Rising Inequality

What is the issue?

Indian Prime Minister leads the “largest ever” Indian contingent to the World Economic Forum 2018 in Swiss Alps town of Davos.
With 'rising global inequality' being an important agenda in the meet, it is imperative to reflect on the inequality scenario in India.

How (in)equal is India?

Credit Suisse Global Wealth data for India in 2017 highlights that 73% of the increase in wealth in India went to the top 1%.
India now has around 100 billionaires, the number having gone up from nine in 2000.
Notably, 37% of India’s billionaires have inherited wealth.
There are only 4 women billionaires and 3 of them inherited family wealth.
India is currently shining for its top 1% and arguably also for its top 10%.
It needs to spread this to the middle 40% and most of all to its bottom 50%.
Notably, these bottom proportions comprise largely of the Dalits, Muslims, tribals, and women, making it a social inequality as well.

How serious is inequality?

Global inequality is rising to unprecedented levels, at rates not seen during the last 100 years.
It is worrying because it makes economic growth unsustainable, corrodes politics and undermines democracy.
It is also leading to a breakdown of the social contract, as people end up in violence, crime and corruption as ways to get rich.
In this context, this year’s agenda for WEF includes “sustainable and inclusive economic development”.
Indian Prime Minister's keynote address at the forum is on “Creating a Shared Future in A Fractured World”.
To make it meaningful, India should devise means for sharing the wealth of its top 1% with its underprivileged bottom sections.

What should the government do?

Jobs - The government should formulate measures to promote inclusive growth.
It must be ensured that the income of the bottom 40% grow faster than that of the top 10%, to narrow the current income gap.
Some of the ways for achieving this include:

Tax- Government must take stringent measures against tax evasion and avoidance.
The super-rich could be taxed by re-introducing inheritance tax and increasing the wealth tax.
Corporate tax breaks could be reduced and eventually done away with.
Data - Lack of availability data has allowed inequality to creep up to such high levels in India, going unnoticed by the policymakers.
It thus calls for the government to collect and make available, regular and high quality data on income and wealth.

Source: The Indian Express