At a time when the Centre is claiming of a noticeable decline in the below poverty line population in the country between 2004 and 2012, global management consulting firm McKinsey has maintained that at least 56 per cent of India’s population still lacked basics like food, energy, housing, drinking water, education and healthcare.
As per poverty estimates released by the Planning Commission, the percentage of population below poverty line in urban areas has declined from 37.2 per cent in 2004-05 to 21.9 percent in 2011-12. In 2011-12, India had 270 million BPl population as compared to 407 million in 2004-05, that is a reduction of 137 million persons over the seven year period, it stated.
However, in its report released on Wednesday, McKinsey Global Institute (MGI), stated that some 680 million Indians live below the Empowerment line (without basic means)-which is more than 2.5 times the population of 270 million below the official poverty line. It maintained that while its population may “officially” not be BPl but, at least, 56 per cent of India’s population still lacked the basic necessities.
“The cost of bridging the Empowerment Gap is seven times higher than the cost of eliminating extreme poverty. Healthcare, drinking water and sanitation make up nearly 40 per cent of the gap in both urban and rural areas,” said Anu Madgavkar, a senior fellow at MGI. The report finds that nationwide, Indians, on an average, lack access to 46 per cent of the basic services they require, with wide variation across districts.
“Without concerted reforms, more than one-third of the population would remain below the empowerment line in 2022,” said Shirish Sankhe, a director of Mckinsey, Mumbai.
The report outlines an economically sound path of “inclusive reforms” - one in which India takes steps to stimulate investment, job creation, and farm productivity, which would aid in dramatically improving the effectiveness of basic services. The report claims that the suggested reforms could significantly reduce poverty and potentially allow India to achieve an average GDP growth rate of 7.8 per cent between 2012 and 2022.
“By measures like accelerating job creation — adding 115 million non-farm jobs, raising farm productivity, increase public spending on basic services, making basic services more effective, one could lift 580 million people above the Empowerment line, leaving 100 million (seven per cent population)below it in 2022 and 17 million (just one per cent) below the official poverty line,” said Sankhe.