Growing inequality is one of the world’s seven biggest threats mentioned in the recent 72nd U.N General Assembly’s statement. Analyse India’s economic growth in that context.
Refer - Business Standard
IAS Parliament 8 years
KEY POINTS
· The richest 1% of the world’s population now control up to 40% of global assets, while the poorest half owns just one per cent.
· Despite, India’s high growth rate, its people still suffer from the menace of economic inequality.
· The richest 1% of Indians now own 58.4% of the country’s wealth which makes India the highest unequal country in Asia.
· High economic growth rates are not reducing inequality.
Factors causing Inequality
· Market deregulation and liberalization – unregulated market forces and unmindful liberalization drives the concentration of wealth and fuels the extreme inequality.
· Skewed growth pattern – disguised unemployment in slow growing agriculture, more number of skilled jobs in emerging service sector.
· High unequal asset distribution – concentration of agricultural lands in the hands of few big landlords.
· Inadequate employment generation (increase in employment opportunities remained less than the rise in the labour force)
· Less government spending on Health and education with respect to growing GDP.
· Differential regional growth.
· Absence of ground level representatives in order to discuss about inequality, instead narrow interested elites will work for their self gains.
Solutions
· Reducing asset inequality through redistributive land reforms through ceiling on land holdings and inheritance taxes.
· Raise taxation for the wealthy.
· Push for multilateral institutional framework to oversee the global governance of international tax matters.
· Increase government spending in public services and social protection schemes.
· Ensuring that governments and institutions represent citizens rather than organized business interests.
· Strong agriculture-friendly policies that benefit both small farmers and landless workers, in order to curb distressed migration from rural areas.
· Urban growth has to be based on labor-intensive industrialization, so that enough jobs exist for both people who leave rural areas and the millions working in the informal sector.
