Poverty is an age-old challenge in India. Poverty clubbed with income inequality makes the situation worse. India’s biggest challenge is not just poverty alleviation, but the eradication of this inequality. According to data, the richest 1% of India holds 53% of the country’s wealth. The top 10% control 76.3% of the total wealth.
The following data from wealth X and Swiss bank UBS will give a better insight. In 2015, the number of billionaires in India was more than those of Switzerland, Hong Kong, and France combined. At the same time, India is one of the poorest countries in the World. How is this possible? Let’s have a detailed look.
Want to know more on Financial Planning? We at IndianMoney.com will make it easy for you. Just give us a missed call on 022 6181 6111 to explore our unique Free Advisory Service. IndianMoney.com is not a seller of any financial products. We only provide FREE financial advice/education to ensure that you are not misguided while buying any kind of financial product.
India is the 7th largest country in the world. It is the second-most populous country after China. The population of India is 1.2 billion. India has witnessed a 10% growth each year, making it one of the largest economies of the World. The GDP of India in US dollars amounts to 1.644 Billion. But, only a small proportion of its population has benefitted from this.
See Also: Basics of Financial Planning
This is because the majority of the people in India are living in extreme poverty. If you consider the numbers, more than 800 million people In India are considered poor. Lack of employment or job opportunities in villages contributes to the rising poverty in the country. Women and children are the most affected by poverty. They are often deprived of their basic human needs. Poverty impacts the population in many ways. These are:
Malnutrition: India is one of the most malnourished countries in the World. More than 200 million people have no access to sufficient food. Out of this, 61 million are children.
Child labor: Although there are laws prohibiting child labor in India, up to 12.5 million children between the age of 5 and 14 are working in hazardous conditions according to official figures. This figure shoots up to 65 million children as per aid agencies. These children do not go to school and contribute to the livelihood of their families to survive against the problems of poverty.
See Also: Financial Planning for Youngsters
Lack of education: According to UNICEF 25% of children in India have no access to formal education. Lack of education deprives them of good jobs. This further adds to the existing poverty. More than boys, girls are deprived of this facility.
Child marriage: Even with strict laws, girls are married off before the legal age in most regions of the country. Girls who are children themselves become mothers and face a lot of health issues or even die during labor. Poverty hit lower-class parents have the misconception that marrying off girls financially secures their lives.
HIV/AIDS: Lack of education and lack of awareness have paved the way for the rising number of HIV infected patients in the country. Most of these are children living in slums without proper medication. According to figures, around 22 million Indians are infected by the HIV virus.
Inequality serves as a catalyst in this scenario of rising poverty. The rich get richer and the poor get poorer. This further widens the gap between the rich and the poor.
Inequality can be broadly classified into two categories: social inequality and economic inequality. Both have adverse effects on the growth of the economy. Economic inequality focuses on wealth inequality and income inequality. Income is the money received by an individual from all sources. Examples: salary, bonus, rent. Wealth means assets owned by an individual. Example: bonds, stocks, properties.
See Also: Why Women Need to do Financial Planning?
Figures clearly project that inequality in income is rising with time. When the country witnessed a rapid rise of billionaires in the last few years, the poorest sections of the society, comprising up to 67 crore citizens, had their wealth rise only by 1%.
This also means the working class is finding it difficult to fund children’s education, enjoy the quality of medical treatment, have proper daily meals, and financially secure their lives. They remain stuck in their respective position without a great life.
Inequality also has a state-level impact. According to studies, the per capita income across states is diverging. This means some states are developing at the expense of others. Policymakers must pay attention to this and take necessary action to propagate development in less developed regions.
How Indian government can solve this problem?
India is a vast and diverse land. Only nationwide policies and programs can be effective in solving this issue. The government must ensure that attention is paid to each section of society, and consider their views and opinions. A few tips to solve this issue are:
A country can be labeled as a developing or developed one, only when each section of society witnesses it. Parameters like standards of living, literacy level and health of citizens will automatically prosper when the economy prospers in the right way. Having a handful of billionaires is not enough for nationwide success and prosperity. The government at different levels must consider this as an alarming condition and take necessary steps.
You May Also Watch
Keep your Financial Cognizance up to date with IndianMoney App. Download NOW for simple tips & solutions for your financial wellbeing.
Have a complaint against any company? IndianMoney.com's complaint portal Iamcheated.com can help you resolve the issue. Just visit IamCheated.com and lodge your complaint. If you want to post a review on any company you can post it on Indianmoney.com review and complaint portal IamCheated.com.
Be Wise, Get Rich.
The research team at IndianMoney.com comprises of certified and experienced professionals who share the company's vision to make every Indian financially literate by equipping every Indian with right and unbiased advice. IndianMoney.com research team provides newsletters, articles, videos and FAQs on various financial products and concepts only to help you make wise financial decisions.
Subscribe to our Youtube Channel
This is to inform that Suvision Holdings Pvt Ltd ("IndianMoney.com") do not charge any fees/security deposit/advances towards outsourcing any of its activities. All stake holders are cautioned against any such fraud.