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D.Muthukrishnan (Muthu), Certified Financial Planner- Personal Financial Advisor

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The inequality curse

Posted by Muthu on January 13, 2011

I make it a point to regularly interact with financially less privileged people to understand their life and how they manage their finances.

Some, thinking that I’m a journalist interviewing them, ask for some money. I pay them a small amount for sharing their life details with me.

It is not difficult for me to relate to them as I was like them once.

Till 1996-97, living in a 100 Square feet house, with Rs.2000/- salary a month, having only 2 shirts and pants to wear, walking around 10 kms everyday unable to pay bus ticket, sleeping only for 5 hours a day as I need to study 3 hours every night for higher education…. I’m able to easily empathise the life situation of these people.

A security guard in a leading hospital chain, who is in his late fifties, is earning Rs.6000/- a month. He has 2 sons and 2 daughters. Only one daughter is married. Two sons, who dropped out of school is bringing each Rs.4000/- a month. They are trying to save Rs.2 Lakhs required for the other daughter’s marriage with 5 mouths to feed, pay rent and meet all the other monthly expenses.

With severe arthritis, he is forced to stand for most part of 12 hour shift, which mostly extends to 13 hours, 6 days a week. Unable to pay the rent in Triplicane, the family has moved to Minjur. This means that he has to commute totally for 4 hours a day. He is able to sleep only for 5 hours every night and he force himself to wake up for next day’s job.

A cook, who is earning Rs.4000/- a month, have 3 school going children and lives in a slum area in Taramani for a rent of Rs.2000/- a month. Her husband is a waste paper merchant and brings home roughly Rs.4000/- a month. A part of the money goes for his alcohol consumption.

Her children in the corporation school are very bright and have got award from the mayor for being toppers in their classes. The mayor has waived off the Rs.75/- school fee, per annum per child. Her employer every year gives her kids two sets of uniform and provides for books also.

A hair stylist working in a beauty spa chain gets paid Rs.8000/- every month. His brother is also in the same profession and earns Rs.6000/- a month. The brothers and totally 6 member of their family live in a 100 square feet house belonging to a temple land. Since it’s temple land, the rent is only Rs.1000/- a month. The family has a loan of Rs.2 lakhs with interest rate @ 60% per annum and is servicing the same. There is only one toilet for every 4 families.

In a tier 2 city in Tamilnadu, two college graduate girls, in their mid twenties, whose father died suddenly, have zero family assets, lives in a rented house and  need to support their mother, work for back office of  a financial services company as  contractual workers (what is called as ‘off role staff’), each earning  Rs.4000/- every month. They have no clue as to how they would get married.    

Their father has spent his meagre earnings in educating them and though they are good looking and well educated girls, the only alliances they are getting in their community are from prospective bridegrooms who have passed 5th standard, with no proper source for livelihood. I understand that even with this kind of bridegrooms, the cost of marriage of one girl would not be less than Rs.3 lakhs. Where they would go for Rs.6 lakhs? What would be the fate of their mother?

I can list lot more families here. If you think the above are poor, you are wrong. As per government statistics, they are the great Indian middle class.

World Bank estimates the average monthly income of an Indian to be Rs.3750/- a month.

Please note that this is only average and the distribution is heavily skewed.

As per Prof. Arjun Sengupta’s report, which is widely accepted by economists and development agencies, 77% of Indians live under Rs.600/- a month – which is nation’s poverty line. Government disputes this and say the number is only 37.2%, assuming true, is itself very bad.

Ever wondered at such a high food prices, how these people survive?

Going by the above statistics, even a beggar in Chennai is not poor but would be classified as middle class. Infact there is no poverty in Chennai at all! Great, isn’t it! It’s time to celebrate as we have wiped off poverty statistically though we cannot do it practically.

India is growing only for 25%-30% of its population, the rest are simply forgotten.

Rich are getting richer and the poor are getting poorer.

Nothing new about this except that the inequality is widening day by day.

The bottom 50% of the world’s population just owns approximately just 1% of global wealth.

The wealthiest 2% of the world owns more than 50% of all the global household assets.

The wealthiest 0.5% of the world control over 35% of the world’s wealth.

Every 3.6 seconds someone starves to death and 75% of them are children under the age of 5.

4.2 billion people, majority of the world’s population live on less than $2 dollar a day.

2.6 billion People of the world do not have access to even basic sanitation.

400 million children in the world do not have access to drinking water. 28% of the children in the developing countries have stunted growth due to lack of food.

More than 3 million children died world over in 2008 due to lack of food.

One country, USA owns around 25% of total wealth of the world while the entire continent of Africa owns only around 1% of it.

The curse continues.

2 Responses to “The inequality curse”

  1. Ashwin said

    Touching reality

  2. Shankar said

    A major problem that i see in such families is the huge cost of social expectations, for example marriage. I do not understand why marriages cost so much, 2 lacs or 3 lacs for a person earning 5000 looks incredibly high. Why can not we get a simple marriage done. I can understand if millionaire splurges on marriage because its prestige issue for him etc., but the poor are going to be saddled with the debts for rest of their lives. Then there are expenses related to child birth, etc. Its a life of drudgery basically. They will never be able to come out of the rut as another marriage will come up. We need simple marriages and men who say no to dowry.My marriage cost less then 2 lacs, there was no dowry.

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