Income Growing, Country Suffering
ACCORDING to latest data on national income, per capita income grew to Rs. 46,492 in 2009-10 from Rs. 40,605 the previous year, an increase of 14.5%. At 2004-05 prices it stood at Rs. 33,731 compared to Rs. 31,801 in the previous year, an increase of about 6% It is no cause to cheer as, adjusting for the double digit rate of inflation (the inflation for food items being still higher) the paying capacity of Indians has literally gone down. How?
THE government released above data on Jan 31, 2011. The same day the statistics released by the consultancy firm McKinsey & Co show that the poor have become poorer while the rich became richer faster--the reason for increase in per capita income. McKinsey, in its 2007 report had predicted that the poorest families will decline in numbers from 101 million in 2005 to 92 million in 2010 (about 9%), but it has swollen to 110 million (up by about 11%) i.e. the company was wrong by 20% in its forecast.
THE two observations above make clear that the highly acclaimed growth of 8% in Indian economy is totally lopsided and all the flagship programmes of the government are far from yielding desired results.
ANOTHER study, Nielson study, on the same day has reported that the middle class has cut its expenses on entertainment and luxuries and is postponing its consumer purchases by half year to one year. The trend started showing in the last quarter of 2010 and is likely to continue.
THE government of Aam Aadmi has all the right to pat its back for economic growth, but at what cost, this is not the job of economist Prime Minister.
THE government released above data on Jan 31, 2011. The same day the statistics released by the consultancy firm McKinsey & Co show that the poor have become poorer while the rich became richer faster--the reason for increase in per capita income. McKinsey, in its 2007 report had predicted that the poorest families will decline in numbers from 101 million in 2005 to 92 million in 2010 (about 9%), but it has swollen to 110 million (up by about 11%) i.e. the company was wrong by 20% in its forecast.
THE two observations above make clear that the highly acclaimed growth of 8% in Indian economy is totally lopsided and all the flagship programmes of the government are far from yielding desired results.
ANOTHER study, Nielson study, on the same day has reported that the middle class has cut its expenses on entertainment and luxuries and is postponing its consumer purchases by half year to one year. The trend started showing in the last quarter of 2010 and is likely to continue.
THE government of Aam Aadmi has all the right to pat its back for economic growth, but at what cost, this is not the job of economist Prime Minister.
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