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Social Justice

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February 12, 2018

Rising economic inequality is a major threat to social stability. Discuss the factors that foster inequality and suggest measures to reduce inequality. (200 words)

Refer – Business Line  

Enrich the answer from other sources, if the question demands.

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IAS Parliament 6 years

KEY POINTS

·        As Oxfam reported, the top one percent of the world increased their wealth by $762 billion while the bottom 50 per cent saw no growth, increasing the divide between social classes.

·        This kind of economic inequality can result in unfair political institutions, unfair control by a few wealthy over others and unfair workers’ laws.

·        We can reduce these inequalities by reducing poverty by putting the most vulnerable population in a growth trajectory.

Factors fosters poverty

·        Lack of women participation – As IMF Chief Christine Lagarde recently said, if women’s participation in the workforce matched men’s, India could grow at 27 per cent per annum.

·        McKinsey reported in 2016 that women contribute only 17 per cent of India’s GDP, and estimates that India could add $700 billion to its GDP in 2025 by closing this gap.

·        Least importance given to Agriculture – As per the World Bank, agriculture can help reduce poverty for 80 per cent of the world’s poor who live in rural areas and work mainly in farming.

·        It further states that 65 per cent of the poor working adults make a living through agriculture.

·        Lack of minimum wages and unemployment

Solutions

Investing in women

·        More family-friendly work policies, such as

a)     Paid parental leave

b)     Creating an environment where kids are allowed in the workplace

·        Men should take equal responsibility in raising kids and managing household chores.

Investing in agriculture

·        Providing farmers with a bundle of services like access to seeds, plant nutrients and production practices are critical.

·        But today, climate smartness and climate resilience also need a special focus.

·        We should focus on risk mitigation mechanisms like weather insurance and risk prevention mechanisms.

Reforming workplace laws

·        Reforms in workers’ laws can reduce inequalities.

·        Minimum wages and universal basic income (UBI) are two of the popular ways to reform workplace laws.

·        Minimum wages should have inflation adjustment and a premium for inequality reduction.

·        UBI envisions that everyone receives a monthly pay packet from the state that covers their basic needs.

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