and they say Inflation is good...

Woke up on a lazy working day with a copy of mint in my hand and  eyes still half closed searching for my specs.. Much needed hike in diesel prices it reads and I thought,  finally the government seems to be waking.. the fiscal deficit might come slightly under control, might send a positive signal to the market..

After a few days I met Dinesh, a skilled painter with bony physique,  who was finishing the final coat of our drawing room ..how is it going I asked him and he looked too busy with his job not really interested in answering any thing. After 5 minutes he comes to me with his clothes spotted with drops of paint and shoulders drooping with the toil of the whole day work and explains, " the price for cooking gas has become 100 Rs/ kg now, price of wheat floor has increased by 5 Rs a kg. My room rent which I share with 3 other inmates has increased from Rs 1500 to 2000 , I am finding it very difficult to sustain here in this city, sending money back home seems to be impossible, I  don't know where to go and how to survive "

I thought to myself, " Dinesh's monthly earnings must be close to Rs 4000 as he was being paid 200 Rs a day by the contractor, All is not so well in India after all ".

Was the diesel price hike the only way to control fiscal deficit, why not put additional duty on the prices of diesel cars? Whenever I see people buying diesel cars the thought hits me, this car is going to consume gallons of fuel subsidized at the cost of people like Dinesh. the thought comes and go and I get busy in other consuming thoughts ..


 

The Rich India : Statistical Review

 I really wanted to know the statistics regarding poverty in India after writing the post Defining Poverty. The numbers were different on various websites. Than by collecting bits and pieces I tried to make the whole picture about the rich India somewhat clear. The data is consistent with World Bank estimates about the poverty in India. I have just defined poverty level as less than 2$/day which I believe is bare minimum to lead a life.

Here the pie chart clearly shows that nearly 80% of India is still poor earning less than 2$/day, The middle class is rising and constitutes nearly 19.61% of Indians and rich are less than 0.4% of the total population. I have defined middle class as people earning more than 2$/day.

To have a better view of the enormity of the situation, have a look at the assorted data in the below picture.

We have nearly 50 billionaires which keeps hitting the media headlines. We can boast of 170,000 dollar millionaires in India but the number is less than the number of dollar millionaires in Switzerland which has less than 1% of the population of India.

The news and views on India shining and becoming developed nation keep hitting the news channels. The rich and middle class Indians feels good to hear these views but we can not deny the real situation.


The numbers are improving, there are more people every day getting out of 2$/day benchmark and becoming the part of middle class but there is still a long way to go.

Defining Poverty

Poverty runs deep in India, to the extend that we start ignoring it.. the reason is very simple, we get use to it. From our childhood days we see so many destitute, beggars that we think that is the part of our life and ets just ignore it. This blog is not on it, it is about the definition of poverty ? Who do you call a poor ?

The country is full of brilliant souls and Politicians who don't really want India to show its poor face to the world. They try and show that the poverty in the country is coming down as it portrays the good image of  the country. They try and eliminate poverty by these three ways:

1. Development: Improve the image of the country by doing developmental work which have direct or indirect effect on alleviating poverty from the country. Lot of it is being done nowadays, some by the government and more by NGO's, external aids etc.

2. Eliminate the Poor: If you cant eliminate the poverty, can reduce the number by eliminating the poor population. Very difficult and barbaric option. The good thing is that no one can do it. Its just the natural calamities and disease in India which does it. The infant and maternal mortality amongst poor in the country is very high. So no action to reduce poverty in one way is like making the poor die by disease and illness.

3. Redefine Poverty: The easiest way out to show reduction in poverty is by changing the definition of poor. If you simply change the poverty line from 1.25$/day ( World Bank PPP number ) to Indian number of1 $/day, a lot of Indians crosses the BPL line overnight.


Some economist says that people earning less than 2$/ day should be classified as poor, others argue that less than a $ per day are poor. So their is no uniform definition of poverty in India.

The planning commission of India accepts that 37% of the Indian population is living below the poverty line as per the Tendulkar ( not Sachin ) committee report.  Arjun Sengupta report says that 77% of the people in India are living with less tha 0.5 $/day.

Whatever may be the exact proportion of poor in the country but even 37% number is quite a high number.