India is the second-most unequal economy in the world after Russia, according to a 2017 Oxfam report An Economy For The 99%. More sobering is the fact that even the people we might consider to be middle class in India are really quite poor.
According to a study by Pew Research Center, even though India’s poverty rate fell from 35% in 2001 to 20% in 2011, the population that could be considered middle income saw only a marginal increase, going from about 1% to just 3%. This means that instead of a swelling middle class, India saw a movement of its population from poor to low-income* earners.
The study pointed out that, “these were people hovering closer to $2 than $10 in daily income, and thus still away from the transition to middle-income status.” At that income threshold, a large proportion of Indians are at the edge of the global poverty line, possibly only one economic or health shock away from slipping back into poverty.
Where our efforts must lie
Given the sheer size of the problem, it would be infeasible for India to address this problem through transfers of wealth from the tiny sliver of high- and middle-income people (3% of the population) to the poor and low-income (97%). The focus of the effort must instead lie in improving the environmental constraints that keep people in poverty and strengthening the enablers that can allow them to take charge of their own lives. Some of these enablers would include access to good healthcare and associated financial protection, basic financial services, good pre-school education and nutrition support services, and agricultural productivity services. However, strengthening these enablers, while eminently feasible, will not be easy.
Let us take healthcare for mothers and babies as an example.
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