Open Forum
New Delhi, 22
December 2021
Inequality
Dynamics
INDIA POOR
& UNEQUAL
By
Dhurjati Mukherjee
Inequality is a critical
issue for debate and investigation. The recent World Inequality Report 2022,saysglobal
wealth inequalities are even more pronounced than income inequalities. The
poorest half of the global population barely owns any wealth at all, possessing
just 2% of the total. In contrast, the richest 10% of the global population own
76% of all wealth.Of concern to us is its assessment that: “India stands out as
a poor and very unequal country, with an affluent elite.”
The report, which highlights
growing inequality across countries and uses Purchasing Power Parity (PPP) as
an index states that the average national income of the Indian adult population
is €PPP 7,400 (or INR 204,200).While the bottom 50% earns €PPP2 000
(INR53,610), the top 10% earns over 20 times more (€PPP42 500 or INR1,166,520).
And while the top 10% and top 1% hold respectively 57% and 22% of total
national income, the bottom 50% share has gone down to 13%.
The report makes note
of a relative change over the decades. Under British rule, India’s income inequality was very high, with a top
10% income share around 50%. Following independence, socialist-inspired five-year
plans contributed to reducing this share to 35-40%. Since the mid-80s,
deregulation and liberalisation policies have led to one of the most extreme
increases in income and wealth inequality observed in the world. While the top
1% has largely benefited from economic reforms, growth among low and middle
income groups has been relatively slow and poverty persists. Over the past
three years, the quality of inequality data released by the government has
seriously deteriorated, making it particularly difficult to assess recent
inequality changes.
India’s wealth
distribution in average household is equal to €PPP35,000 or INR983,010 in
comparison to China’s €PPP81,000. The bottom 50% own almost nothing, with an
average wealth of €PPP4,200 (6% of the total, INR66,280). The middle class is
also relatively poor (with an average wealth of only €PPP26 400 or INR723,930,
29.5% of the total) as compared with the top 10% and 1% who own respectively
€PPP231,300 (65% of the total)and over €PPP6.1 million (33%), INR6,354,070, and
INR32,449,360.
The report also
reiterates gender inequality in the country.The report says: Gender
inequalities in India are very high. The female labour income share is equal to
18%, which is significantly lower than the average in Asia (21%, excluding
China). This value is one of the lowest in the world, slightly higher than the
average share in Middle East (15%).
Clearly, the
government needs to get its act together and ensure that its slogan of ‘inclusive
growth’ doesn’t remain on paper. Huge resources required for both social and
physical infrastructure development has been moving at a rather slow pace due
to inadequate resources at the disposal of the government.
A case in point is
the Centre’s flagship 100-day job scheme, MGNREGA which faced wage dues of Rs
9682 crore as 100 percent of the funds allocated for the current fiscal had
been exhausted by November-end. According to government estimates, more than 32
lakh migrants returned to six States – Bihar, Jharkhand, Uttar Pradesh,
Rajasthan, Madhya Pradesh and Odisha. The Centre launched the Gareeb Kalyan
Rojghar Yojana under which the migrants, who had returned to their native
places, were provided job cards under NREGA.
As a result, a total
of 7.75 crore households were provided work in 2020-21, the first year of the
pandemic which was an increase of 41 percent over figures of the previous
fiscal. In June, the Centre allocated Rs 73,000 crore for the current fiscal
which was 34 percent less than the revised estimate of over Rs 1.11lakh in
2020-21, obviously due to resource constraints.
The inequality factor
needs to be understood here as the allotment of funds for the rural sector,
where around 60% of the population resides, is much less compared to the urban
sector. The income scenario also reveals that per capita income in the rural
sector is much less than those living in their urban counterparts. The
priorities of the government do need a relook, as while it is faced with
inadequate resources, it is the poor and EWS which suffer the most.
And whileinaugurating
the Kashi Viswanath corridor,Prime Minister Modichooses to comparevirasat
(heritage) with vikas (development) and state that building the Ram
temple in Ayodhyais the same as setting up a medical college in every district
or giving a grand form to Baba Vishwanath temple with pucca houses for the poor,
but it’s definitely not the case. There appears more of a priority of projecting
the majority religion by spending crores on temples and religious corridors
rather than initiating projects at grass-root development, which would improve
the livelihood opportunities of the poor.
Added to this is the debate
on reforms, implying reduced taxation for the rich and making available to them
all facilities, including land at low prices. Also a section of economists feel
that higher taxes are not a panacea for attacking poverty. They fail to realise
that for high populous countries like India, higher taxes translates into more
resources, which could be geared for development work. Moreover, with huge
resources required for social infrastructure development, taxing the rich and
super rich is imperative to redistribute and to gear up the process of
grass-root development.
As per government’s
own data, 25% of India’s population are poor in terms of the multi-dimensional
index that takes into account education and health indicators. Let us take the
realm of education, where many private schools have got land from the
government at reduced prices but fail to provide reservation for students from
the poor or EWS. Also in the health sector, the underprivileged class cannot
get treatment at private nursing homes. The disparity between the rich and the
low income groups or the EWS, not to speak of the poor, steadily builds up as
good jobs go to the highly educated, English speaking upper caste people.
In a materialistic
society, where money power rules, how can economic disparity be resolved? This
is more so as the focus of the government is not geared towards ameliorating
the conditions of the poor but on building and/or beautifying temples, statues
as also modernising airports, importing sophisticated ammunitions etc. Resources
undoubtedly are going in the wrong direction and helping the upper middle class
and the rich. Another aspect is the nexus between politicians and businessmen,
thereby further ignoring the interests of the impoverished masses. How is
it that big business, manage to goscot-free without paying loans taken from
nationalised banks and ordinary folks are harassed for delay in payments of
their loans?
The strategy being
followed currently haslittle chance of reducing disparity. Even the much hyped
Indian economy reaching $5 trillion is unlikely to have an effect in breaching
the inequality. India is now among the most unequal countries in the world. The
report notes: Policykept inequality in check, and policy changes let it run
amok. Therefore, profound policy changes are needed for things to fall back in
place. The government would do well to go through the report with a fine-tooth
to get policy solutions as these ‘often exist’ and ‘focus on how to get the plumbing right, so that policy
can do its job.’ ---INFA
(Copyright, India
News & Feature Alliance)
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