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    Per Capita Income 142nd Purchasing Power Parity 129th: Wealth Distribution in India

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    harishstud00
    There are vast disparities in wealth distribution in India. The top 1% of Indians hold 16% of the country's wealth, while the bottom 80% hold just 30% of wealth. Approximately 35% of Indians live on less than $1 per day. Poverty is highest in rural areas and often accompanied by illiteracy and poor health. However, overall poverty has declined and standards of living have improved, with literacy rates and life expectancy rising in recent decades. Continued economic growth is expected to further increase living standards across the population.

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    Per Capita Income 142nd Purchasing Power Parity 129th: Wealth Distribution in India

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    harishstud00
    74 views6 pages
    There are vast disparities in wealth distribution in India. The top 1% of Indians hold 16% of the country's wealth, while the bottom 80% hold just 30% of wealth. Approximately 35% of Indians live on less than $1 per day. Poverty is highest in rural areas and often accompanied by illiteracy and poor health. However, overall poverty has declined and standards of living have improved, with literacy rates and life expectancy rising in recent decades. Continued economic growth is expected to further increase living standards across the population.

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    India Wealth

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    There are vast disparities in wealth distribution in India. The top 1% of Indians hold 16% of the country's wealth, while the bottom 80% hold just 30% of wealth. Approximately 35% of Indians live on less than $1 per day. Poverty is highest in rural areas and often accompanied by illiteracy and poor health. However, overall poverty has declined and standards of living have improved, with literacy rates and life expectancy rising in recent decades. Continued economic growth is expected to further increase living standards across the population.

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    Attribution Non-Commercial (BY-NC)
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    74 views6 pages

    Per Capita Income 142nd Purchasing Power Parity 129th: Wealth Distribution in India

    Uploaded by

    harishstud00
    There are vast disparities in wealth distribution in India. The top 1% of Indians hold 16% of the country's wealth, while the bottom 80% hold just 30% of wealth. Approximately 35% of Indians live on less than $1 per day. Poverty is highest in rural areas and often accompanied by illiteracy and poor health. However, overall poverty has declined and standards of living have improved, with literacy rates and life expectancy rising in recent decades. Continued economic growth is expected to further increase living standards across the population.

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    Download as docx, pdf, or txt
    of 6

    There are 115,000 individuals in India with high net-worth.

    Since 2000, this elite group has


    grown an average of 11 per cent annually. Between 2006 and 2007, the number of wealthy
    individuals in India surged by 23 per cent, which is the highest growth rate in the world.

    "While the 'high class', which is ranked one level below the 'upper class' on the income and
    education scale, donates 2.1% to charity, the middle class gives 1.9% of household income to
    philanthropy," says Arpan Sheth, partner, Bain & Company. [42]

    The percentage of India's GDP that is spent for charitable purposes is only 0.6 where the
    percentage is 2.2 in the United States.

    WEALTH DISTRIBUTION IN INDIA


    Top 1%: 16% of wealth
    Despite its burgeoning economy, the gap between rich and Top 5%: 38% of wealth
    poor in India is vast. Top 10%: 53% of wealth
    Bottom 80%: 30% of wealth
    Bottom 50%: 8% of wealth
    About 35% of people live on less than US$1 a day. Poverty Bottom 20%: 1% of wealth
    is at its worst in rural areas and is often accompanied by Bottom 10% 0.2% of wealth
    high levels of illiteracy and poor health. Source: University of Western
    Ontario, 2006
    Nationally, almost half of children suffer from
    malnourishment, although infant mortality rates have
    declined. Almost 60% of people in towns and 20% in rural areas do not have access to
    proper sanitation.

    Despite such problems, India has seen overall poverty decline - a shift which has been
    accompanied by more general improvements to living standards.

    Life expectancy rose from 59 to 63 between 1990 and 2004. Adult literacy rose from 50%
    to 61% over the same period.

    It is suggested that continued economic growth will drive up living standards for the
    population as a whole.

    India’s wealth was $1.2 trillion, so wealth has grown by 192% over the last 10 years. In 2000,
    we had 1.03% of world wealth; in 2010 we have 1.82%

    India's per capita income (nominal) is $1016, ranked 142nd in the world, while its per capita
    purchasing power parity(PPP) of US$2,762 is ranked 129th.
    States of India have large disparities. One of the critical problems facing India's economy is the
    sharp and growing regional variations among India's different states and territories in terms of
    per capita income, poverty, availability of infrastructure and socio-economic development.
    Although income inequality in India is relatively small (Gini coefficient: 32.5 in year 1999-
    2000) it has been increasing of late. Wealth distribution in India is fairly uneven, with the top
    10% of income groups earning 33% of the income. Despite significant economic progress, a
    quarter of the nation's population earns less than the government-specified poverty threshold of
    $0.40/day. 27.5% of the population was living below the poverty line in 2004–2005.

    Between 1999 and 2008, the annualized growth rates for Maharashtra (9.0%) Gujarat (8.8%),
    Haryana (8.7%), or Delhi (7.4%) were much higher than for Bihar (5.1%), Uttar Pradesh (4.4%),
    or Madhya Pradesh (3.5%).

    According to a World Bank paper Development Policy Review, $1 a day poverty rates in rural
    Orissa (43%) and rural Bihar (40%) are some of the highest in the world. Seven low-income
    states - Bihar, Chhattisgarh, Jharkhand, Madhya Pradesh, Orissa, Rajasthan, and Uttar Pradesh -
    are home to more than half of India's population. Bihar's 80 million people are by far the poorest
    in India.

    On the other hand, rural Haryana (5.7%) and rural Punjab (2.4%) compare well with middle-
    income countries.

    The five-year plans have attempted to reduce regional disparities by encouraging industrial
    development in the interior regions, but industries still tend to concentrate around urban areas
    and port cities.After liberalization, the more advanced states are better placed to benefit from
    them, with infrastructure like well developed ports, urbanisation and an educated and skilled
    workforce which attract manufacturing and service sectors. The union and state governments of
    backward regions are trying to reduce the disparities by offering tax holidays, cheap land, etc.,
    and focusing more on sectors like tourism, which although being geographically and historically
    determined, can become a source of growth and is faster to develop than other sectors

    India has around 170,000

    NEW DELHI - India's robust economic growth is likely to drive the country's fortune to a whopping $6.4
    trillion in the next five years, reflecting a nearly two-fold jump from the country's current wealth, says a
    report.
    According to the Credit Suisse Global Wealth Report published for the first time, the total wealth of India
    has trebled in a decade to $3.5 trillion. By 2015, the country's wealth could nearly double to $6.4 trillion.
    Age distribution in household survey data by single-year age group and
    household wealth quintile, India

    Data source: India DHS 2005-06.

    GLOBAL WEALTH REPORT _31


    India
    Unlocking wealth
    Wealth in India has grown strongly over the past decade with
    wealth per adult more than doubling from USD 2000 in the
    year 2000 to USD 4900 in 2010. Given the 26% rise in adult
    population, aggregate wealth has grown by 204%. In US dollar
    terms, there was a significant contraction in 2008, although
    much of this was due to changes in the rupee exchange rate.
    When this is taken into account, wealth growth in India has
    been fairly steady.
    Along with most countries in the developing world, in India
    personal wealth is heavily skewed towards real property which
    makes up more than 90% of estimated household assets.
    Personal debts are recorded at only USD 212 per head.
    However it has been claimed that the large and well-
    established household survey on which the data for India are
    based suffers from significant under-reporting of debt.
    Relative to the rest of the world, the distribution of wealth in
    India is heavily biased towards the lower end, with the
    proportion of adults having wealth below USD 1000 roughly
    double the world figure. This reflects the fact that wealth has
    not grown equally for everyone in India, and that the country
    has persistent poverty. At the other end of the scale, a very
    small proportion of the population (just 0.4%) own assets
    whose value exceeds USD 100,000. While numbers at the top
    end are still small, they have been increasing fairly quickly in
    recent years, and the rate of increase can be expected to rise
    in the future if India’s economy continues to grow at its current
    rate.

    India: A Wealth Report


    Much has been written about the rising wealth and prosperity of Indians. All kinds of cliches are
    in use, devised by the likes of Thomas Friedman. But just how rich are the Indians today? What
    is the distribution of wealth in India among its 1.2 billion citizens? What is considered rich?
    What is the income range of middle class households? Here are some statistics from a recent
    survey that was written up in Open Magazine.

     "Rich" households
           $35,000+ per year: 1.3% (16 million people) 
     "Middle-class" households
          $8,000 to $35,000 per year: 13% (160 million)
     "Aspiring middle-class" households
          $3,500 to $8,000 per year: 30% (359 million)
     "Deprived" households
          Below $3,500 per year: 57% (684 million)

    I wish there had been another category of "Severely deprived" households comprising, say, the
    bottom 300 million people. I bet the household income there is below $800 per year (~$2/day).

    About 170,000 people, or 0.01%, have a net-worth over $1 million. Of these, 25 are dollar
    billionaires
    Following is the definition of Deprived, Aspirers, seekers and strivers(Taken from McKinsey & Company's article : Big
    Spender: India's middle class BusinessWeek By Diana Farrell and Eric Beinhocker)

    Deprived and Aspirers are almost 95% of the India's population and are considered as Aam Aadmi.

    Deprived - Household income less than Rs. 90,000


    Deprived include subsistence farmers and unskilled laborers who often struggle to find work. They are almost 54% of
    the population. Since 1985, the ranks of the deprived have fallen from 93 percent to 54 percent of the population.

    Aspirers - Household income between Rs. 90,000 to Rs, 200,000


    Aspirers are typically small shopkeepers, farmers with their own modest landholdings or semiskilled industrial and
    service workers. They are almost 41% of the population.

    The next 5%(approximately 50 million people include Seekers, Strivers and Rich)
    Seekers - Household income between Rs. 200,000 and Rs. 500,000
    Seekers range from young college graduates to mid-level government officials, traders and business people.They
    enjoy a lifestyle that most of the world would recognize as middle class and typically own a television, a refrigerator, a
    mobile phone and perhaps even a scooter or a car.

    Strivers- Household income between Rs. 500,000 and Rs. 1 million


    Strivers, the upper end of the middle class, tend to be senior government officials, managers of large businesses,
    professionals and rich farmer

    Rich Household income is greater than Rs. 1 million

    So, if you are Seekers, Strivers and call yourself Mr. Laxman's common man, then Think Again.

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