Income inequality becomes cause of concern: Dr Sen
Staff Reporter :
Consistently rising income inequality among members of the public has now become a great cause of concern, said Dr Binayak Sen, Director General of the Bangladesh Institute of Development Studies (BIDS).
Dr Sen came up with the remark while speaking at an event organized by ICDDRB marking its 63th founding ceremony at a city hotel on Tuesday.
He said, “As per income-expenditure survey, the country’s Gini coefficient value is 0.50. It is 0.54 in urban areas and 0.45 in rural areas.
At the same time, inequality in consumption has also increased in the country.
In 2022, the Gini coefficient of consumption inequality at the national level was 0.334. It was 0.356 in urban areas and 0.291 in rural areas.”
“If the value of Gini coefficient is zero, it means that there is ultimate equality in the society and 1 means there is ultimate inequality, Crossing 0.50 indicates high inequality in the country.
So, there is high inequality in the country now,” Dr Sen explained.
“In this situation, the current social security system in the country is not sufficient to deal with this inequality,” he added.
The BIDS DG further said, “According to the household income-expenditure survey of 2016, 27.8 per cent families were covered by the social security program and there was a big gap between rural and urban areas as 34.5 per cent households in rural areas were covered by social protection while it was only 10.1 per cent in urban areas.”
Dr Sen, however, said, “Generally the meaning of increasing inequality means the rich are getting richer and the poor are getting poorer.
But the nature of inequality in Bangladesh is somewhat different.
In Bangladesh, the condition of both poor and non-poor people has improved, but the rate of improvement of the non-poor is higher.”
He said the Covid-19 pandemic and the Russia-Ukraine war have adversely affected the country’s poverty situation, although Bangladesh has made significant progress in reducing poverty in the last decade.
In his presentation on ‘Poverty Trends and Determinants in Bangladesh: Insights from Recent Evidence,’ Dr Sen showed that the tax-GDP ratio is decreasing despite the increase in government expenditure.
“The tax-GDP ratio was 10.4 per cent in the fiscal year 2010-11, while the government expenditure-GDP ratio was 14.2 per cent during that time.
Similarly, in FY 2020-21, the tax-GDP ratio was 9.96 per cent, but the government expenditure-GDP ratio rose to 15.27 per cent. As a result, the spending capacity of the government is decreasing,” he added.
Canadian High Commissioner in Bangladesh Dr Lily Nichols also spoke on the occasion.
