Back to the British Raj.

The poor are not counted in India's GDP because they consume so little, writes Manas Chakravarty. The average assets for a household in the poorest 10% is Rs 291, while that of a household in the richest 10% is Rs 150 million. The total assets of the bottom 90% of households is Rs 82,90,418, less than that of a household in the top 10%. Which means that returns from assets is also highly skewed. The monthly per capita expenditure of the richest 5% is 4.7 times the bottom 60% of the population, which includes India's middle class. The total medical expenditure of the top 5% is Rs 658 while for the bottom 60% it is Rs 119. For education it is even worse. The spending on education per month of the top 5% is Rs 908, while that for the bottom 60% it is a paltry Rs 125. According to an ASER report the levels of learning in poor children are dropping. The share of income of the top 0.1% in India was 5.1% in 2012, that of the top 0.5% was 9.6%, while that of the top 1% was 12.6%, almost similar to that in 1922-23, which was at the height of the British Raj. Inequality was much less in 1992-93, when liberalization started. Another survey showed the effect of education on income and expenditure levels across different segments of Indian society. Although the top 1% is really wealthy, the average annual income of the top 20% is merely Rs 95,000, well below the taxable limit of Rs 250,000. No wonder, only about 3% of Indians pay income tax, wrote Praveen Chakravarty. He recommended decreasing the tax threshold so that more Indians are forced to pay income tax. About 90% of people earn less than the income tax threshold, so forcing them to pay tax will hit consumption.  A Credit Suisse report said that the total number of people in the middle class in India, defined as those with annual wealth above $13,662, or Rs 737,748, is 24 million. Less than 30% of households in India own a refrigerator, which should be essential in such a hot country. Partly it is because of poor electricity supply and partly due to allocation of scarce resources.  Not just between households and not just between rural and urban areas, inequality is increasing between rich and poor states, despite free trade between states and free movement of people, wrote Arvind Subramanian et al. At 28.5, India ranks lower than Nepal, Mali and Rwanda in the Global Hunger Index. No wonder that 15.2% of our fellow citizens are undernourished and 38.7% of children are stunted. Why when the government has a multitude of social schemes providing help for food, education and even cattle insurance? Since the official economy is not working maybe black money is keeping the poor alive. That must be embarrassing.