Urban poor's problems a big challenge before new government

One of the biggest challenges for the next government will be to resolve problems of the urban poor who have not benefited from poverty alleviation schemes and are reeling under high prices, a senior official said.
"The urban poor are the most squeezed section of society due to high inflation rate in the past years. It is a big challenge before any government to deal with the situation. There was a lot of talk on this issue for the past five years but nothing substantial has been done so far," National Statistical Commission Chairman Pronab Sen told PTI.
According to Sen, the rural poor were insulated from the impact of higher commodity prices by schemes such as the employment guarantee programme, which were not available for the poor living in cities.

The rural poor have easier access to food grains, vegetables, fruits, poultry and milk at reasonable prices, but those in the urban areas have to pay market prices for them.
Sen said due to the rise in prices of agriculture produce, the rural poor benefited and their income went up, while the slowdown in industrial activity caused job losses and income erosion in urban areas.
During April-February, the index of industrial production, a measure of factory activity, declined 0.1 per cent compared with a 0.9 per cent growth in the corresponding period of 2012-13.

Retail inflation measured in terms of the Consumer Price Index increased to 8.31 per cent in March from 8.03 per cent in February, mainly on account of vegetables, fruits, pulses, milk, spices, and egg, fish and meat.

Inflation as measured by the Wholesale Price Index increased to 5.7 per cent in March from 4.68 per cent in the previous month. Inflation for primary food articles for March increased to 9.9 per cent from 8.12 per cent in the previous month mainly on account of increase in prices of moong, urad, vegetables, fruits, milk and fish.
Sen was of the view that wages in cities have not increased in tandem with retail inflation because industry uses WPI inflation for assessing its productivity and profitability.
Retail inflation remained in the range of 8 to 11 per cent since March last year, whereas WPI was between 4.5 and 7.5 per cent, leading to a mismatch between industry's assessment of profitability and workers' demand for an increase in wages.