less poor and more equal country

Towards a less poor and more equal country

The twin objectives of high economic growth and reduction of inequality can only be achieved with improvements in human development and poverty reduction

In March, World Inequality Lab

1 a global research centre focused on inequality and public policies, published a working paper titled, ‘Income and Wealth Inequality in India, 1922-2023: The Rise of the Billionaire Raj’. 

2 The authors — Nitin Kumar Bharti, Lucas Chancel, Thomas Piketty, and Anmol Somanchi — 

3 combined data from national income accounts, wealth aggregates, tax tabulations, rich lists, and surveys on income, consumption, and wealth to present their results.

Income and wealth inequality

First, let’s look at income inequality. 

1 By 2022-23, the report states, 22.6% of India’s national income went to just the top 1% in the country, the highest in the last 100 years.

2  And just the top 0.1% of the population earned nearly 10% of the national income in India. 

3 The share of the top 1% in the national income is among the highest in the world.

In terms of wealth inequality

1  the share of the top 1% in wealth was 40.1% in 2022-23, the highest level since 1961. The share of wealth among the top 10% increased from 45% in 1961 to 65% in 2022-23. 

2  Conversely, the share of the bottom 50% and middle 40% in wealth declined. 

3 . “About 10,000 individuals out of 92 million Indian adults own an average of ₹22.6 billion in wealth, 16,763 times the average Indian,” the report states.

4 India’s wealth inequality is not as extreme as Brazil and South Africa where the top 10% hold 85.6% and 79.7% of the national wealth, respectively. 

4 However, its wealth concentration increased threefold between 1961 and 2023.

5  Additionally, as India’s income inequality is among the highest in the world, even higher than South Africa, Brazil and the U.S., it will only add to the wealth inequality.

wealth concentration क्या है ?

1 The report says between 2014-15 and 2022-23 “the rise of top-end inequality has been particularly pronounced in terms of wealth concentration”.

2  अंग्रेजों के राज से तुलना और क्या नुकसान

 It states that “the ‘Billionaire Raj’ headed by India’s modern bourgeoisie is now more unequal than the British Raj headed by the colonialist forces.” Inequality undermines both growth and reduction of poverty.

इतिहास कैसा रहा inequality का 

1 Between 1960 and 1980, inequality was dropping

2 However, inequality began increasing with the beginnings of liberalisation in the 1980s, and faster after the 1991 economic reforms in India.

3 वियतनाम और चीन से तुलना.

🍁 India’s average income adjusted for inflation and purchasing power differentials were on a par with China and Vietnam until 1975. 

मुद्रास्फीति और क्रय शक्ति अंतर के लिए समायोजित भारत की औसत आय 1975 तक चीन और वियतनाम के बराबर थी।

🍁In the next quarter century, incomes in China and Vietnam increased by 35-50% compared to incomes in India. 

🍁Post-2000, China’s income started to grow at an astonishing rate and became 2.5 times India’s income. 

🍁. In 2022, the share of the top 1% in income in India was nearly 50% higher than that of China.

🍁 The Chinese economy has been maintaining a higher growth rate over the years with a moderate growth in economic inequality while India’s growth has been moderate coupled with extreme growth in economic inequality. 

🍁 So we can achieve  both Target by improvements in human development and poverty reduction.

भारतीय राज्यों की विकास यात्रा और मानव विकास 

1  At the national level, the States that sustained high growth over three decades (over 7% GSDP per year) were relatively advanced in human development. 

2 These include Kerala, Tamil Nadu, Andhra Pradesh, and Karnataka in the south; Maharashtra and Gujarat in the west; and Punjab and Delhi in the north. 

3 States that are relatively backward in the Human Development Index ranking include Jharkhand, Chhattisgarh, Bihar, Madhya Pradesh, Odisha, Uttar Pradesh, and Rajasthan. 

These States were only able to register a growth rate of less than 5% per annum post-liberalisation.

Human development

The Human Development Report (HDR) 2023-2024

 ranked India 134 out of 193 countries. India is now the fifth largest economy 

but it still ranks lower than Sri Lanka, Bhutan, and Bangladesh in human development. .

Enclusive growth 

 In the absence of improvement in human development, enhancement of capability and functioning, and poverty reduction, the growth process cannot be inclusive and will only add to inequality. .

As per the HDR 2023-2024, India’s score comes down by 31.1% if we account for economic inequality.

इस विषमता को कैसे दूर किया जा सकता है

 The extent of economic inequality is such that it cannot be overcome by the Pradhan Mantri Garib Kalyan Anna Yojana, which provides a few kilogrammes of free foodgrains to about 81.35 crore beneficiaries.

 Sops without jobs cannot be the basis for sustained and inclusive growth.

Source the hindu