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India's income inequality doubles in 20 years: OECD

Dec 07, 2011

Inequality in earnings has doubled in India over the last two decades, making it the worst performer among all emerging economies, says a new OECD report. It also says that 42% of Indians live below the poverty line, as against the official figure of 37%.

The Organisation for Economic Cooperation and Development (OECD) says the top 10% of wage-earners make 12 times more than the bottom 10%, compared to six times 20 years ago.

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The OECD says India has the highest number of poor in the world.

Some 42% of its 1.21 billion people live on less than $1.25 a day.

Poverty line

"Brazil, Indonesia and, on some indicators, Argentina have recorded significant progress in reducing inequality over the past 20 years," the report, entitled Divided We Stand: Why Inequality Keeps Rising, says.

"By contrast, China, India, the Russian Federation and South Africa have all become less equal over time."
In India, the report says, the ratio between the top and the bottom wage-earners has doubled since the early 1990s.

India has also not fared well in poverty reduction, the report says.

It says 42% of Indians live below the poverty line, as against the official Indian figure of 37%.

The Paris-based OECD is a grouping of 34 advanced and emerging economies.

Recently, the Indian government was criticised for saying that an individual income of 25 rupees (52 US cents) a day would help provide for adequate "private expenditure on food, education and health" in villages.

In cities, it said, individual earnings of 32 rupees a day (66 US cents) were adequate.

Many experts said the income limit to define the poor was too low and aimed at artificially reducing the number of people below the poverty line.

A World Bank report in May said attempts by the Indian government to combat poverty were not working.

It said aid programmes were beset by corruption, bad administration and under-payments.

Source : BBC
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