Hindu Editorial Analysis 27th December 2017

Hindu Editorial Analysis 27th December 2017 - Dailygkaffairs


World Inequality Report 2018 :-

  • It has brought into focus an aspect of economic progress in India which depicts a continuous growth in inequality here since the mid-1980s.
  • The top 1% of income earners received 6% of the total income in the early 1980s, close to 15% of it in 2000, and receives 22% today

Comparison of economic progress made in India and China :-

  • Since 1980, the Chinese economy has grown 800% and India’s has grown 200% which is far lower than Chinese economy.
  • Inequality in China today is considerably lower than in India. The share of the top 1% of the Chinese population is 14% as opposed to the 22% reported for India.
  • They had both been large agrarian economies at similar levels of per capita income when they had started out in the early 1950s.

Growing inequality a sign of progress ?

  • Growing inequality need not necessarily accompany faster growth as inequality actually declined in China as compared to india from the early 21st century and reported economic growth higher than India & any other country.

Other indices also prove China’s success :-

  • The World Development Indicators data released by the World Bank show that per capita income in China was five times that of India in 2016
  • The percentage of the population living on less than $1.90 a day was about 10 times less at the beginning of this decade.

What is it that China did better than India?

  • Its leadership combined the drive for growth with the spreading of human capital. Human capital may be understood as a person’s endowment derived from education and robust health
  • China had by the early 1970’s achieved the level of schooling India did only by the early 21st century
  • The spread of health and education in that country enabled the Chinese economy to grow faster than India by exporting manufactures to the rest of the world. These goods may not have been the byword for quality but they were globally competitive, which made their domestic production viable
  • The resulting growth with achieved high level of schooling & spread of education & health lifted vast multitudes out of poverty
  • There is also a reason behind China Success is the greater participation of women in the workforce of China.

Is democracy pulling India behind?

  • India has lower per capita income, persistent poverty and by all accounts rising inequality. Therefore, Democracy per se cannot be held responsible for this
  • There are States in India with superior social indicators than China. This shows that democracy not a barrier to development
  • It also shows that similar political institution across India have not resulted in same development outcomes across its regions

Way forward :- 

  • There is need to spread health and education far more widely amidst the population. We now need to reorient public policy so that the government is more enabling of private entrepreneurship. This has to be done while being directly engaged in the equalisation of opportunity through a social policy that raises health and education levels at the bottom of the pyramid.


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