India's urban inequality: Top 10% have 50,034 times more wealth than poorest 10%: Report based on NSS data

Inequality in urban India

By A Representative
Government of India’s National Sample Survey (NSS) figures show that the average value of assets held by urban households falling in the top 10% income category (identified as decile 10) in urban India is Rs 1.5 crore, which is 50,034 times the average value of assets held by an average urban household in the lowest 10% category, or decile 1.
NSS divides household asset holding classes into 10 decile segments for rural and urban India. It means that decile 1 in comprises the poorest 10% of households in terms of their holding of assets, and the decile 10 denotes the richest tenth of households in terms of asset ownership. Almost all physical and financial assets are included.
Analysing latest available NSS urban figures, a recent report adds, those in the 10th decile have “18.7 times the average value of assets held by a household in the 6th decile” and “4.1 times the average value of assets held by a household in the ninth decile.”

“What’s more”, says the analyst, Manas Chakravarty, “these are just the official figures – God only knows how much more skewed these numbers would be if we found some way to include undeclared wealth in the data.”
In rupee terms, says the analyst, the household in the poorest decile – decile 1 – has Rs291 worth of assets, the one in decile 2 has assets worth Rs 9,565, as against the richest household (in the 10th decile), which has assets worth Rs 1.5 crore”

Worse, he adds, if one adds up the total value of assets held by the first nine assets, then, put together, their assets would be worth Rs 82,90,418, which is lower than the richest household’s assets.

Consumption inequality

Coming to the NSS’ consumption data, which show the monthly per capita expenditure of the different classes, from the poorest 5% to the richest 5%, the analyst says, “Differences in consumption are not as skewed as wealth or income, because there’s a limit to what a person can consume in many items.”
Thus, he says, “Monthly per capita expenditure of the richest 5% in urban India is 14.7 times that of the poorest 5%. It is 4.7 times that of the lowest 50-60% bracket, who are India’s actual middle classes.”
Then, says the analyst, the “total medical expenditure per month of a person in the 50-60% group is Rs 119 and “for the top 5%, it’s Rs 658… For those in the 50-60% bracket, spending on education per month is a mere Rs 125. For the richest 5%, it’s Rs 908.”
Pointing out that “it’s not just wealth that’s distributed unequally, so is opportunity”, the analyst says, “Durable goods consumption of the richest 5% is 23 times that of people in the 50-60% group. Spending on personal transport equipment of the richest 5% is 35 times that of the 50-60% group.”
“Given these disparities, even if a disaster were to cut down the consumption of the lower half of the population by a third, it will be a tragedy for the poor, but it will make little difference to the overall spending”, comments the analyst.
He adds, “In short, the poor do not really matter as consumers. They do matter, however, as a reserve army of labour, keeping wages down in the overall economy and boosting profits, which bolsters the incomes of the rich.”