Despite high growth, inequality is getting more pronounced between the middle class and the rich, reveals a survey conducted jointly by the Central Bureau of Statistics, the World Bank, the Department For International Development and the Asian Development Bank. Income growth during 1995-96 and 2003-04 was high, with the real average per capita expenditure having gone up by 4.5 per cent owing to growth patterns driven by the increasing returns on human and physical assets. During the same period, the incidence of poverty declined from 42 per cent in 1995-96 to 31 per cent in 2003-04. However, in rural areas, social and economic outcomes present a gloomy picture. In the remote mid-West and far-West, poverty level is the highest whereas access to services is the lowest.

To reduce poverty and narrow income inequality, new ways have to be identified along with agriculture, infrastructural development, decentralising power and mobilising resources judiciously prioritised. Notwithstanding the challenges, creating better climate for investment, space for development backed by programmes to sustain growth could be effective ways of alleviating poverty. The existing domestic growth needs a further push, along with devising ways of distributing the fruits of development more equitably among the masses because the current growth seems to be largely restricted to cover those in the upper income brackets. Greater attention is thus required to innovate timely reforms. Stress should be on participatory development of the middle- and low-income groups.