In recent years, the discourse surrounding inequality in India has been marked by a paradoxical phenomenon: while evidence of stark economic disparities and social injustices abound, there exists a pervasive denialism regarding the extent and impact of inequality within the nation. This phenomenon, aptly termed “Inequality Denialism,” reflects a reluctance or refusal to acknowledge the depth of inequities that permeate Indian society. Despite rapid economic growth and strides in development, India remains plagued by glaring wealth disparities, unequal access to resources, and systemic barriers that perpetuate social exclusion. A closer examination of this phenomenon unveils not only the multifaceted nature of inequality but also the intricate mechanisms through which it operates, challenging prevalent narratives of progress and prosperity.
Tags: GS paper 1 – Society, GS Paper – 3, Economy- Inclusive Growth- Inequality
For Prelims: WEF, GDP, GST, Growth, GHI score, Global Gender Gap Report, OECD, Mahatma Gandhi National Rural Employment Guarantee Act Scheme (MGNREGA), National Rural Health Mission (NRHM), Pradhan Mantri Jan Dhan Yojana
For Mains: Recent Economic Growth Trajectory of India, Inequality Trends in India, Increasing Inequality in India, Inclusive Growth, Steps to Achieve Inclusive Growth in India.
Context:
- Despite India’s ongoing economic growth, inequality persists, raising questions about the effectiveness of current strategies to address this issue.
- Recently, the President of the World Economic Forum predicted India’s future as a $10 trillion economy and the benefits of this growth are not reaching everyone, particularly marginalised groups.
- The predominant focus on economic expansion in India is prompting growing apprehension, highlighting the necessity for policy measures and enhanced governmental efforts to promote inclusive growth.
The Recent Economic Growth Trajectory of India:
- FY 2022/23: FY 2022/23 witnessed India’s real GDP expanding by an estimated 6.9%, driven by robust domestic demand, increased government-backed infrastructure investment, and strong private consumption, particularly among higher-income groups.
- FY 2023/24: In FY 2023/24, the growth in real GDP is estimated at 7.3%, slightly higher than the previous year’s 7.2%. India has ascended to the 5th position in the global GDP rankings for 2024, with the country’s economy now valued at $3.7 trillion. This marks significant growth from a decade ago when India held the 10th position with a GDP of $1.9 trillion.
- Future prospects: Future prospects indicate that the Indian economy is on track to reach $7.3 trillion by 2030 and is projected to hit the $10 trillion mark by 2035, as stated by the Centre for Economics and Business Research. The Indian government has set an ambitious target of elevating India to the status of a ‘developed country’ by 2047.
What are the Inequality Trends in India?
- Wealth Inequality: India exhibits significant wealth inequality, with the top 10% of the population holding a staggering 77% of the total national wealth. Meanwhile, the richest 1% commands 53% of the country’s wealth, leaving the poorer half to contend for a mere 4.1% of national wealth.
- Income Inequality: India ranks among the most unequal nations globally, as highlighted in the World Inequality Report 2022. The top 10% and top 1% of the population hold 57% and 22% of the total national income, respectively, while the share of the bottom 50% has dwindled to 13%.
- Tax Burden on the Poor: A disproportionate burden of approximately 64% of the total goods and services tax (GST) falls on the bottom 50% of the population, contrasting sharply with the mere 4% contributed by the top 10%.
- Healthcare Accessibility: Many ordinary Indians struggle to access essential healthcare services, with an alarming 63 million individuals (almost two every second) being pushed into poverty annually due to healthcare expenses.
- Food Security and Nutrition: The State of Food Security and Nutrition in the World, 2023, reveals that approximately 74% of India’s population cannot afford a healthy diet, while 39% fall short of a nutrient-adequate one.
- Hunger Index: India’s Global Hunger Index (GHI) score for 2023 stands at 28.7, signalling a serious level of hunger severity according to the GHI Severity of Hunger Scale. Notably, India records the highest child-wasting rate at 18.7.
- Gender Inequality: India ranks 127 out of 146 countries in the Global Gender Gap Report, 2023, underscoring persistent gender disparities. Additionally, the issue of “missing women” from the workforce persists, presenting a complex and enduring challenge.
The Causes of Increasing Inequality Despite High Economic Growth in India:
- Wealth Accumulation:
- Concentration of Wealth: When wealth is concentrated in the hands of a few, inequality can persist across generations, as the affluent can transmit advantages to their offspring.
- Inadequate Land Reforms: Insufficient land reforms can leave a significant portion of the population landless or with inadequate land, rendering them susceptible to poverty and economic insecurity.
- Crony Capitalism: Nepotism and corrupt practices can foster the accumulation of wealth among a select few, exacerbating inequality.
- Lack of Inclusive Growth Policies:
- Skewed Distribution of Economic Gains: Economic growth may disproportionately favour specific sectors or income brackets, leading to an unequal distribution of wealth.
- Regressive Taxation Policies: Tax systems that favour the wealthy or lack progressivity can contribute to income inequality.
- Lack of Social Safety Nets: Inadequate social safety nets and welfare programs may leave vulnerable populations without adequate support, widening the wealth gap.
- Inadequate Labour Policies:
- Financialization of the Economy: Prioritising financial markets and speculation over productive investments can concentrate wealth in the financial sector.
- Wage Gaps: Disparities in wages between skilled and unskilled labourers can contribute to income inequality. Informal labour markets with lower wages and fewer benefits can further widen the income gap.
- No Minimum Wages: Weak labour market regulations, including insufficient minimum wage standards and limited collective bargaining rights, can exacerbate income disparities.
- Social Exclusion:
- Caste Discrimination: Caste-based social exclusion has played a significant role in perpetuating inequality by marginalising certain groups and restricting their access to opportunities, resources, and benefits.
- Gender Inequality: Gender-based discrimination can result in unequal access to employment opportunities and wage discrepancies.
- Lack of Access to Education: Unequal access to quality education limits opportunities for upward mobility, reinforcing existing disparities.
- Technological Deprivation: Automation and technological advancements can lead to job displacement and stagnant wages for certain groups, worsening income inequality.
Several schemes implemented by the government for inclusive growth:
- Mahatma Gandhi National Rural Employment Guarantee Act Scheme (MGNREGA)
- Prime Minister’s Employment Generation Programme (PMEGP)
- Pt. Deen Dayal Upadhyaya Grameen Kaushalya Yojana (DDU-GKY)
- Deendayal Antyodaya Yojana- National Urban Livelihoods Mission (DAY-NULM)
- Samagra Shiksha Scheme 2.0
- National Health Mission
- Swachh Bharat Mission
- Mission Ayushman
- Pradhan Mantri Jan Dhan Yojana
Steps should be taken to Achieve Inclusive Growth in India:
- Promote Inclusive Framework:
- Uphold Constitutional Provisions: Ensure the enforcement of constitutional guarantees of equality, as enshrined in fundamental rights, through effective policy measures. Rigorous implementation of government policies aimed at reinforcing these rights is essential.
- Implement Progressive Taxation: Introduce progressive taxation measures in India to mitigate income inequality, ensuring that individuals with higher incomes contribute a greater proportion of their earnings towards taxes.
- Utilise Wealth Tax: Implementing a 1% wealth tax on Indian billionaires could sufficiently finance the National Health Mission, India’s largest healthcare initiative. Additionally, levying a 2% tax on India’s billionaires could fund nutrition programs for the country’s malnourished population for three years.
- Promote Inclusive Governance: Foster inclusive governance by promoting citizen engagement, enhancing transparency, and combating corruption. Empower local self-governing bodies and involve marginalised communities in decision-making processes.
- Encourage Private Sector Participation: Promote corporate social responsibility (CSR) initiatives aimed at inclusive development. Encourage private enterprises to invest in social sectors and support community development projects.
- Enhance Access to Basic Necessities:
- Universal Public Service Access: By guaranteeing universal access to publicly-funded, high-quality services such as healthcare, education, social security, and employment guarantee schemes, significant strides can be made in reducing inequality.
- Employment Opportunities: Leveraging the labour-intensive manufacturing sector’s potential to absorb millions transitioning from agriculture, alongside ensuring equitable benefits from the service sector, particularly benefiting the urban middle class, can foster inclusive growth.
- Women’s Empowerment: Promote gender equality in education, employment, and entrepreneurship to empower women both economically and socially, thereby contributing to overall societal equity.
- Social and Financial Inclusion:
- Land Reforms: Implementing comprehensive land reforms to address issues related to land ownership and tenancy, facilitating fair and equitable distribution of land resources.
- Promoting Civil Society: Amplify the voices of historically marginalised groups by enabling civil society organisations such as unions and associations within these communities, ensuring their active participation in decision-making processes.
- Technology and Innovation: Embrace technological advancements to create new avenues of opportunity for all segments of society. Ensure that the benefits of technological progress are shared inclusively across various social strata.
Conclusion:
Thus, through the adoption and execution of inclusive policies addressing the root causes of inequality, India can pave the way for a more equitable society. This transformative strategy resonates with the objectives outlined in the United Nations’ Sustainable Development Goal 10, underscoring the nation’s potential for meaningful progress towards societal equity.
UPSC Civil Services Examination, Previous Year Question (PYQ)Â
Prelims
Q:1 Inclusive growth as enunciated in the Eleventh Five Year Plan does not include one of the following: (2010)
(a) Reduction of poverty
(b) Extension of employment opportunities
(c) Strengthening of capital market
(d) Reduction of gender inequality
Ans: C
Mains:
Q:2 COVID-19 pandemic accelerated class inequalities and poverty in India. Comment. (2020)
FAQs
Q: What is inequality denialism?
Inequality denialism refers to the refusal or reluctance to acknowledge the existence or severity of inequality within a society. It often involves downplaying or dismissing statistical evidence and lived experiences that demonstrate disparities in income, wealth, opportunity, and access to resources among different social groups.
Q: Is inequality really a significant issue in India?
Yes, inequality is a significant issue in India. Despite economic growth and development, India continues to grapple with deep-seated disparities across various dimensions such as income, education, healthcare, and social status. These inequalities are evident between different socioeconomic groups, castes, genders, and regions.
Q: What are some common arguments used by inequality denialists in India?
Some common arguments used by inequality denialists include claims that everyone has equal opportunities to succeed, that poverty is solely due to individual laziness or lack of effort, and that government welfare programs are sufficient to address any inequality present. They may also argue that focusing on inequality diverts attention from other pressing issues or that inequality is simply a natural outcome of a meritocratic system.
Q: How does inequality denialism impact policymaking and societal progress?
Inequality denialism can hinder efforts to address systemic inequalities by perpetuating myths and misconceptions about the nature and causes of inequality. This can lead to inadequate policy responses and a lack of targeted interventions to uplift marginalized communities. Furthermore, denialism can contribute to social unrest and undermine trust in institutions, ultimately impeding societal progress and cohesion.
Q: What can be done to combat inequality denialism in India?
Combatting inequality denialism requires a multifaceted approach involving education, public awareness campaigns, data-driven advocacy, and inclusive policymaking. It’s crucial to amplify the voices of those affected by inequality and to provide accurate information and evidence-based analysis to counteract false narratives. Additionally, fostering empathy and solidarity across different social groups can help build momentum for collective action towards creating a more equitable society.
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