Rich getting richer? Hardly news in India

Latest World Wealth Report says India recorded second highest growth in its high net worth individuals in 2012. May be a bit reason for cheer but doesn’t add much to cut the overall gloom

srishti

Srishti Pandey | June 20, 2013



Amid reports of a slowing economy, depreciating rupee and weakening investor sentiment that has left everyone worrying about the direction in which the Indian economy is headed comes a report by a global consultancy, giving an interesting twist to the tale.

And what does it say? That the number of Indians joining the millionaire club is ballooning!

According to the World Wealth Report-2013, released by Capgemini and RBC Wealth, India recorded the second highest growth – 22.2 percent – in its high net worth individuals in 2012. The report attributes the growth to positive trends in equity market capitalisation, gross national income, consumption, and real estate.

Now, that is some reason to cheer, though only for some. Cut through the faff, and the report basically points out that the rich have become richer and the poor… well, no one is really talking about them, leave alone the report.

India has been grappling with the problem of income disparity for a long time now, since the 1980s to be precise. While income-generating activities have shifted from agriculture to the manufacturing and services sectors, the concentration of population continues to remain higher in the former.

Everybody spoke about the trickle-down effect wherein people at the top of the pyramid, as and when they made gains, would pass down the benefits.

However, that model has been a complete failure. Today, economists, consultancies, B-schools… basically everyone across the globe is trying hard to figure ways of hunting treasure at the bottom of the pyramid but not much has been achieved.

The recent concept of inclusive growth finds mention only in the speeches of politicos and in policy documents lying untouched in government offices. Work has begun at the grassroots level and some narrowing of the income gap has occurred but looking at the pace of progress, achieving an all-round inclusive growth still remains a distant reality.

The main reason for this lopsided growth is poor implementation of existing policies because the poor are considered merely liabilities and working for their uplift is only to check another box in the to-do list of our leaders. If a policy favouring the rich and super-rich is stalled, there is a total hullabaloo with representatives from various fields (corporate houses, industry bodies, etc) crying about their concerns and the noise generated is so loud that it is impossible to avoid. On the other hand, schemes for the poor take years for approval, and subsequently when they are given approval their implementation is a nightmare.

Another major problem is that these so-called pro-poor schemes aim at eradicating poverty as a quick-fix to flaunt better growth instead of focusing on measures that would have a positive impact in the long-term.

As long as the pyramid will exist (which is forever), disparities, too, will. Imperfections will always be there, the aim however should be to make them look as less ugly as possible.

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