
Dr. Anantha, Chief Economic Adviser to Government of India Discusses Inequality Using PRICE Insights
In a recent panel discussion on "Inequality, Economic Growth, and Inclusion," organized by RIS and the Delhi School of Economics, Dr. V. Anantha Nageswaran, Chief Economic Adviser to the Government of India, highlighted key insights from PRICE research....
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In a recent panel discussion on "Inequality, Economic Growth, and Inclusion," organized by RIS and the Delhi School of Economics, Dr. V. Anantha Nageswaran, Chief Economic Adviser to the Government of India, highlighted key insights from PRICE research. This acknowledgment underscores the impact and relevance of PRICE data in shaping discussions around economic policy and addressing critical issues like inequality and inclusive growth.
He says, " In general, PRICE has done an extensive survey even during COVID times. And if you look at their own numbers or the headline that they gave, because this is not my headlines inside the image they tend to have this, in this particular table they have a very sensational headline.
In seven years the number of rich in the country increased by 500% while the number of poor decreased by only 58%. And you might immediately go away and you have a eye catching headline, TRP or click bait headlines. This is a wonderful number. And students of economics would know that you can make a line look steeper or flatter by varying the way in which you show the axis. So similarly if you look at it, the population that were poor in 2015-16 was 11.5 crores, it has come down to 6.7 crores. There is a decline of 4.8 crores of the poor. And the rich population is a small size of the population that went from 2.4 to 10.1.
Lower middle class declined and middle class went from 57.9 to 64.8. Upper middle class increased 15 crores, so 13.5 to 28.2. So there has been mobility across the income classes. That's what matters. Even though the statistics presented are there for us to interpret and in this below table, the gap between major religions also has come down from about 23 lakhs to just about 3 lakhs.
In terms of the gap in income on an annual basis. The post Covid recovery is more egalitarian because There is a 75% jump in the incomes of the poorest households post Covid compared to the increase in incomes of the richer deciles or quintiles of the population. As you can see here in the below infographic, the bottom 20% income, went up by 75% and the richest 20% income went up by 9.6%.
And if you look at the gini coefficient while it did increase between 2015-16 and 2021, the kind of income transfers and the free food programs and affordable housing programs et cetera have also brought down the Gini coefficient in India from 0.51 to 0.39. The bottom 10% actually went up whereas the top 10% came down between 2021 and 2023.
In terms of the profile of the consuming class you can see that the aspirations are 52% which is the middle class and then it's and whereas when it comes to income and expenditure the middle class still continue to dominate in terms of the profiles of consumption for 2021 which happens to be a Covid year.
So in other words as I said it is not the absolute levels that matter, it is the rate and the direction of change that matters. And post Covid, the rate at and the direction of change show that income for the lower two quintiles have done better than the incomes of the top quintile."