INDIA’S WEALTH RISES AND SO DOES INEQUALITY: OXFAM Report
The spatial disparity in India is a concern because it is not only high but also increases with increased growth. Various surveys and studies by both global and Indian agencies have shown that some in India both interstate and intrastate inequality has increased many folds. A report on global wealth by Credit Suisse said that the uneven growth has left 96 per cent of the adult population in India at the base of the wealth pyramid. Further, wealth in India is dominated by property and other real estates that make up 86 per cent of its estimated household assets, according to the global financial services major.
The extent of economic inequality is evident from the Oxfam report which states that the top 10 per cent of the population holds 77.4 per cent of the total national wealth. The contrast is stark for the top 1% which holds 51.53% of the nation’s wealth.
As India continues to make billionaires, it is only the top 1% of the country’s richest which is getting richer by 39% as against the 3% increase in the total wealth for the bottom half of the total population.
Even in the Indian context, economic inequality between western& southern states and northern & eastern states is blatantly visible. Per Capita income of the Four Southern states is nearly twice than the Hindi Belt of North India. This clearly suggests raising Regional Inequality.
Oxfam further said that 13.6 crore Indians, who make up the poorest 10 per cent of the country, continued to remain in debt since 2004.
The survey makes it clear that the government is aggravating the inequality by not giving proper funding to the public services such as health care and education and under taxing the corporations and the rich, thereby failing to come down on the tax evading entities.
The report titled 'Reward Work, Not Wealth' also sheds light on the fact that women and girls are hardest hit by rising economic inequality.
WHAT CAN BE DONE?
Though a certain amount of inequality is said to be beneficial but large scale inequality is detrimental for the development of any country. A resilient strategy has to be undertaken for equitable development of all because when everyone moves forward together success takes care of itself. Many corrective steps have been taken but results are abysmal so now a pragmatic approach is required by government intervention--
Policy intervention such as these can address the following:
Efficient Tax Structure: Taxing the rich more with respect to the poor, (progressive taxation) though within the acceptable limit and using these efficiently to redistribute it among relatively poor by providing efficient public services.
Stronger Social Safety Net: Important so that people can stop worrying about gathering means for existential purpose and focus on improving their quality of life. (Affordable Health, education).
Skill Enhancement: Focus on building skills which are in line with today and future requirement (4th Industrial Revolution). Region-specific development plans should be undertaken. Like modernization of agriculture in North and North-Western India, sustainable utilization of natural resources in central and North-Eastern India and industry establishment in Southern India. Roping of unskilled or semi-skilled people of backward regions in labour-intensive export-oriented industries like textile and leather. It would increase their income and there by the standard of living.
Inclusiveness: Financial, political, social, ecological, and gender inclusiveness need to be integrated into policies. Re-energizing interstate councils and zonal councils and reorient them towards a more balanced economic development along with their present mandate of coordination and integration. It would provide a national perspective on the development of all. More backward regions within states should be identified and for them, a targeted approach should be adopted. Like for Vidarbha and Marathwada in Maharashtra and for Eastern districts in UP. Governance bodies both at the rural and urban level should be endowed with adequate powers.
Prospects of attracting more FDI should be increased as in India top three states are those who are the largest receivers of FDI. For this innovative public-private partnerships, better regulatory mechanism, simplified dispute resolution and infrastructure development in all states is the key.
States themselves should develop a culture of competition by adopting best international practices, by engaging with global financial institutions and by competitive service delivery. The ethical and more humane society is vital, promoting and rewarding philanthropy to address inequality can also serve the purpose.
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