Brain Booster for UPSC & State PCS Examination (Topic: Inequality Kills : OxFam Report)

Why in News?

  • The COVID-19 pandemic has heightened economic inequalities across the world. The pandemic led to the deaths of millions of people globally. It has also exposed the weakness of public health systems and social and income protections for people worldwide.

About “Inequality Kills” report

  • “Inequality Kills” is a report released in January 2022 by Oxfam, a U.K.-based consortium of 21 charitable organisations that have a global presence.
  • The report argues for sustained and immediate action to end the pandemic, address global inequality and initiate concerted measures to tackle the climate emergency.
  • The central argument of the report is that inequality is a death sentence for people that are marginalised by social and economic structures and removed from political decision making.

India’s Inequality Crises

  • As per the Forbes billionaires report, in October 2021, the collective wealth of India’s 100 richest hit a record high of USD 775 billion and more than 80% of these families saw an increase in their wealth as compared to 2020.
  • Approximately three-fifths of (61 %) of these billionaires added a whopping USD 1 billion or more to their collective wealth.
  • Meanwhile, 84 % of households in India suffered a decline in their income in the beginning of the pandemic. That wealth inequality is growing appears to be a reality.
  • Inequality is not natural, but is rather the manifestation of biased economic and social policies.
  • Changes in the structure of the economy or broader changes in non-economic, political, social, cultural, or other spheres have a major impact on inequality.

Progressive Taxation

  • Progressive taxation ensures that the tax burden is higher for the wealthy than it is for those with lower incomes.
  • The idea behind such a system is that it allows for the wealthy to in some sense, fund via taxes, a basic standard of living for lower-income families, paying for basics such as shelter, food, health, education and transportation among other things.
  • A progressive taxation system allows low income households to spend a significant portion of their meagre income on cost-of-living expenses, and as such is one of the least distortionary policy tools available to help control the rise in inequality by redistributing the gains from growth.

Deprioritising Social Spending

Health

  • The chronic neglect of the healthcare system in India is clear when one looks at the poor budgetary allocations to the sector made by successive governments.
  • The poor state of public-funded healthcare in the country has pushed the majority of the population to resort to the private sector to obtain healthcare.
  • Higher investment in healthcare and education could have reduced the spread of COVID-19.

Education

  • Education is critical in the fight against inequality.
  • Globally, countries with higher mean years of schooling tend to have lower income inequality.
  • Closures and mergers of schools have hit India’s poor and marginalised communities hardest.

Social Security

  • Expenditure on social security schemes for workers (under the Ministry of Labour and Employment) and the centrally sponsored scheme of National Social Assistance Programme is abysmally low at 0.6 percent of total union expenditure in 2021-22, or INR 20,574 crore, a decline from 1.5 percent of total expenditure from previous year.
  • The e-Shram portal, which aims to register all migrant and gig workers had only been able to register 24% of such workers.
  • Only 8% had heard of Ayushman Bharat and just 1% had a health card.

Way Forward

  • Recognise inequality is real and agree to measure it.
  • Redistribute India’s wealth from the super-rich to generate resources for the majority.
  • Generate revenue to invest in the education and health of future generations.
  • Enact and enforce statutory social provisions for informal sector workers.