NITI AAYOG NEEDS TO PERHAPS LOOK AT SDG 10 AT A HOLISTIC MANNER

NITI AAYOG NEEDS TO PERHAPS LOOK AT SDG 10 AT A HOLISTIC MANNER

Subject: Governance

Context: Viewed against the economic impact of the pandemic, nations’ efforts towards meeting the UN’s Sustainable Development Goals (SDGs) by 2030 have assumed even greater importance.

Concept:

• NITI, without doubt, has done well to focus on crucial social indicators like women’s representation in policy-making, crimes against SCs/STs, transgender labour force participation, etc, but, dropping earlier indicators that brought into stark relief the progress (or the lack of this) on reducing economic inequality doesn’t make the picture truly representative.
• In 2019, the NITI’s index included inequality indicators like the growth in household expenditure per capita for the bottom 40% of rural and urban populations, as well as the Gini index, a measure of wealth inequality.
• In 2018, the index had also included the Palma ratio—which shows the gap between the richest 10% and the bottom 40%.
• These are all crucial indicators to have a more granular assessment of the current position of households in NITI’s only economic indicator of inequality this year—population in the two lowest wealth quintiles.

Palma Ratio

• The Palma ratio of inequality was proposed by Alex Cobham and Andy Sumner in 2013, on the basis of the ‘Palma proposition’.
• The Palma ratio is a measure of inequality. It is the ratio of the richest 10% of the population’s share of gross national income (GNI) divided by the poorest 40%’s share.
• The measure is now reported by many of the leading income distribution databases and some national statistics offices, and received wide support as an original indicator for the UN Sustainable Development Goal 10.