NEW DELHI (AlertNet) - Inequality in earnings has doubled in India over the last two decades, making it one of the worst performers in terms of salary disparities from all the emerging economies, the Times of India reported on Wednesday.
Aid workers say that despite doubling the size of its economy between 1990 and 2005, Asia's third largest economy has not yet been able to wipe out poverty and has largely failed to translate its economic success to benefit the grassroots poor.
According to a new report by the Organisation for Economic Cooperation and Development (OECD), the top ten percent of wage earners in India now make 12 times more than the bottom 10 percent.
“There is evidence of growing concentration of wealth among the elite,” said the report.
“The consumption of the top 20 percent of households grew at almost 3 percent per year in the 2000s as compared to 2 percent in the 1990s, while the growth in consumption of the bottom 20 percent of households remained unchanged at 1 percent a year.”
Wage inequality has fuelled more general inequality in the country, said the report, adding that India's Gini coefficient, the official measure of income inequality, has risen from 0.32 to 0.38, with 0 being the ideal score.
In the early 1990s, India’s income inequality was close to that of developed countries, but its performance has plummeted since then, bringing it closer to China on income inequalities than the developed world.
India spends less than 5 percent of its Gross Domestic Product (GDP) on social protection schemes compared to Brazil's more than 15 percent and its tax revenue as a proportion of GDP is under 20 percent -- the lowest of all emerging economies -- and just half that of developed countries, said the report.
South Africa is the only emerging economy with worse earnings inequality, but it has halved this number over the last decade, the report added.
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