Growing Wealth inequality doesn't bode well for India's Future - Background Context
The policy entire world has observed the ripples as a result of Oxfam publishing its Annual Inequality assessment before the World Economic Forum to be held at Davos.
Every year, this report sizes and mentions astonishing increases in global wealth inequality-gap over the years. Currently, the report constituted that the richest 1 percent (1%) of the world has quite double the wealth of 6.9 billion people altogether.
This magic figure of 1 percent (1%), the world’s all top billionaires, together make only 2,135 people, but they have more wealth and finances than that of the lower category of 4.6 billion people united together.
India seems to fit very well into this equation of inequality gap that is growing aggressively each year.
Enough to mention, these figures point to an issue serious enough for the International Monetary Fund (IMF) to speak out, provoke and encourage resolving inequality, to guard long-term economic prosperity and growth.
India’s top nine billionaires own a lion’s share amount of wealth, equivalent to the lower class 50% of India’s crowd. To put it into calculations, it would take approximately 22k years for an average female worker to accumulate the amount equivalent to the payout received by India’s tops tech CXOs.
There has been a series of luxurious debates, talks, surveys, and studies around, the topic and its relation to the country’s growth. It is the needs time to understand the seriousness of the growing inequality gap and what it means for the future of the Indian youth.
Reasons for concern thanks to growing Inequality
- Oxfam report, if considered as a reliable indicator, then an unequal and uncertain present implicitly hints at an aggressive (mounting) more unequal future, that establishes within it some of Indian society’s major failing.
- Unfortunately, the load of inequality continues to be majorly borne by India’s women: They still are tasked with bearing the load of care work, and take on average, 352 minutes each day for this task. In contrast, men put in just 51.8.
- By assigning women unpaid care work, we concurrently suppress and hold back their entry into the labour class.
- Periodic Labour Force Survey (PLFS) 2017-18 showcases a substantial dip in women’s work participation or engagement rate, down to a mere 16.5 per cent (16.5%), while unemployment figures for the nation's economy comprehensively, continued to climb up.
- This is a major reason for worry mainly because it hints, that lesser and lesser women are partaking in India’s labour force, and even those who actively participate now find themselves without jobs and lack of work.
- At a time when rectifying the gender wealth gap is based on increasing women’s incomes, this economic perspective only points to the deepening and widening of this gap as millennial women suffer both ways i.e. underpaid and underemployed.
- Growing wealth inequality is additionally signalling the increase of the long and well established and rentier class which looks to strengthen their fixed assets (land and property) to generate the best and potential rents from tenants and leases.
- For India’s millennial professionals, this scenario suggests that urban cities still turn very expensive, and the likelihood of truly buying a home early in their career turns from optimistic to bleak to the least possible.
- Reserve Bank of India (RBI) assessment and study (2019) asserts that housing affordability has notably deteriorated and floored in the last four years, it's logical and predictable, how millennials rather prefer to rent an apartment and address their housing requirements, instead to contract the ever-increasingly unaffordable load of high monthly EMIs.
- However, presently lack of housing demand could also be signalling income (if not wealth) inequality being exerted away to its very limits.
Symptoms of Growing Inequality
- Current social-economic turmoil and nationwide student protests should be categorised as hints of ever-increasing economic inequity.
- The absence of upward trends and the extreme and dramatic economic slowdown have only aggravated existing communal tensions.
- It is mainly for this cause and reason that we must make sure, that the campaign surpasses just economics, and infiltrates the general public conscience.
- By magnifying social spending, changing the gendered perspective towards care work, and making sure the rich pay their share of taxes, we could take appropriate action and set measures towards this goal.
- Doing so would be important and crucial towards resolving, not only the harsh and blinding an inequality of this but also the looming threat of an intensified unequal future.
- Oxfam also mentioned governments are heavily under-taxing the wealthiest individuals and organizations and failing to gather tax revenues that would help take away the responsibility of care from women and help fight poverty and deeply rooted inequality.
- Moreover, the government agencies also are underfunding crucial and important public services and required infrastructure that would help diminish women and girls’ workload, the report mentioned
India’s richest 1% hold fourfold more finances than 70% of the poor: Oxfam
India's elite richest 1 per cent (1%) has quite four-times the wealth held by 953 million people altogether, that structure for the bottom 70 per cent of the nation's population, while the complete wealth of all Indian billionaires (put together) goes ahead of a full-year budget, as mentioned by the new study.
‘Time to a Care’, the assessment study being published here before the 50th Annual Meeting of the World Economic Forum (WEF).
According to one global survey, the top 22 richest men on our planet have more wealth than all the women of the African continent.
It further mentioned that women and girls are employed for 3.26 billion hours of unpaid and least thankful care work every day.
Outside of, direct public investments within the care economy of two per cent of GDP might create 11 million fresh new jobs and groundwork for the 11 million jobs being lost in 2018, the report said.
As the report asserts (proclaims), higher spending on welfare may substantially reduce this burden. But once again, India continues to share out a mere 5 per cent (5%) of its GDP towards health and education.
Repercussion of Inequality
- The social and economic repercussion of inequality is extreme and widespread:
- A growing sense of unfairness in all walks of life,
- The insecurity of employment and regular income,
- Loss of individual identity, self-respect and dignity,
- Bleak social fabric and outreach,
- Diminishing trust and worthiness in institutions,
- Dissatisfaction and disappointment with political processes,
- Erosion of Social engagement and ties.
- Inequalities tend to trigger social discomforts among the social groups e.g. Major caste groups like Jaat (Haryana and Uttar Pradesh), Maratha (Maharashtra), Patel (Gujrat) are asking for reservations in education and employment, however, this demand is challenged and scrutinised by other communal and caste groups, already claiming the benefits of reservations, such conflict and collision of interest due to inequality tend to erupt violent collision and clash between opposing caste groups.
- Perceived inequalities among ethnic and communal groups had witnessed varied ethnic revolts in past, mostly demanding separate regions (states) or autonomous geographical regions or maybe separation from India. North East region (seven sisters of India) of India, has been rocked by a varied number of such ethnic revolts e.g. by Nagas demanding for greater Nagalim region.
- Religious inequality tends to get a feeling of rejection and banishment among religious minorities. This lowers their inclusion in the mainstream. India has a large population of religious minorities and such economic rejection and embargo lower the GDP growth of India as a whole.
- Penurious development indicators can be linked to socio-economic inequalities, these indicators areas such as…
- Infant Mortality Rate (IMR)
- Maternal Mortality Rate (MMR)
- Early school drop-outs and lower education
- The unskilled education system and its outcome in school
- Higher birth rate and population growth
- High economic inequality is directly linked to public education and healthcare. The more fortunate Upper class and moderate fortunate Middle class, show the least investment interest in well-developed public education and well-practised healthcare system, as they need methods and ways to access private education and healthcare.
The divide between fortunate (rich) and poor (less fortunate) cannot be determined or settled without an intentional inequality-favouring framework and policies, and too few governments are pledged to resolve these.
Women and girls stand last in the queue, or the slightest to benefit from today’s financial system and instruments.
Women and girls, spend tons of hours cooking food for the family, cleaning houses, and caring for younger and elderly family members. These billion hours of are being spent on care work that goes unnoticed, unpaid care work is the ‘unpolished gems’, the strong support of country economies, businesses and social ties.
Businesses and Governments must accommodate coordinated efforts for fair opportunities and chances to succeed, framework and policies for socioeconomic mobility and equality.
Making the elite and richest people of the society pay just 0.5% extra tax on their accumulated wealth over the next decade (10 years) would enable the investment required to generate 117 million jobs in healthcare, education reforms and childcare.
The government essentially, should prioritise care work and provide the necessary platform, framework and policies and importance, equivalent just to any other sector to create more citizen-centric economies, that are inclusive to everyone regardless of their socio-economic situation and not just the favoured and chosen.
Oxfam mentioned, that their calculations and analysis are built and stand on the newest data sources available, which includes data and information from, Global Wealth Databook 2019, Credit Suisse Research Institute’s and Latest Forbes 2019 Billionaires List.