GS-2: Development Processes and the Development Industry

GS-3: Inclusive Growth and issues arising from it.

Key phrases - Inequality, World Inequality Report

Why in news-

World inequality report released their latest report

Analysis:

What does the report suggest?

• India stands out as a “poor and very unequal country, with an affluent elite”, where the top 10 per cent holds 57 per cent of the total national income while the bottom 50 per cent’s share is just 13 per cent in 2021
• Drop in global income during 2020, with about half of the dip in rich countries and the rest in low-income and emerging regions
• India’s middle class is relatively poor with an average wealth of only Rs 7,23,930 or 29.5 per cent of the total national income, as compared with the top 10 per cent and 1 per cent who own 65 per cent (Rs 63,54,070) and 33 per cent (Rs 3,24,49,360),
• Global inequalities seem to be about as great today as they were at the peak of Western imperialism in the early 20th century. The poorest half of the global population “barely owns any wealth” possessing just 2 per cent of the total, whereas the richest 10 per cent of the global population own 76 per cent of all wealth
• Middle East and North Africa (MENA) are the most unequal regions in the world, whereas Europe has the lowest inequality levels,
• Even as countries have become richer over the last 40 years, their governments have become significantly poorer, a trend which has been magnified due to the pandemic.

Why is this inequality dangerous?

• True democracy is not realized unless all sections can experience inclusive growth-some sections lie SC ST stuck in perpetual poverty
• 80% of the labor force stuck in informal employment-GDP growth suffers-low productivity trap
• Inequitable growth causes resentment and separatist tendencies-North East is one prime example so is naxal infested Dandakaranya region
• Cause of economic and social ills-chronic alcoholism, a cycle of poverty
• Women labour participation at 27%-not realizing human potential and letting go the demographic capital which we have with worlds youngest population
• India has world’s highest burden of malnutrition-almost 33% children under 5 are stunted
• Poor development indicators like IMR, MMR, low per capita income, lower education and learning outcomes at schools, high rate of population growth can be traced to existing socio-economic inequalities.
• Inequalities tend to produce social conflict among the social groups e.g. caste groups like Jats, Maratha, Patels are demanding reservations but this demand is opposed by caste groups already claiming the benefits of reservations.

Why does such inequality persist?

• As per the Multidimensional Poverty Index 2018, India lifted 271 million people between 2005-06 and 2015-16. Still, despite the massive gains, 373 million Indians continue to experience acute deprivations.
• Blind focus on GDP while life indicators like human development index, happiness index, hunger index are extremely poor
• Regional inequalities, traditional structures like caste which bind few sections to subordination of minority few
• Poor spending on human development-3% on edu,1.5 on health
• We have large labour force but its use is sub optimal and almost 80% is stuck in informal jobs
• Stagnation of agriculture where 55% population depend with a growth of 2-3% per annum and contribution just 16% to GDP
• Lack of identification of target beneficiaries leading to leakages and corruption
• Burden of inequality continues to be borne by India’s women: They continue to be tasked with bearing the burden of care work, and spend — on average, 352 minutes a day for this purpose. In contrast, men put in only 51.8

Indian inequality goes beyond wealth and then radiates to wealth

• Global Hunger Index 2020: Has placed India 102nd position Much behind Bangladesh and Pakistan-FAO estimates 15% of India’s population is malnourished
• MMR-Kerala 46, Assam 237; IMR-Nagaland 12, MP 47
• Quality of life- World Happiness Report 2020: India ranks a very low 144th out of 156 countries -Human Development Index (HDI) for 2019: India ranked 131 among 189 countries
• Environment- Composite Water Management Index 2018 (NITI Aayog): Nearly 70% of water is contaminated, India is placed at 120th amongst 122 countries in the water quality index
• Unequal workforce distribution: 58% of the workforce in India is occupied in agricultural but the contribution of agricultural and related sectors in the GDP is around 14%-92% of India works in informal sector
• Gender inequality -GII India 123/162 countries-women are paid 34% less than men-women just hold 2% of assets in India and only 12% land -Same report says it may take 200 years to close gender inequality gap in economic spheres- SDG 2030 goal to be missed
• Infrastructure-Kerala has 1 hospital bed/850 while Bihar has 1 bed for 6k people

What is Government doing?

• MNREGA giving employment to one person from each family for guaranteed 100 days
• POSHAN 2.0 to tackle malnutrition and end inter-generational cycle of inequality
• Reservation for SC/ST/OBC in legislature, colleges, government jobs
• Schemes like Jal Jeevan mission to ensure tap water to every household by 2024
• Pan India road/rail links-union budget 2020-100 lakh crore investment in infra over next 5 years through national infra pipeline-to achieve electrification of 27k km of rail tracks
• To address Housing Vulnerability: The Pradhan Mantri Awas Yojana (Urban) Programme-housing for all by 2022.
• Establishment of 14 AIIMS all over India

Success stories

• India lifted 271 million people out of poverty between 2006 and 2016 recording fastest reduction in multidimensional poverty -MPI 2019
• MPI value reduced from 0.283 in 2005-06 to 0.123 in 2015-16
• Bearing fruits- first time since independence, poverty percentage in some states now well below national average

Way ahead

• The right to health should be enacted as a fundamental right that makes it obligatory for the government to ensure equal access to timely, acceptable, and affordable healthcare of appropriate quality
• Increase health spending to 2.5 percent of Gross Domestic Product (GDP) to ensure a more equitable health system in the country; ensure that union budgetary allocation in health for SCs and STs is proportionate to their population
• Provide a greater voice to traditionally oppressed and suppressed groups, including by enabling civil society groups like unions and association with in these groups.
• Gender equality policies like affirmative action by reserving seats in legislatures, increasing reservation at Local self-government both at Urban and village level to 50% in all states, strict implementation of the Equal Remuneration Act,1976 to remove wage gap, making education curriculum gender sensitive
• Additional public resources for public services by progressive taxes on wealthy more and by increasing the effective taxation on corporations, more importantly broadening the tax base through better monitoring of financial transactions.
• Failure to grow manufacturing sectors like Textile, Clothing, automobiles, consumer goods etc. is the important reason of rising inequalities. The Labor-intensive manufacturing has the potential to absorb millions of people who are leaving farming
• There is a need to track what is happening in the poverty pockets of India. A periodic study may help policy makers to think about the issue more seriously and come up with better ideas to reduce inequalities

Source: Indian Express