Global reports are often academic exercises which don’t mean much if looked at in isolation. But if you take a bunch together, things begin to make sense. In the last one month there have been as many as five such reports – taken together they give us a composite picture about how much India is shining. And yes, also where we stand globally.
The first two are similar, but come from different sources – the World Wealth Report 2010 (WWR) from Capgemini and Merrill Lynch Global Wealth Management and the Global Wealth Report (GWR) from the Credit Suisse Research Institute. Both indicate how much India is growing and shining.
The WWR says the HNWI population in India grew 50.9% from 84,000 in 2008 to 126,700 in 2009. HNWIs are defined as those having investable assets of US$1 million or more, excluding primary residence, collectibles, consumables, and consumer durables. The world’s HNWI population grew by 17.1% during the period – meaning, the number of wealthy people in India grew at a much faster rate than the world average. The wealth of the HNWI population itself grew 53.8%, with resurgent stocks helping to drive the recovery. The highest in Asia-Pacific was Hongkong with 104.4%, China being slower than India at 31.0%. The wealthiest HNWI market is still Japan with $3,892 billion. India at $477 billion is much lower than China at $2,347 billion. We are growing , fine; but when you look at others, we are probably not doing too well.
GWR, which defines wealth as the value of financial assets and non-financial assets (mainly real estate), minus household debt, says the total wealth of India has tripled $3.5 trillion, and by 2015, this could nearly double to $6.4 trillion. China is the third-largest wealth generator in the world, with total household wealth of $16.5 trillion. If trends continue, it would be the second richest, overtaking Japan, in five years.
The wealth per adult has more than doubled from $2000 in 2000 to $4900 in 2010. Given the 26% rise in adult population, aggregate wealth has grown by 204%. It is GWR that points out a problem area – that in India, personal wealth is heavily skewed towards real property which makes up more than 90% of estimated household assets. Relative to the rest of the world, the distribution of wealth is heavily biased towards the lower end, with the proportion of adults having wealth below $1000 roughly double the world figure. This, GWR rightly points out, reflects the fact that wealth has not grown equally for everyone in India, and that the country has persistent poverty. On the other hand, a very small proportion of the population (just 0.4%) own assets whose value exceeds $100,000.
Here we begin to get an idea of the “other India” that hardly exists in the mainstream media.
The State of Food Insecurity in the World report of the Food and Agricultural Organization of the United Nations (FAO) and the World Food Programme (WFP) deflate this wealth euphoria – that India is Number One in the world in terms of the number of hungry people. That’s 237.7 million at the last count. The number of undernourished people in that country is only 130.4 million. About 21 per cent of India’s population is undernourished i.e. one out of every five. The figure for China is only 10 percent of its population. India also happens to be home to 28 per cent of the world’s total undernourished population of 847.5 million.
The Global Hunger Index (GHI), published by the International Food Policy Research Institute (IFPRI), makes more depressing reading. India is 67th among 84 developing countries in this index – the lower rung you are on the ladder, the more hungry you are. The ones faring worse are Bangladesh, Liberia, Angola, Haiti, Sierra Leone, Ethiopia, with Democratic Republic of Congo at the bottom. Even North Korea, Sudan and Pakistan are better off. This does not mean that India is doing bad; but that others are doing better in terms of tackling hunger. GHI comprises three weighted indicators: the proportion of undernourished in the population, the prevalence of those underweight in children under five and the under-five mortality rate.
We are not only an undernourished and hungry lot, we are also lagging behind in terms of taking women along in the march for wealth. The World Economic Forum’s Global Gender Gap Report 2010 has ranked India at the 112 among 134 economies. India is doing fine with political empowerment of women, but lags behind in the other three categories of economic participation, educational attainment, and health.
All these reports taken together paint a grim picture. While it is true India has been growing in terms of GDP, and the number of wealthy people too has increased, it is equally true that the growth has been tilted in favour of the privileged. Worse, developmental indicators affirm that a large part of India is undernourished, hungry and unfair to women.
These mean a lot of problems when translated into political trouble. Development without a fair distribution of wealth and adequate social welfare measures only mean we are sitting on a powder keg. If and when it blows, it won’t make any difference between the rich and the poor.
