $1 million investable assets on average, according to the Global Affluent Investor study conducted by research company TNS.
“India and China have already surpassed major European markets like Germany and France. It’s interesting to see that the entrepreneurial spirit of people in these markets is already paying off in terms of personal wealth,” Reg van Steen, Director of Business and Finance, TNS, said.
But the report points to an important difference between the emerging Asian powers and their Western peers — wealth distribution.
“While 27% of the US are affluent this falls to around 1% in India and China,” the report said. It defined households with more than $100,000 of investable assets as affluent.
It will take some time for the number of rich in India and China to catch up with the U.S. — where the report found 31 million affluent households, 10 times as many as India and China each have.
“It is necessary perhaps to think in a different way, and to see that a country like India, like Schrödinger’s cat, exists in at least two forms simultaneously: rich and poor,” wrote British historian Patrick French.
Poverty looms large over the majority of the 1.2 billion population of the world’s largest democracy, where hundreds of millions continue to live below the bread line.
A couple of weeks ago, the government was hit by a storm of criticism for setting the poverty line at 32 rupees ($0.65) per day. The benchmark — barely enough to buy a return ticket on New Delhi’s subway — is used to gauge who gets subsidies in a country where malnutrition rates in some states are worse than sub-Saharan Africa.
Outcry from the opposition, economists and the media forced the government to say the controversial rate would not be used to decide who has access to welfare programmes.
Two decades of fast growth have brought huge changes to India, but there are growing calls for the boom to be put to better use.
“While economic growth is an important boon for enhancing living conditions, its reach depends greatly on what we do with the fruits of growth,” economist and Nobel Laureate Amartya Sen wrote in an article in February.