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Income Inequality- What Does It Mean For India?

While the phenomenon of inequality remains the most debated in the recent times, a widening gap between regular and casual workers in the last decade is worrisome…

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Income Inequality- What Does It Mean For India?
Income Inequality- What Does It Mean For India?

India is no stranger to income inequality, but the gap is widening further. Oxfam’s recent report ‘Public Good or Private Wealth’ has shown that India's richest 1% held 73% of the country's total wealth, which was higher than the global average of about 50%.

Global Inequality ‘Morally Outrageous’

While the phenomenon of inequality remains the most debated in the recent times, what the report highlights is worrisome- a persistent and widening gap between regular and casual workers in the last decade.

Oxfam International Executive Director Winnie Byanyima, earlier this year at the World Economic Forum, said that it is "morally outrageous" that a few wealthy individuals are amassing a growing share of India's wealth, while the poor are struggling to eat their next meal or pay for their child's medicines. "If this obscene inequality between the top 1 percent and the rest of India continues then it will lead to a complete collapse of the social and democratic structure of this country," she added.

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Cost Of Inequality In India May Be High, But Doing Nothing About It Is More Expensive

The shift towards salaried work also accounts for a reduction of poverty. This has also come to mean a shift from the farm sector to a non-farm sector. The Wire article says that the casualisation and informalisation of employment that the country is witnessing may have created informal work with low pay with little training and social security, but this will exacerbate wage inequality and lower social mobility.

Schemes In India Sound Ambitious But Don’t Deliver: Oxfam Chief Winnie Byanyima

In an interview with The Caravan magazine, Oxfam’s Winnie Byanyima noted the major factors giving rise to inequality in India. She said that the government is facilitating a huge accumulation of wealth at the top. While India’s tax system is reasonably progressive on paper, taxes on wealth go largely uncollected in practice. “It is worth noting that a large number of India’s billionaires come from rent-thick sectors, such as real estate, infrastructure, mining, telecom, cement and media. And there is, undeniably, a huge problem with corruption that saps resources that could have been spent to address inequality.”

Women Plantation Workers Live In Abysmal Condition, Get Poorer Wages

While India added 17 new billionaires last year, raising the number to 101 billionaires, daily wage earners are still fighting for minimum wages. Tea plantation workers in Assam are paid only Rs. 167 per day as cash wage which is almost half of the State minimum wage. This piece focuses on their abysmal living conditions, struggle for decent work and minimum pay.

Five Reasons We Need to Worry About Inequality Now

In India, the poor get poorer because their share of the national wealth is getting smaller and smaller. Despite this, the central government continues to hold the view that a higher rate of economic growth will alleviate poverty. However, macroeconomic indicators like gross domestic product (GDP), or per capita income are insufficient to measure growth because they assume that the total national wealth is percolating to the lowest levels. Economic and Political Weekly lists out essential reads to understand the correlation between inequality and poverty.

Why Income Inequality In India May Be Fuelling Populist Politics

In 1989-93, barely 13% of Indian respondents said incomes should be made more equal. By 2010-14, this figure had increased to 48%—the highest in the world. The latest round of the World Values Survey (2010-14) also asked respondents whether they thought “an essential characteristic of democracy is that the state should make incomes equal". Again, India, along with Turkey, had the highest share of respondents (32%) who replied in the affirmative. This factor has paved way for populist politics in India, argues the Mint article.

Impacts of Poor Health and Safety Conditions on Vulnerable Workers

A WDI and Oxfam case study brings to life the issues faced by vulnerable workers employed in multiple sectors and companies across India, including multinational companies registered with the Bombay Stock Exchange (BSE). The case study highlights the extremely poor health and safety conditions for informal workers (also known as contract workers), who form a major part of the workforce in India. A key finding of the case study is that investors cannot rely on regulation by government to ensure that companies are managing health and safety risks, as this regulation does not apply to workers in the informal sector, so workers lack the protection of an employment contract.