PER capita income is officially reported to have increased to $2,064 in the 2019–2020 financial year, up by $155 on $1,909 the financial year before, with the growth of the gross domestic product having been 5.24 per cent. Per capita income has gradually increased, from $1,054 in the 2013 financial year to $1,610 in the 2017 financial year and then to $1,751 in the 2018 financial year, as official statistics show. Per capita income has almost doubled in the past eight years, but inequality has also increased over time, now coming to have been a major concern that grips the economic growth in the absence of any effective measures on part of the government. Per capita income has increased several times from $330 in the 1994–95 financial year, but disparity between the rich and the poor has only widened, with growth in income among the poor falling far below the exponential growth that the rich have experienced. A higher growth of the gross domestic product has failed to rein in income inequality, which now has been, in Gini co-efficient, static more or less at 0.48 since 2016, up from 0.458 in 2010, which is said to have been 0.36 in 1973.
An approaching 0.50 Gini co-efficient is said to pose a high risk of social unrest and the measure of income inequality could, as a Centre for Policy Dialogue study suggests, reach 0.52 within this year. While all this warrants early government steps to effectively attend to the issue, inequality has further exacerbated as a large portion of the population has faced income losses and joblessness as an impact of the COVID-19 outbreak. The increased per capita income has benefited the rich, leaving the poor and the middle-income groups to feel the shock, amidst the shutdown ordered as a preventive measure against the spread of the novel coronavirus that spanned from March 26 to May 30 and restricted economic activities in the April-June quarter of the 2020 financial year. Experts say that the increase in per capita income is arrived at based on the growth rate of the gross domestic product, which may not be relied on. But, as experts suggest, it is almost evident that the rich have had an increased income amidst the COVID-19 emergency when small-time traders, employees in the informal sector, the urban poor and middle-income groups have faced income losses. The South Asian Network on Economic Modelling in a study says that at least 20.4 per cent of the population may fall into poverty, which would take the poverty rate to 40.9, slightly higher than the poverty rate of 2005, when 40 per cent of the population was poor.
An increase in per capita income, without a proper distribution of economic benefits, more down the rungs, may not attend to the income inequality. The government must, in such a situation, ensure the just distribution of economic gains, by expanding social safety net programmes, increasing taxes on the rich and ensuring employment for the people in order to remain true to the liberation war promises of equality, human dignity and social justice.
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