Open Forum

New Delhi, 29 January 2020

Widening Inequality

HAS GOVT WILL TO REMOVE POVERTY?

By Dhurjati Mukherjee

It is a widely known fact that inequality has been widening in most Third World countries, including India. This runs contrary to the effect of various developmental programmes being carried out by national governments and international agencies enumerating such activities with targets and resultant benefits. Added to this, politicians are boosting about such plans and the likely benefits to accrue to the poorer sections of society. But reports reveal that not much of welfare has been reaching the poor and the marginalised sections.

Not that the scenario is likely to change. Given the fact that in most democracies like India, the politician-business nexus is quite strong, it is but natural that in the coming years, the benefits of development will be captured by the rich, leaving something for the upper middle class. Moreover, with the cry for privatisation becoming more pronounced in India and elsewhere, the poor are likely to suffer more due to the strong profit motive of the private sector in areas such as health, education etc. In fact, this phenomenon is already evident in our country.

The recent Oxfam report titled ‘Time to Care’ revealed that just one per cent hold more than four times the wealth held by 953 million people who make up for the bottom 70 per cent of the country’s population. The total wealth of all the 106 Indian billionaires (Rs 28.9 lakh crore) is more than the full year budget of 2018-19 (Rs 24.4 lakh crore). Moreover, the startling finding has been that there has been a 46 per cent increase in wealth of the top one per cent but just 3 per cent of the bottom 50 per cent. Though not mentioned in the study, it is generally believed that there may have been an increase of just one per cent of the bottom 25 per cent of the country’s population.

Social and economic unrest is a common phenomenon in almost every country as also in India sparked by different tipping points like corruption, constitutional breaches, inflation of basic goods and services etc., aptly pointed out by the World Economic Forum report. It is thus clearly discernible that that the broken economies are lining the pockets of billionaires and big business houses at the expense of ordinary men and women who struggle for a dignified existence.

It may be significant here to mention the Global Wealth Report 2018 which found that since the start of the millennium wealth in the country grew at 9.2 per cent of year, faster than the global average of 6 per cent even after taking into account population growth of 2.2 per cent annually. Analysing this with the findings of the Oxfam report clearly reflects that the wealth has been cornered by the rich and upper middle income sections. 

A significant point made in the Oxfam report is that governments are massively under taxing the wealthiest individuals and corporations and failing to collect revenues that could help lift the impoverished sections by providing them basic facilities as also adequate health care and education. But unmindful of the huge population living under or near poverty like conditions, there is pressure from various lobbies, including journalists who pose to be economists, to cut welfare expenses and privatise systems though knowing fully-well that the private sector in our country is utterly dishonest and only bent on making money through unscrupulous means.

The disturbing element is that only 5.87 crore income tax returns were filed up to August 15, 2019 which is hardly impressive considering the country’s wealth generation trends. As per tax returns released by the revenue department, the number of crorepati taxpayers was only 97,689 during the assessment year 2018-19, which may presently be around one crore. India boasts to be the world’s fifth largest economy in US dollar terms after the US, China, Japan and Germany but the revenue collection is poor to service such a large economy with a high population density.

The question arises whether tax collection is being done judiciously or whether just those salaried persons are targeted. It may be mentioned here that professionals like doctors and engineers earn lakhs of rupees income per month but are hardly taxed. Moreover, there are big players in the capital market who earn handsomely but use unfair means to hide the eyes of the income tax department.

Obviously, the rise in crorepatis affects the poverty syndrome. As most of their wealth gains come from property and stock market booms, they do not translate into employment opportunities or help into funding developmental programmes. National governments in India and elsewhere are very much concerned with the wealthy, who fund political parties and election campaigns, and their interests are given priority over those of the poor and economically weaker sections.

The declining consumption expenditure, apart from increasing unemployment and underemployment points to the fact that though the percentage of population below the poverty line may have decreased a little, taking the economically weaker sections into cognizance, it would clearly reveal that their livelihood patterns are becoming poorer. It is a well-known fact that the higher the average per capita consumption, the lower the head count ratio or poverty.

Things are generally judged from better-off rural areas but the conditions prevailing in the backward areas and districts of the country is indeed quite distressing. The government is oblivious to these conditions, specially of the scheduled tribes and dalits and how they earn their livelihood. In the present state of things, there is no likelihood whatsoever of the disparity between the rich and the poor, the urban and the rural class, the industrial worker and the farmer narrowing or even remaining static.

The obvious reason is because the capitalist government is not really interested to transform the rural sector and the livelihoods of the marginalised sections. The politicians aided by the bureaucrats do not have a decentralised, grass-root approach and prefer to dictate from the top. Thus, the real problems of the masses are not heard and remain neglected.

On the other hand, the resource constraints of the government are a major hindrance to removing poverty. There are several meetings before the Budget with industrialists, chambers of commerce but very few with farmers’ organisations or with panchayats representatives to know what are their real problems and which schemes should be taken up in the current year. Obviously, the demands and concessions of the business class get priority as also expenses related to defence – where the party in power is assured of a sizeable cut-off – while those of the farming community is ignored.

Unless the planning strategy is changed and the skewed development strategy is geared towards the rural sector with agriculture and agro industries getting a thrust, inequality in incomes and lifestyles would remain. One cannot and should keep hopes on the current genre of politicians, at least in India and such other countries where true democracy does not exist.----INFA

(Copyright, India News & Feature Alliance)