Economic Survey 2014: Poverty, inequality fall but still a long way to go

The Economic Survey 2013-14 had mixed news as regards India’s performance in various socio-economic sectors. While poverty numbers and inequality ratios fell, India is still far behind several countries in indexes like schooling years and inclusion of women.

Here’s a breakdown of the numbers involved:

Poverty
India’s poverty ratio declined to 21.9 percent in 2011-12 from37.2 percent in 2004-05.

In absolute terms, the number of poor declined from 407.1 million (40.71 crores) in 2004-05 to 269.3 million (26.93 crores) in 2011-12 with an average annual decline of 2.2 percentage points during the period.

But India’s poor performance on various human development indexes has resulted in a fall in its UN HDI to136 (of the 186 countries) as against 134 (of 187 countries) as per the UN Human Development Report 2012.

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Life expectancy in India at birth was 65.8 year compared to 81.3 year in Norway, 73.7 year in China and 75.1 year in Sri Lanka as per HDR 2013. The Indian performance in mean years of schooling (4.4 years) is even below that of Bangladesh and Pakistan which have lower per capita incomes.

Social sector spending
Expenditure on social services by governments (centre and states) as a proportion of total expenditure increased from 23.8 percent in 2008-09 to 25.2 percent in 2013-14 (Budget Estimates). As a percentage of the Gross Domestic Product (GDP), expenditure on social services increased from 6.8 percent in 2008-09 to 7.2 percent in 2013-14 (Budget Estimates).

Expenditure on education has gone up from 2.9 percent in 2008-09 to 3.3 percent in 2013-14 (BE).

Expenditure on health is just 1.4 percent of GDP.

Inequality
This may be hard to believe but according to the Survey, ineqaulity hasdecreased as reflected in a 9.2 percent fall in its Gini coefficient from 36.8 during 2010-11 to 33.4 during 2011-12. The inequality between the top and bottom quintiles in India was lower than in a large number of countries both developed and developing countries.

The Gini Coefficient measures the deviation of distribution of income or consumption from a perfectly equally distribution among individuals within a country.

Employment
The young population that was approximately 58 percent in 2001 will increase to more than 64 percent in 2021, the Survey states. It recommends that the government take timely action to make people healthy, educated and adequately skilled.

During 2004-05 to 2011-12, compounded annual growth rate of employmentwas only 0.5 percent, compared with 2.8 percent during 1999-2000 to 2004-05.

India’s unemployment rate remained around 2 percent under usual status (principal+subsidary) and fell under CDS steeply from 8.2 percent in 2004-05 to 5.6 percent in 2011-12.