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Income disparities in India rise to record levels

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January 2007
Income disparities in India rise to record levels

As independent India's 60th anniversary approaches later this year, there will no doubt be much discussion about the nation's performance and prospects. It can scarcely be denied that impressive progress has been made in certain areas, especially since the 50th anniversary. To give two examples, the growth rate has averaged 8 percent over the past three years alone and the fertility rate has dropped below 2 percent.

Yet it's also true that the ongoing challenges are many more – a big one being the stark disparities which seem to be getting worse. The wealthiest 10 percent of India's population controls 52.9 percent of all assets, and according to Forbes magazine, 36 of the 40 richest Indians are billionaires. Mumbai-based Mukesh Ambani, the richest person in India, is now worth $18.5 billion, which is $11.5 billion more than what he had in 2004. His brother Anil, who comes in second, also lives in that city, which apparently has more millionaires than all the other Indian cities combined. In 2005 alone, the number of millionaires in Mumbai increased by 13,000. These changes have only highlighted the rising inequality found throughout the country.

Kerala, for instance, is known to be a relatively egalitarian state with high levels of literacy. But a new study shows that while the top 10 percent of the population there controls 41.2 percent of the total domestic income, the bottom 10 percent has just 1.3 percent. "In education and healthcare fields, too, where the state's achievements have been much talked about, there are glaring inequalities with only 7.5 percent of the youth from poor families fortunate enough to make their entry to colleges," notes The Hindu, adding, "The poorest among the population spend as much as 34.5 percent of their income on healthcare needs and this results in hunger and rising debt among them."


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