Lok Sabha Question No. 174 (UNSTARRED), answered on 2018-02-02
Subject: Wealth Index of States
Ministry: FINANCE
Asked by: (ADV.) JOICE GEORGE

## Government of India Ministry of Finance Department of Economic Affairs

## LOK SABHA

## UNSTARRED QUESTION NO. 174

TO BE ANSWERED ON FEBRUARY 2, 2018

## WEALTH INDEX OF STATES

174. ADV. JOICE GEORGE:

Will the Minister of FINANCE be pleased to state:

- (a) whether the Government has released the wealth index of States, if so, the details thereof, States/UT- wise and rank-wise;
- (b) the details of tools/variables used for conducting the study in this regard;
- (c) whether the Government has used quintiles scores to classify population for States, religious and caste groups and rural-urban areas in each quintile, if so, the details thereof;
- (d) whether High levels of income and wealth inequality is a matter of great concern in the country, if so, the details thereof; and
- (e) whether the Government is planning any policy intervention in this regard and if so, the details thereof and if not, the reasons therefor?

## ANSWER

MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI PON. RADHAKRISHNAN)

- (a) The National Family Health Survey 2015-16 (NFHS-4) conducted under the stewardship of the Ministry of Health and Family Welfare,Government of India has presented data on wealth index  of  States/Union  Territories  (UTs).  Chandigarh,  followed  by  Delhi  and  Punjab  have  the highest percentage of population in the highest wealth quintile. A statement on State/UT wise percentage of population in the highest wealth quintile is placed at Annexure-I.
- (b) The wealth index has been computed by using household scores based on indicators which reflect ownership of assets and other characteristics. The sample households are given scores based on the number and kinds of consumer goods they own, ranging from a television to a bicycle or car, and housing characteristics such as source of drinking water, toilet facilities, and flooring  materials.  These  scores  are  derived  using  principal  component  analysis.  National wealth  quintiles  are  compiled  by  assigning  the  household  score  to  each  usual  (de  jure)

household member, ranking each person in the household population by their score, and then dividing the distribution into five equal categories, each with 20 per cent of the population.

(c) The NFHS-4 has reported the wealth quintiles according to caste groups, religious groups and according to urban and rural residence of the households. As per NFHS-4, 51 percent of the population in scheduled caste households and 71 per cent of the population in scheduled tribe  households are in the two lowest wealth quintiles. It has also reported that in India, the wealthiest households are concentrated in urban areas. According to NFHS-4, 74 per cent of the  urban  population  is  in  the  two  highest  wealth  quintiles,  while  more  than  half  of  the  rural population (56 percent)falls in the two lowest wealth quintiles.

(d)  to  (e)  The  wealth  indices  of  States/UTs  are  based  on  select  indicators  of  ownership  of assets  and  housing  characteristics.  As  per  the  NFHS  wealth  index,  there  are  wide  State/UT wise  variations  in  the  percentage  distribution  of  the de  jur e  population  by  wealth  quintiles. Reducing inequalities is high on the agenda of the Government. According to Economic Survey 2017-18, utmost priority to social infrastructure like  education,  health  and  social  protection  is being given by the Government to engineer an inclusive and sustainable growth in India. The Government has been enhancing expenditure on human capital along with adopting measures to improve efficiency of expenditure by convergence of schemes. This is evident from the RBI data  which  show  that  the  expenditure  on  social  services  by  the  Centre  and  States  (General Government) as a proportion of GDP has increased from 5.8 per cent in 2015-16 to 6.6 per cent 2017-18 (BE).

Several  initiatives  have  been  taken  up  by  the  Government  of  India  to  eliminate  poverty, inequality  and  to  empower  the  marginalized  sections  of  the  society  by  expanding  the  social security net through Pradhan Mantri Suraksha Bima Yojana (Accident Insurance), Atal Pension Yojana  (Unorganized  Sector)  and  Pradhan  Mantri  Jeevan  Jyoti  Yojana  (Life  Insurance)  and institutional support for entrepreneurship with the help of MUDRA Bank, to provide microfinance to entrepreneurs in rural hinterland of India and a National Hub for SC/ST entrepreneurs has been  created  to  support  the  entrepreneurs  belonging  to  the  marginalized  communities.In addition,Stand up India scheme was launched to boost the spirit of entrepreneurship among the most vulnerable groups of the society wherein every single branch of a public sector bank is asked to support one entrepreneur each from women and SC/ST category. Apart from providing the social security net and institutional credit support to the marginalized sections of the society, the Pradhan Mantri Jan DhanYojana is operational that strives to achieve financial inclusion by ensuring that the economically weaker  sections have  access  to bank  accounts. Other programmes/schemes such as, Mahatma Gandhi National Rural Employment Guarantee Act, Deendayal Antyodaya Yojana -National Rural and Urban Livelihoods Mission, Swachh Bharat

Mission, Pradhan Mantri Awas Yojana, Skill India, Make in India, etc. are being implemented by the Government in both rural and urban areas of the country which aim to create directly and indirectly additional employment opportunities to reap the benefits of the demographic dividend.

*****

Annexure-I in referred to reply of the Lok Sabha Question No. 174 due for reply on 02.02.2018

## State/UTs wise  percentage of population in highest wealth quintiles arranged in descending order

| State / UTs               |   %of Population in the Highest Wealth Quintile |
|---------------------------|-------------------------------------------------|
| Chandigarh                |                                            78.5 |
| Delhi                     |                                            61.1 |
| Punjab                    |                                            60.7 |
| Goa                       |                                            54.5 |
| Kerala                    |                                            48.1 |
| Haryana                   |                                            45.8 |
| Lakshadweep               |                                            37.3 |
| Puducherry                |                                            35.3 |
| Mizoram                   |                                            32.6 |
| Himachal Pradesh          |                                            31.8 |
| Andaman & Nicobar Islands |                                            30.3 |
| Gujarat                   |                                            29.9 |
| Uttarakhand               |                                            29   |
| Daman & Diu               |                                            28.9 |
| Jammu & Kashmir           |                                            26   |
| Maharashtra               |                                            26   |
| Telangana                 |                                            22.3 |
| Tamil Nadu                |                                            22   |
| Karnataka                 |                                            21   |
| Dadar & Nagar Haveli      |                                            19.4 |
| Rajasthan                 |                                            19.2 |
| Andhra Pradesh            |                                            17   |
| Madhya Pradesh            |                                            15.8 |
| Uttar Pradesh             |                                            15.5 |
| Chhattisgarh              |                                            13.5 |
| Sikkim                    |                                            11.6 |
| Nagaland                  |                                            10.5 |
| Manipur                   |                                             9.5 |
| West Bengal               |                                             9.2 |
| Jharkhand                 |                                             9   |
| Arunachal Pradesh         |                                             8.9 |
| Odisha                    |                                             7.2 |
| Meghalaya                 |                                             6.5 |
| Assam                     |                                             6.4 |
| Tripura                   |                                             6.3 |
| Bihar                     |                                             3.3 |

Source: India Report: National Family Health Survey -4 (2015-1

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