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Inequality in India extends arm to areas like education, health: Report

Author: IANS/Friday, February 23, 2018/Categories: Economy

Inequality in India extends arm to areas like education, health: Report

New Delhi - Inequality in India has been rising since 1991 (post-liberalisation) and extended beyond just being income and consumption gap, to non-income dimensions like education, health, nutrition, sanitation and opportunities, a report released said.

And traditionally marginalised groups such as Dalits, tribals and Muslims have been further relegated to the boundaries, added the report by Oxfam India, which cited Forbes data to give a glimpse of the country's gaping inequalities. For instance, the wealth held by Indian billionaires has increased by almost 10 times over the past decade. 

Currently, the billionaires who are less than 100 in number, hold among them a total wealth which is 15% of the country's GDP. This figure was 10% five years ago.

Four out of 10 Indian billionaires have inherited their wealth, it noted. 

"In 2010, 27 out of 69 Indian billionaires accumulated their wealth from ‘rent thick' sectors (which require natural resources or depend on the state for licenses). The real-estate billionaires joined the club between 2005 and 2010; they have also enjoyed the fastest rates of accumulation of their wealth," the report noted.

It said that while rent-thick billionaires accounted for 43% of all billionaires, the wealth they owned accounted for 60% of total billionaire wealth. 

"Clearly, the wealthiest in India have made their fortunes from crony capitalism, rather than through innovation or the rules of the market. The ways in which they benefited were clear when various scams, such as the 2G spectrum scam and the coal scam, came to light," it added.

The report said that the story of rising inequality in India is "as much about rising income inequality as it is about inequality in non-income dimensions" such as education, health, nutrition, sanitation and opportunities.

"The burden of these disparities is not borne uniformly across groups. There are clear indications of differences in access and opportunities by groups in economic and other parameters. Historically marginalised groups such as Dalits, tribal groups and Muslims are disadvantaged in the access to wealth but also in access to basic services," it said.

Noting that societies with higher inequality tend to have poorly functioning public services, the report pointed out that this is reflected in India's "ridiculously low social sector expenditures on education and health".

It said that the trend of rising inequality has received far less attention in the Indian context despite a clear rising trend since 1991, contending that this is partly because a lot of focus on income distribution has remained limited to poverty rather than inequality. 

"A much larger reason for this has been the belief that inequality is less of a problem in an economy which is growing so rapidly. In some ways, popular writing on inequality has justified rising inequality as a necessary by product of growth in developing countries," the report said.

"There is now a growing concern that the development trajectory in the post-liberalization era has been a period of ‘jobless growth'. Despite a booming economy and increasing labour force, the process of job creation has been extremely sluggish," it added.

Concerns about rising inequality have been flagged by the World Bank, International Monetary Fund (IMF) and the Asian Development Bank. Reducing inequality has also been added as one of the Sustainable Development Goals (SDG) adopted by the United Nations.

"This recognition of the inequalising effect of economic growth has also been acknowledged by policymakers, who have shifted their discourse from economic growth alone to ‘inclusive growth'," the report said.

Also, gender inequality has risen too, it said, noting that decline in workforce participation rate of women during 2004-11, when the economy grew at its highest rate, provides ample evidence of the growing marginalisation of women from the growth process.

The report has urged the government and the policymakers to look at experiences of many other countries which show that inequality can be reduced through public action.

"India has much to learn from these experiences in ensuring financial inclusion and tax compliance, removing corporate loan waivers and tax exemptions, introducing wealth and inheritance taxes, and enacting legislation to provide access to the basic entitlements of the citizens," it said.

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