Gaping income-expenditure mismatch amid higher inflationary pressures, coupled with taxation inequity, is increasing fast the number of poorest households (HHs) both in rural and urban areas of Bangladesh, analysts say and the Gini coefficient substantiates.
Bangladesh Bureau of Statistics (BBS)'s latest survey has shown the poorest households in rural areas increased to 29.4 per cent in 2022 from 29.29 per cent in 2021.
The ratio of the rise of the poor is faster in city-corporation areas, recording higher by 1.1 percentage points to 4.1 per cent in 2022 from 3.0 per cent in the previous calendar year of 2021, the BBS's Bangladesh Sample Vital Statistics survey report showed.
However, the poorest HHs in the municipalities and other urban areas fell to 11.2 per cent in 2022 from 11.31 per cent in 2021, as mapped out by the government's statistical agency in the survey of socioeconomic status of families.
On the other side of the scale, the BBS survey has found the country's 13.7 per cent of the HHs richest ones.
In the rural areas, the richest HHs account for only 7.1 per cent, while 48.7 per cent of the households belong to the richest quintile in the city-corporation areas and 26.6 per cent to municipalities and other urban areas.
The survey findings are shown based on wealth quintile, considered one of the key parameters to gauge socioeconomic condition of households.
The Sample Vital Registration System (SVRS) 2022 survey, compared the previous year, reveals socioeconomic differences via wealth quintiles like household construction materials, drinking water and sanitation access, and ownership of various items (e.g. television, refrigerator), which form a wealth-index score.
This score is used to rank households by wealth, and the population is then subdivided into five quintiles to produce a relative indicator of socioeconomic status within the country at the time of the survey.
While the wealth quintiles are useful to understand relative wealth and equity within a country, they do not give one a sense of absolute wealth.
In the survey, the BBS found the highest proportion of 42.7 per cent of poorest HHs in Rangpur division compared to other divisions while Dhaka division showed the lowest 12.8-percent share of the poorest-quintile households in terms of wealth-quintile index.
In terms of the richest-quintile share among the divisions, 6.2 per cent of the households belong to Mymensingh division while Dhaka division hosts 21.5 per cent of the richest households, the BBS has showed.
Economist and RAPID Chairman Dr Abdur Razzaque told the FE Thursday that the income inequality is growing in the country which was also reflected in the BBS's HIES survey.
Since the rich are becoming richer and the income of the poor is going down, so the number of poorest HHs is also going up in the country, he says, citing wealth concentration as a major factor for disparities.
"Taxation system in Bangladesh is not equal. The wealth tax is still not practiced properly. The government should go for introducing proper wealth-taxation system to reduce the income inequality," Dr Razzaque suggests.
A latest Gini index-the matrix of inequality in an economy (on a scale of 0 to 1)--also showed widening inequality for income and wealth gaps. Higher values from 0 indicate higher inequality.
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