The average monthly per capita expenditure (MPCE) of the Indian farm household is a long way from Rs.15 lakh. And further from $115,000. It is, in fact, Rs.503. Not far above the rural poverty line. And that’s a national average, mixing both giant landlords and tiny landholders. It also includes States like Kerala where the average is nearly twice the national one. Remove Kerala and Punjab and the figure gets still more dismal. Of course, inequality is rife in urban India too. And growing. But the contrasts get more glaring when you look at rural India.
About 60 per cent of that Rs.503 is spent on food. Another 18 per cent on fuel, clothing, and footwear. Of the pathetic sum left over, the household spends on health twice what it does on education. That is Rs.34 and Rs.17. It seems unlikely that buying unique cellphone numbers is set to emerge a major hobby amongst rural Indians. There are countless households for whom that figure is not Rs.503, but Rs.225. There are whole States whose average falls below the poverty line. As for the landless, their hardships are appalling.
It is not that inequality is new or unknown to us. What makes the last 15 years different is the ruthlessness with which it has been engineered. The cynicism with which it has been constructed. And the scale on which it now exists. And that’s at all levels, even at the top. As Abhijit Banerjee and Thomas Piketty put it in a paper on “Top Indian Incomes 1956-2000,” “The rich (the top 1 per cent) substantially increased their share of total income [in the reform years]. However,
while in the 1980s the gains were shared by everyone in the top percentile, in the 1990s it was only those in the top 0.1 per cent who made big gains.”
“The average top 0.01 per cent income was about 150-200 times larger than the average income of the entire population during the 1950s. This went down to less than 50 times as large by the early 1980s. But went back to being 150-200 times larger during the late 1990s.” All the evidence suggests it has gotten worse since then.