·
Income is
defined as household disposable income in a particular year. It consists of
earnings, self-employment and capital income and public cash transfers; income taxes
and social security contributions paid by households are deducted. The income
of the household is attributed to each of its members, with an adjustment to
reflect differences in needs for households of different sizes. For example, a
statistic may indicate that 70% of a country's income is controlled by 20% of
that country's residents
·
Income
inequality among individuals is measured here by four forms in India.
·
Inequality of income,
·
Inequality of consumption
expenditure,
·
Inequality of asset holding,
·
Regional Inequality.
·
Inequality of the distribution
of wealth and income refers to a situation in which small section of society
share large part of nation income whereas large sections of society are devoid
of income. There is an unequal distribution of income.
·
Inequality in consumption
expenditure refers to a situation in which a large percentage of total
consumption expenditure is incurred by a small percentage of population.
·
Inequality of consumption
expenditure shows that a large percentage of bottom population has to struggle
to survive, whereas a small percentage of top population enjoys a lavish
lifestyle.
·
Regional inequality refers to
inequality of growth process across various states in the country and different
regions with in a single state. Some states or regions are far more prosperous
than the others.
·
In India inequality of income is
calculated based on the data on consumption distribution (provided by NSSO) and
income tax data. To examine the distribution of income in India, a Committee
was appointed by the Government under the chairmanship of Prof. P.C.
Mahalanobis. The committee submitted the report in 1964. Besides this
Committee, National Council of Applied Economic Research (NCAER), Reserve Bank
of India, World Bank and many economists have undertaken important research
studies relating to distribution of income. However, these studies relate to
different periods of time, and are based on different methodologies. The
results of these studies are not strictly comparable. Higher Lorenz ratio or
Gini-coefficient points to a greater degree of inequality. Gini index in India
was 33.4 in 2011-12 which points to an alarming magnitude of inequality in
India.
·
Economic
disparity is easily visible in the country by the fact that 40-50% of the
populations in Bihar and Orissa live below the poverty line while states such
as Delhi and Punjab exhibit very low poverty ratios
·
There are in
total 7 states of India which are lagging behind in the race of economic growth
namely Bihar, Chhattisgarh, Jharkhand, Madhya Pradesh, Orissa, Rajasthan, and
Uttar Pradesh.
·
Annual growth
rates of different states between 1999 and 2008 strongly reveals economic
disparities in the country as per the data Gujarat (8.8%), Haryana (8.7%), or
Delhi (7.4%) were much ahead in the race as compared to Bihar (5.1%),
Uttar Pradesh (4.4%), or Madhya Pradesh (3.5%).
·
Economic
disparity in India can be compared by the fact that growth rates of the states of
the single country varies to the greater extent. Rural Orissa (43%) and rural
Bihar (40%) stands in the list of states with the poorest growth rates in the
world while rural areas of other states of the same country India, lies well
among the middle-income countries as rural Haryana (5.7%) and rural Punjab
(2.4%).
·
Though the
Indian Govt. is constantly trying to improve the economic status of different
states by implying different policies and programs yet the issue is of major
concern. The five-year plans introduced by the Indian Govt. have proved to be
useful in reducing regional disparities.
·
Government
Policy to Reduce Inequalities of Income and Wealth
·
Ever since independence,
Government has been focused on reduction of inequalities of income and wealth
in the country.
·
Land
Reforms Land reforms have been introduced to remove
inequality in the ownership of land. Land in excess of the ceiling limit has
been distributed among the tenant farmers, and among the small and marginal
holders.
·
Expansion
of Public Sector Government pursued a policy of
assigning a ‘flagship-role’ to the Public Sector. Many commercial banks were nationalized
in 1966-68. However, since 1991, there has been reversal of the government
policy.
·
Privatization
has become the centre stage of growth-strategy. This is because public sector
has only yielded inefficiency and bankruptcy.
·
Encouraging
Small Scale Industry The Government is providing
support to develop small scale industry and MSME sector through various credit
support and tax exemptions.
·
Monopolies
and Restrictive Trade Practices Act Monopolies and
Restrictive Trade Practices Act, 1969 was passed to put a check on
concentration of economic power.
·
Poverty
Alleviation Programmes Government should frame poverty
alleviation programmes particularly those which provide gainful employment to
the economically weaker section of the society.
·
Pricing
Policies Government should design the pricing and
distribution policies to reduce the inequalities present in the society.
Government should provide the basic amenities at lower price to the weaker
sections of the society.
·
The International Monetary Fund’s most recent
report on the Asia-Pacific region confirms what we all know India is a highly
unequal society
·
India not only has one of the highest levels
of inequality in the region, but it also shows very large increases in
inequality since 1990 Its net Gini index of inequality (based on income net of
taxes and transfers) rose from 45.18 in 1990 to 51.36 in 2013. Only two countries
in the Asia-Pacific region Papua New Guinea and China are more unequal. Indeed,
the net Gini coefficient in India is much higher than the average of 43.69 for
Latin America, long excoriated as one of the most unequal regions in the world.
·
India has made great strides in reducing
poverty, thanks to high growth. The chart shows the percentage of the
population below the poverty line of $2 per day in 2011 purchasing power parity
terms. But note that the rural areas of China, Vietnam and Indonesia all started
with higher poverty levels than India in 1990 and have been able to do better
than India in reducing poverty. A more equitable distribution in the gains from
growth would have helped lower poverty further.
·
One of the main reasons for India’s lack of productivity
is the high proportion of its population in informal employment. India’s share
of 83.6% is much higher than those of China, Thailand and even the Philippines.
“Reducing labour market duality and informality, while putting in place
well-designed labour market policies to boost job creation, can reduce income
inequality,” says the IMF report.
·
The reasons for high income inequality include
disproportionate returns to education for the well-off, the capture of
subsidies by the rich and the rural-urban income gap, apart from the initial
heavily skewed distribution of wealth.
·
India’s richest people accounts for 45% of
aggregate household disposable income while the poorest people earns barely 7%
of the aggregate income.
·
The NSSO survey results show that households
in the top quintile earn nearly four times as much as households in the bottom
quintile. But given that poorer households also tend to be bigger, the
difference in per capita incomes is greater. The per capita income of the top
quintile, at Rs7,974 per month, is nearly 6.5 times that of the bottom
quintile. Given the lower income and the bigger household size, poorer
households end up spending most of what they earn. The poorest quintile is able
to save just 10% of household earnings. In contrast, the top quintile is able
to save 47% of household earnings
·
While the NSSO surveyed 101,651 households of
which 41,968 (41.3%) were urban households, the ICE 360° survey covered 61,000
households of which 36,000 (59%) were urban households. However, the rural
sample of the ICE 360° survey is less than half of the NSSO sample.
Nonetheless, all the estimates of each region have been derived by adjusting
for the respective population of those regions.
·
One of the most attractive features of the
survey is that it is representative at the level of economic clusters. Urban
India has been divided into four clusters:
·
metros (population of more than five million),
·
boom towns (2.5-5 million),
·
niche cities (1-2.5 million) and
·
other urban towns (less than one million).
·
Based on a district development index, rural
India has also been sliced up into three different clusters: “developed rural”,
“emerging rural”, and “underdeveloped rural”.
·
The first category includes districts such as
Bathinda (Punjab) and Kangra (Himachal Pradesh). The second category includes
districts such as Latur (Maharashtra) and Kamrup (Assam) while the last
category includes districts such as Kalahandi (Odisha) and Bastar
(Chhattisgarh).
·
·
The
average income of households living in metros, at Rs29,690, is two-and-a-half
times the average income of households living in underdeveloped rural areas.
The average consumption expenditure of households living in metros, at
Rs17,641, is roughly two times the average consumption expenditure of
households living in underdeveloped rural areas.
·
Interestingly,
the average income and average consumption expenditure of households in
developed rural areas is roughly equal to that of households living in niche
cities, shows the survey.
·
The
survey underlines the profound influence of education on household earnings.
While there are illiterates across all income quintiles, on average, the better
educated the chief wage earner is, the better-off is the household. For
instance, households with a matriculate breadwinner earn Rs20,064 a month, 39%
higher than households where the chief wage earner has a primary school
education. Similarly, households where the chief wage earner is a graduate
earned 34% more than households where the breadwinner has just cleared 10+2.
·
Not
only are those at the bottom of the income distribution poorly educated, even
those in the middle of India’s income distribution have very little schooling,
suggests the survey. It shows that “Middle India” (those located between the
20th and 80th percentiles of income distribution) is largely composed of those
who lack a high-school education. Households with an illiterate breadwinner
constitute 25% of Middle India, while 47% of households in Middle India are
those where the breadwinner has just completed primary schooling. The average
household income of Middle India is Rs13,636, of which 74% is spent on routine
consumption expenses. The largest section of Middle India (37%) lives in
underdeveloped rural areas.
·
Only
a small fraction of middle India (6%) lives in the metros.
·
·
According to
various surveys, the pay gap is estimated to vary anywhere between 19% and 27%.
But on a closer look, the difference is far less, finds a recent global report.
·
Indian men,
overall, earn an average 18.8% more than women. But on comparing the salaries
of men with women at the same job level, the same company and in the same
function, the study shows that men earn only 3.5% more than women.
·
The global study
analysed gender and pay of about eight million employees in 33 countries,
including 57,000 employees in India.
·
So just where is
that huge pay gap coming from then?
·
It exists partly
because there are fewer women in better paying job functions and industries
such as science, technology, engineering—all of which pay above average, and
are very male-dominated.
·
Lesser-paying
sectors such as hospitality and tourism are women-dominated. This pushes the
overall average male salary above the average female salary, resulting in a
wide average pay gap, said Frost.
·
“Getting more
women into these higher-paying functions and industries will push up average
female salaries, and help to close the overall pay gap,”
·
The other reason
is also the lack of women in senior functions and in leadership positions.
·
Globally, Hay
Group’s research found that women make up 40% of the workforce for clerical
jobs, but only account for 27% of manager roles and 17% of executive-level
jobs.
·
In India, that number
is worse—only 10% of managers are women and 5% of women hold executive-level
jobs.
·
But it is also
important to note that the study considered only the base salaries when
comparing the pay of men and women.
·
Experts, believe
that not including variable pay does not give the complete picture as variable
pay accounts for a significant part of the compensation.
·
Job site
Monster.com released a report that said the gender pay gap varies as much as
34.9% in the manufacturing sector to 17.7% in the banking, finance and
insurance sector.
·
In India, women
account for only 23-24% of the total labour force and generate a mere 17% of
the share of the gross domestic product (GDP), a 2015 McKinsey Global Institute
study found.
·
This figure is
far below the global average, where female workers generate 37% of the world’s
GDP.
·
Several development
paradigms, including the Millennium Development Goals(MDGs) and the more recent
Sustainable Development Goals(SDGs), emphasize reduction of poverty in all its
dimensions. Poverty alleviation continued to be the central objective of state
and central government initiatives. While poverty has been interpreted and
measured by experts in several methods, various dimensions of poverty have been
discussed in the recent past. Broadly, poverty is a state where a person is
unable to maintain a minimum socially accepted level of standard of living.
·
Several Committees and
expert groups have studied the poverty measurement methodologies in the past.
The recent expert group under the Chairmanship of Prof. Suresh D. Tendulkar
recommended using poverty lines which are substantially higher than earlier
ones. As per the latest estimates of the Planning Commission released in July
2013 for the year 2011-12, the poverty ratios for rural and urban areas of
united Andhra Pradesh were 10.96% and 5.81% respectively and combined ratio
stands at 9.20%. The corresponding figures for All India during the same period
were 25.70%, 13.70% for rural and urban areas and the combined was 21.92%.
·
Andhra Pradesh enjoys the
legacy for introducing and implementing innovative poverty alleviation
programmes. Apart from general economic policies, targeted poverty alleviation
programmes for women’s empowerment, providing housing and other infrastructure
like pensions, land distribution and health insurance helping the poor in
various dimensions. Increasing budgetary allocations, improving delivery
systems in poverty alleviation programs and effective monitoring can help
reduce severity of poverty.
·
NITI Aayog has categorized
the states into five classes based on their relative poverty head count
positions in 2011-12 with scales of <10%, 10-20%, 20-30%, 30-40% and 40%.
Andhra Pradesh in terms of urban poverty is placed in the range of where as in
rural it is in 10-20%.
·
The Labour Force
Participation Rate (LFPR) is defined as the number of persons in the labour
force per 1000 persons. Labour Force Participation rates for both rural and
urban areas in Andhra Pradesh were higher compared with all India levels.
·
The number of persons
employed per 1000 persons is known as Work Force Participation rate (WFPR). The
work force participation rate per 1000 persons is based on current daily
status.
·
The National Sample Survey
Office (NSSO) provides Unemployment estimates on the basis of the Quinquennial
surveys. Persons are considered unemployed, if he/she was not working, but was
available for work for a relatively long time during the reference period.
·
Unemployment rate is
defined as the number of persons unemployed per 1000 persons in the labour
force. This in effect gives the unutilized portion of labour force. It is a
more refined indicator of unemployment in population than the proportion of unemployed,
which is nearly the number of unemployed per 1000 persons in the population as
a whole.
·
After an initial rise in
the rural and urban unemployment rates between 1993-94 to 1999-2000 in Andhra
Pradesh, there has been considerable moderation in the rural and urban
unemployment rates from 1999-2000 to 2004-05. However, while in urban areas
declining unemployment trend continued till 2009-10, it again went up by
2011-12. The rural unemployment increased quite alarmingly during the period
2004-05 to 2009-10 and remained at the same higher level in 2011-12.
·
The Andhra Pradesh State
Skill Development Corporation (APSSDC) is an implementing arm of Skill
Development entrepreneurship and Innovation department. APSSDC was set up to
skill 2 crore people in Andhra Pradesh in next 10 – 15 years with a vision to
be the best state in India and to be competing with the best in the world by
2022, when India celebrates its 75th year of Independence and to achieve status
of fully developed state. The mission of the department is to skill 20 million
people in 15 years by meeting skilled human power demands of all missions and
shape Andhra Pradesh as a skilled workforce and knowledge hub for the world.
The role of the Skill development department is to bring in expertise, training
of trainers, legislation / policy, rope in placement/ staffing agencies,
explore opportunities outside state/country, coordinate with NSDC/GoI,
comprehensive portal, CSS funds, coordinate / support skill requirements of 7
Missions, establish state chapter of sector skill councils. In the set up phase
it has been planned for scaling up of operations process and procedures, pilot
studies for new innovative programmes, kick start training programmes and
running existing ones. In the growth phase, scaling up and improving efficiency
of existing programmes and implementing new innovative programmes out of the
pilots are being aimed. Thus target from 2015-16 to 2019-2020 is projected at
50 lakh at the rate of 10 lakh per year and 2 crore in fifteen year target i.e.
by the year 2039.
·
A committee with District
Collector, DRDA, APSSDC, EGMM, CSR, Vice Chancellors, industries, private etc.,
has been constituted and the functions of committee is to prepare district
action plan, coordinate training programs, identify and provide idle
infrastructure, 500/1000 capacity centre under PMKVY, coordinate requirements
of local Industries, operationalisation of YTCs and other training spaces. APSSDC
central campus, integrated school (with vocational skills), Skill development
university, training of trainer institute (with residential
facilities),manufacturing and R&D setup, industrial centres of excellence,
entrepreneurship and incubation facilities, residential campus with capacity to
host 20,000 trainees, land-intensive training programs, industrial consortiums
and state-of-art sector skill councils.
·
The Skill development
mission also has linkage with Mission coordinators/constituent departments and
nominate a coordinator, articulate demand for skilled workforce, earmark a
portion of the budget for skilling activities. A ‘career counselling helpline’
is being launched as a statewise service. This call centre is planned at
Parivartan bhavan, Guntur district and APSSDC has tied up with Nirmaan vidya
helpline for this service. Udyog ratham is a mobile van planned and is a unique
and easily accessible mode for candidates to register for job and skill
training and for employers to offer jobs.
·
The activities managed by
the skill development mission are:
·
Siemens centres:
•
There is big gap in
employability levels of engineers and diploma holders due to less exposure to
hi-end, industryrelevant technology.
•
Focus on automotive, heavy
engineering, aerospace, energy, naval and other manufacturing sectors.
•
Unique Hub & Spoke
cluster model with plan for 6 clusters in the state, with total 36 centres
•
Each geographic and
industrial region is being covered and placement opportunities are available
across the globe. These centres are to be operationalised by April 2016
·
ESDM – DEITY - APSSDC has
been designated as the State Implementing Agency (SIA) for the skill training
in the ‘Electronics System Design and Manufacturing (ESDM) sector, a scheme of
department of Electronics and IT, Govt of India. 23 training partners have been
selected with 14 job roles under this scheme by APSSDC with an initial target
of around 1500 youth.
·
IT
– Sector - MoU signed with NASSCOM for launching courses
in ‘Cyber Security’ and ‘Data Analytics’, MoT program for the faculty members
of 35 universities/colleges are under progress. Tribal Welfare Department MoU signed with Tribal welfare
department to train tribal youth in “18” youth training centres (YTCs),
conducted “Bhavitha” program and mobilised around 2500 youth.
·
Jain
Irrigation - Drip irrigation service and maintenance
entrepreneur being developed
·
UN
Women - Training housemaids for overseas
placement. ToT organized logistic sector skill council - logistic trainings -
skilling activities in the ports, airport terminals, warehouses, capital region
project etc
