Home Opinion column Widening gap between rich and poor

Widening gap between rich and poor

0

By Satish Singh

The gap between the rich and the poor is continuously widening in the country. According to the latest data of the World Inequality Report, which has been released by a France based Lab, only one percent of the people account for about 20 percent of the country’s total national income in the year 2021. On the other hand, the lower half of the population is getting only 13.1 percent of the total national income. According to this report, the benefits of economic reforms and liberalization in India have been received by only the top one percent of the economically well-off people. The people of the lower strata have become poorer because of this.

This report keeps a close watch on the development of inequality in the world. It has been said in this report that the gap between poverty and inequality in India is continuously widening. The report also said that in the year 2021, one percent of the rich in India have 22 percent of the total income of the country, while the top 10 percent of the rich have 57 percent of the total income, while in the year 2020, the top 10 percent and the income gap for the lower 50 percent of the population was 1 to 22 percent.

The national average income of the adult population in India in the year 2021 is Rs. 2,04,200 per annum. However, the report also said that the national average income serves as a cover for inequality figures. This hides the real state of inequality and the government & a certain chunk of population are happy to see the average income figures, because by the help of such figures, they hide their inefficiency.

The analysis of the report shows that India is one of the countries with the highest inequality in the world. Among the BRICS countries, South Africa and Brazil have higher income inequality than India. The income gap between the top 10 percent and the bottom 50 percent in South Africa is 63 percent, while in Brazil the gap is 29 percent. The difference between China and Russia is 14 percent, while globally the rich 10 percent of the total population still account for 52 percent of global income, while the bottom 50 percent of the population has only 8.5 percent of the income.

If seen, the current situation of inequality in India has remained the same since the year 2018, because in the 2018 too, as per World Inequality Report, the top one percent of India occupied 22 percent of the total income, while in the year 2014 the top 10 percent of the rich had occupied about 56 percent of the national income. These figures show that the distribution of income between the rich and the poor has remained more or less the same level since 2018 till now.

Despite this, it will not be an exaggeration to recognize that the wealth inequality in India is widening. Today, 50 percent of the families of the lower strata have almost negligible wealth. The middle class is also relatively poor and holds 29.5 percent of the total wealth, while the top 10 percent have 65 percent and the one percent have 33 percent of the total wealth.

The average wealth of the people in the country is $4,200, which translates to about Rs 3,45,000 considering the current value of one dollar to be ₹75, while the average wealth of the middle class is $26,400, which is approximately ₹.19,80,000. The top 10 percent have an average of $2,31,300, which is approximately ₹1,73,47,500, and the one percent have an average of $6.1 million, which is about ₹45,75,00,000.

According to this report, the level of inequality in India is higher than in the British period. At that time the top 10 percent of the population accounted for about 50 percent of the total national income. After independence, this share came down to 35 to 40 percent.

Inequality of income and wealth has increased across the world due to liberalization policies since the mid-eighties. The top one percent benefited the most from economic reforms, while the middle and low-income groups benefited less and poverty remained in the same level. It is noteworthy that in this report questions have also been raised on the transparency of the data released by the government.

Some states like Bihar, Jharkhand, Odisha, Madhya Pradesh, Uttar Pradesh etc. are significantly affected by the problem of malnutrition. Due to poverty, the cases of malnutrition are increasing continuously in these states. According to the 2011 census, there were 472 million children in the country, out of which 97 million were malnourished. At present, this number has increased even more. After being exposed to malnutrition, the ability of children to fight diseases or their body’s immunity gradually weakens and the child succumbs to diseases like measles, pneumonia, jaundice, malaria etc. India’s position is very bad among countries with high population of malnourished children.

About 833 million people reside in rural India. There is no other option except agriculture in the form of employment in rural area. In the absence of cottage and medium industries, the dependence of the people is on agriculture only, due to which the situation of pseudo-employment remains in the agriculture sector. Many people are working together to do the work of one man. It has become difficult today to arrange bread for two times from farming.

On the other hand, in this country with a population of about 139 crores, the dream of most people’s sweet home is not being fulfilled. Most of the people are going to the die without their home. In the lifetime, the home of such people are roads, footpaths, parks, uninhabited areas etc. Oxfam’s Time to Care study also says that Indian billionaires have more wealth than the total budget of the country. These one percent of the richest people have more than four times more wealth than 70 percent of the country’s low-income population, i.e., 973 million people.

In such a situation, it is necessary that by showing sensitivity on the World Inequality Report, the government should take effective measures to bridge the widening gap between the poor and the rich, otherwise in the coming days this gap will become even wider, which will not be good for the poor and the government. 

(Author is Chief Manager at State Bank of India, Mumbai. The views expressed are personal opinion of the author. He can be reached at satish5249@gmail.com and singhsatish@sbi.co.in.)

NO COMMENTS

Leave a Reply Cancel reply

Exit mobile version