New Delhi: Citing a recent World Bank report, the Congress on Sunday intensified its attack on the Centre, alleging that rising inequality has now become deeply entrenched in the country’s economic growth pattern. The party also stressed the urgent need for reforms in the GST framework, curbing "brazen corporate favouritism,” and introducing income support measures for families.

Congress flags rising inequality despite growth claims

Congress general secretary in charge of Communications Jairam Ramesh highlighted that while the Modi government was projecting the World Bank’s latest Poverty and Equity Brief for India in a positive light, the report actually raises several serious concerns.

The World Bank noted, "Over the past decade, India has significantly reduced poverty. Extreme poverty (living on less than USD 2.15 per day) fell from 16.2 per cent in 2011-12 to 2.3 per cent in 2022-23, lifting 171 million people above this line."

Ramesh, in his statement, said that calculations based on the international poverty line indicate that poverty has continued its downward trajectory, reaching historically low levels.

 "This reflects the success of India's growth story – which began with liberalisation in June 1991 and which has since taken a momentum of its own – and that of several social welfare interventions developed by Dr Manmohan Singh's government during 2004-14," he noted.

Role of MGNREGA and Food Security Act
Ramesh pointed out that initiatives like the MGNREGA scheme launched in 2005 and the National Food Security Act of 2013 have played critical roles. The MGNREGA, he said, "effectively set a floor on the annual income for crores of families, acting as a safety net to keep families out of poverty," while the Food Security Act laid the groundwork for schemes like the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKY).
Concerns over new poverty data methodology

However, Ramesh cautioned that the World Bank also flagged concerns over the updated data, observing that adopting the new purchasing power parity (PPP) conversion factor from 2021 instead of 2017 could reflect a higher rate of extreme poverty.

Quoting the report, he said, "Changes in the questionnaire design, survey implementation, and sampling in the Household Consumption Expenditure Survey 2022-23 present challenges from making comparisons over time."
 He recalled that the government had scrapped the 2017-18 survey after it revealed a decline in rural consumption, raising further doubts about the credibility of current assessments.

Need for Updated Poverty Benchmarks

As a lower-middle-income country, India should measure poverty against the USD 3.65/day benchmark, Ramesh argued, noting that by this yardstick, the poverty rate in 2022 stood at a much higher 28.1 per cent.
 "Wage disparity in India remains high, with the median earnings of the top 10% being 13 times higher than the bottom 10% in 2023-24," he alleged. He further suggested that existing government data likely underestimates the extent of consumption inequality due to sampling and data limitations.
Strengthening welfare systems amid growing vulnerabilities

Ramesh emphasised that large sections of India's population hover just above the international extreme poverty line, implying that welfare systems like MGNREGA and the NFSA 2013 must not only be preserved but also strengthened.

He said that the Congress' longstanding demands — increasing MGNREGA wages, conducting the overdue Population Census, and adding 10 crore people under the NFSA — have gained renewed urgency in light of the World Bank findings.

Government's handling of poverty data criticised
Blaming the government for opacity in poverty data, Ramesh said, "The lack of clarity and transparency over the prevalence of poverty in India is a result of this Government's confused and opaque policymaking. Since the
Rangarajan Committee Report submitted in 2014, the Union Government has not set any updated poverty line for the country. The Government must do so immediately."

He also criticised the government’s handling of official statistics: "Data quality, consistency and integrity are of the highest priority," he said, but argued that the Centre's record, exemplified by the "suppression of the Consumption Expenditure Survey 2017-18", leaves much to be desired.

"In fact, blatant data doctoring and manipulation is part of the Modi government's tool-kit when economic realities are contrary to its claims and boasts," Ramesh alleged.

 He asserted that "sharpening inequality" has now become a defining feature of India's economic trajectory under the Modi regime, with an ever-widening gap between "the privileged few and the dispossessed many”.

Congress calls for GST reform and income support measures
"There is a compelling need for tax reforms in GST to mitigate its regressive impacts, ending tax terrorism to stimulate private corporate investment, ending brazen corporate favouritism, and providing income support for families and incentives for household savings," he said.

World Bank data shows poverty decline, but challenges persist
The World Bank report had also noted that rural extreme poverty declined from 18.4 per cent to 2.8 per cent, and urban extreme poverty from 10.7 per cent to 1.1 per cent, notably narrowing the rural-urban gap.
 
It further stated that using the lower-middle-income country poverty line of USD 3.65 per day, India’s poverty rate fell from 61.8 per cent to 28.1 per cent, lifting 378 million people out of poverty.

PTI