In UPA years, economic gap narrowed: World Bank report

  • Zia Haq, None, New Delhi
  • Updated: Jan 21, 2015 00:49 IST

Between 2004-2005 and 2009-2010 – the initial years of UPA rule – the gap between rich and poor shrunk appreciably, as 40% of the population experienced upward mobility, a World Bank reports on inequality in South Asia says.

Jobs and migration led the upsurge that particularly benefited disadvantaged groups, such as Scheduled Castes, Scheduled Tribes and Muslims, especially in terms of occupational mobility, the report says.

Upward mobility, which denotes an individual’s rise to the next level of income, in India and also Bangladesh was similar to that of the United States, the report adds.

The World Bank study split the Indian population into three groups – the poor, the vulnerable and the middle class – and compared households in these categories between 2004-2005 and 2009-2010.

There was “notable improvements” in mobility for Scheduled Castes, Scheduled Tribes and Other Backward Castes. A comparison in the report showed that, across generations, mobility among Muslims had been similar to that of higher-caste Hindus, whereas mobility among Scheduled Castes and Scheduled tribes and Other Backward Castes has become higher than that of higher-caste Hindus over time.

Over these years, the study found, some 15% of the total population or 40% of the poor in India moved above the poverty line. A sizeable portion of the poor and the vulnerable – over 9% of the total population or about 11% of the total poor and vulnerable combined – moved into the middle-class.

Yet, over 9% of the total population also slipped back into poverty, revealing the greater risks faced by the vulnerable and even the middle-class in India compared to other countries.

The report’s analysis found non-farm jobs to be one of the main drivers of upward mobility, especially in rural India. At the village level, the occupational shift from farm to non-farm employment lifted many out of poverty.

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