Urbanisation Key to Offsetting inequality in India: World Bank

Posted on 21st Jan 2015 by mohit kumar

New Delhi, Jan 20 (IANS) Urbanisation is the key to offsetting inequality in India while jobs and migration stimulated upward mobility among country's marginalised, according to a World Bank report Tuesday.

"Jobs and migration are supporting considerable upward mobility among both the poor and the valuable sections of the population in India. Households from scheduled castes and scheduled tribes - considered together - experienced upward mobility comparable to that of the rest of the population," said the report.

The report was launched Tuesday in India.

Inequality was not static as "well-being in life depends on opportunity in childhood, mobility in adulthood and support through life," said World Bank chief economist for south Asia Martin Rama, who co-authored the report "Addressing Inequality in South Asia".

"Policies to address inequality should...focus on ensuring equality of opportunity, improving upward mobility and providing adequate support to mitigate shocks for the poorest," he added.

The report studied the Indian population in three categories - poor, the vulnerable and the middle class - and conducted a comparative analysis of their households between 2004-05 and 2009-10.

The study found that about 15 percent of the total population, or 40 percent of the poor in India moved above the poverty line whereas 9 percent of the total population, or about 11 percent of the poor moved into the middle class.

The increase in non-farm jobs in rural India was one of the key factors to drive upward mobility, said the report that credited the occupational shift from farm to non-farm employment for lifting many out of poverty.

The other important factor for upward mobility, the report argued, was migration leading to urbanization within the country.

Increasing urbanisation helped as upward mobility was much stronger in urban areas than in rural areas, the report said.

"Urbanisation is an opportunity and the government should think about how to maximise that opportunity," Rama said.

About 28.5 percent of men working as casual labour were able to become regular employees after migration, stated the report.

"Upward mobility has clearly enhanced people's aspirations. The rural-urban transformation presents a huge opportunity to absorb the country's young cohorts into dynamic urban hubs that can offer jobs and a better quality of life. Economic growth along with policies that help in job creation and urbanisation are critical for India to tackle inequality and fulfil the aspirations of the people," said Onno Ruhl, the World Bank country director in India.

Notable improvements in mobility were found for scheduled castes, scheduled tribes and other backward castes.

The comparison in this report showed that across generations mobility among Muslims was similar to that of higher caste Hindus whereas mobility among scheduled castes and scheduled tribes and other backward castes became higher than that of higher-caste Hindus over time, the statement said.