Why India can’t afford to ignore rising economic inequality? Here’s what can be done | Oxfam EXCLUSIVE

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Published: April 8, 2019 7:03:45 PM

The government spending on health, education and social protection in the country is low and more often than not, subsidises the private sector.

While India ranks among the fastest growing economies in the world, at the same time, a large section of its population is struggling to survive on margins. Rising economic inequality has become an important issue for overall development of the country with the focus being shifted to ‘inclusive growth’ in the past years.

Investment in public infrastructure (especially social infrastructure) and education, progressive taxation, better labour laws, taxation on wealth like inheritance are some of the measures that can help address the issue of rising inequality, Oxfam India CEO Amitabh Behar said to Financial Express Online.

High inequality in India

In India, the wealth of top nine billionaires equal the wealth of the bottom 50 percent. Further, 10 percent of the population holds over three-quarters of the total national wealth, according to a study released by Oxfam earlier in January this year.

Reducing the rising inequality is a challenge that requires sustained government interventions, which are weak till now as the country ranks 147 among 157 countries in terms of the government’s commitment to reduce inequality, according to the Oxfam International’s Commitment to Reducing Inequality (CRI) Index 2018.

More than 170 million people would be lifted from poverty if inequality in India is reduced by a third, according to the calculations by Oxfam.

Here’s what’s wrong

The government spending on health, education and social protection in the country is low and more often than not, subsidises the private sector.

India is a labour abundant country, however, over the years, successive government policies favoured capital over labour, noted the first India Inequality Report by Oxfam India. Moreover, while the share of profits have risen in the organised manufacturing, the share of wages have fallen.

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Oxfam India’s second India Inequality Report released in March 2019 further pointed out towards the increase in the employment of informal workers in the organised sector, worsening rural distress and growing wage inequality in the country.

The government needs to break the vicious circle of poverty which causes inequality, which in turn not only adversely affects sustainable economic growth but also breeds various socio-economic problems. For this, jobs creation and employment will be the key strategy, according to the report.

 

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