Household surveys in India often underreport consumption, income, and wealth. Furthermore, it’s difficult to deny that Covid-19 has widened existing faultlines, increasing entrenched inequities. The growth in the riches of the extremely wealthy during this era, when contrasted with the suffering of millions of migrant labourers forced to travel back to their communities, serves as a striking reminder of the breadth of economic inequality.
In this backdrop, the most recent World Inequality Report (2022) serves as a timely reminder of the concentration of money at the very top of the economic pyramid.
In general, discrepancies in consumption, income, and wealth dominate the discourse on inequality in India. However, there are significant discrepancies in “opportunity” throughout the country.
- Factors Influencing Opportunity Inequality: An individual’s class of origin, household of birth, and parents all have a substantial impact on his or her educational achievement, work and income possibilities, and, as a result, class of destination.
- Children born into impoverished homes have a lesser likelihood of advancing up the financial ladder, as seen by low levels of social mobility between generations.
World Inequality Report: India-Specific Findings:
- According to the research, India is currently one of the world’s most unequal countries.
- In India, the wealthiest 10% of the population gets 57% of the national income.
- The very elite top 1 percent gets 22 percent of the top 10%.
- In comparison, the percentage of national income earned by the poorest 50% has fallen to 13%.
- The female labour income share is 18%, which is much lower than the Asian average [21 percent excluding China].
- Impact of the Covid-19 Pandemic: Covid has worsened schooling gaps, caused labour market scarring, and aggravated economic disparity, all of which are likely to restrict social mobility.
- Impact on education: According to the ASER 2021, expanded school closures and the move to online means of education have worsened the learning disparities between children from impoverished and affluent households. Younger children from low-income homes were more likely to be denied access to learning media such as cellphones, tablets, and the internet. Furthermore, more than one-fourth of youngsters in families with smartphones were unable to utilise it.
- Impact on Jobs: Since the outbreak of the epidemic, there has been a drop in labour force participation in India, particularly among women.
- During the same time period, the unemployment rate increased from 7.5 percent to 8.6 percent, implying that among those seeking for work, those who are unable to find work, maybe at lower earnings, have increased.
- Among those who have work, a rising number are engaged as casual wage labourers.
- The increasing “casualisation” or “contractualisation” of the workforce suggests a scarcity of well-paying, productive jobs.
- Political empowerment is the first and most important component of poverty eradication. People with political clout will seek and receive improved education and healthcare.It will also help to reduce structural inequality and sectarianism in society.
- Employment Generation: A major factor for growing inequality is the slow expansion of manufacturing industries such as textiles, clothing, autos, and consumer goods.
- Manufacturing that requires a lot of labour has the ability to absorb millions of people who are abandoning farming, whereas the service industry benefits the urban middle class.
- Mitigating Pay Inequality: According to the International Labour Organization (ILO), a minimum wage floor should be established in a way that balances the needs of employees and their families with larger economic issues.
- Increasing Access to Basic Needs: Given India’s rising inequality, the route that public policy should now follow is clear; there is a need to disseminate health and education considerably more evenly among the people. Inequality may be greatly decreased by giving universal access to publicly financed high-quality services such as public health and education, social security payments, and employment guarantee systems.
- Nordic Economic Paradigm: The existing neoliberal model may be replaced with the ‘Nordic Economic Model’ to make wealth redistribution more egalitarian. This Model includes comprehensive welfare safety nets for everybody, transparent governance, the basic right to great education and healthcare, high taxes on the wealthy, and so on.
- Wealth Redistribution: The World Inequality Report 2022 proposes imposing a modest progressive wealth tax on multimillionaires. Given the high concentration of wealth, simple progressive taxes can produce enormous income for governments. A global effective wealth tax of 1.2 percent on fortunes over $1 million may yield 2.1 percent of global income in revenue.
It is apparent that the Covid-19 epidemic has had a greater impact on the most disadvantaged members of society, particularly in terms of employment and education. To provide these groups with a fair playing field in the labour market, concerted efforts are necessary to ensure enabling conditions for them to be educated and employed, as well as social security guarantees. Furthermore, super-rich wealth taxes and a vigorous redistribution scheme might halt, if not reverse, the current trend of growing inequality.
How to structure:
- Give an intro about inequality in India. Use a report to support your argument
- Give the reasons for it and examine the causes
- Suggest measures