Inequality can no longer be ignored
Inequality can no longer be ignored
Addressing inequality is also about questioning the nature of growth itself — which is now unequal — and ensuring that jobs are generated
image down to earth
evidence to show that inequality in India has been rising
The World Inequality database
found that in 2022-23, 22.6% of the national income went to the top 1%, the highest ever since 1922.
Wealth inequality is even more stark with the top 1% population having 40.1% share in wealth.
As an election issue is welcome
todays condition
1 The unfairness of some people and a few corporates doing so well while most of the population continues to struggle for decent employment opportunities is becoming more and more obvious.
2 The logic of trickle down and of supporting ‘wealth creators’ so that more jobs are created and prosperity spreads has failed time and time again not just in India but across the world also.
trickle down
benefits given to people at the top of a system will eventually be passed on to people lower down the system.
3 The futility of continuing to depend only on economic growth even at the cost of increasing inequality, for improving the lives of people
Tax redistribution
1 India not only has a low tax-GDP ratio compared to other middle-income countries (India’s tax-GDP ratio is 17% compared to 25% in Brazil)
but also a regressive taxation structure, where indirect taxes contribute to almost two-thirds of all tax revenue collection.
regressive taxation - low- and high-income earners pay the same dollar amount.
2 direct taxes are not very progressive
For example, the effective tax rate (tax to profit ratio) according to the Receipt Budget 2023-24 was 19.14% for companies that had more than ₹500 crore profit before taxes
compared to an effective tax rate of 24.82% for companies in the group of 0-₹1 crore profit.
Welfare spending ,social sector is low.
Public spending on health
for instance is still around 1.3% of GDP whereas the National Health Policy (NHP) targets achieving 2.5% of GDP by 2025.
Despite COVID-19, we have not seen any such massive increases in health expenditures, and going by the current trend, we will not achieve this target.
other major budgetary allocations of the Union Government
such as for the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), education, budget for children, show a decline as a proportion of the total expenditure or of GDP.
nature of growth itself
1 In a situation where the major source of livelihood for people is through employment, how far can growth that does not generate jobs contribute to development?
2 The kind of growth we have experienced recently has been one that has been accompanied by joblessness as witnessed by a declining employment elasticity of output. Further, there is a rise in profit shares and stagnant / low real wages.
3 The discussion, therefore, has to be on generating employment — not distress self-employment but decent jobs with adequate remuneration.
what we should do ?
1 more equitable growth
For this, we have to focus attention on more equitable growth where the purchasing power of people also increases.
2 Governments can play a role in this by spending on programmes such as the NREGA and the Public Distribution System.
3 Cash transfer schemes such as the Mahalakshmi scheme proposed in the Congress manifesto can also contribute to this.
Job creation
filling vacancies
governments can also contribute to directly creating jobs by filling up all existing vacancies and expanding much needed public services in health, education, nutrition and social security.
adequate wages and improved work conditions.
The quality of jobs, such as of anganwadi workers, accredited social health activists and other frontline workers, also need to be improved with adequate wages and improved work conditions.
These direct job creation efforts
will create
- employment opportunities for many, especially women,
- improving human development outcomes
- reduce the burden of unpaid care work on women and free them up for other employment.
unequal access to services
Further, they can also address the inequality in opportunities and the intergenerational inequality that gets perpetuated due to the unequal access to services such as pre-school education and nutrition during childhood.
An employment-centered growth pattern
1 government policy focuses on supporting small and medium enterprises that are more labour-intensive in nature,
2 promoting skill training and overall human capital (health and education)
3 enabling women to participate
in the labour market through measures such as maternity entitlements, childcare, transportation, safe and affordable accommodation and so on.
Source the hindu
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