Incompleteness of discussions on Inequality
By Manohar Manoj
Not only are adverse reports coming from many non-government national and international agencies regarding economic inequality in India, but government agencies and NITI Aayog fully accept this fact. Therefore, despite the expected economic progress in India, inequality has increased much more unexpectedly. One figure that attracts everyone’s attention is that the wealth of the super-rich one percent of the country increased by 65 percent. In contrast, the wealth of sixty-five percent of the country’s population increased by only one percent. It means the wealth of the rich people is increasing at the speed of a rocket and the wealth of the majority of the poor is increasing at the speed of a bullock cart.But the irony is that the discussions being held on inequality in India are not based on holistic solutions but are being served from one-sided and individual viewpoints. By the way, the socio-economic structure in India has been such that there has been a world of difference in the pace of increase in wealth and income of the upper class and the pace of increase in income and property of the lower class workers and the lower middle class. However, after the new economic policy, this difference increased further. We can easily see this difference between upper castes and lower castes, between agriculture and industry, between urban and rural populations, between organized class and unorganized class workers. But at the same time, the truth is that before the 1990s the income of the rich class was increasing a little but the income of the lower class was not increasing at all. During this period, the new environment that the economy has achieved in the country in the last three decades has affected the income and wealth of the upper class and rich class handsomely and the development achieved at the lower levels also did reach through percolation, but in many places and at times it became a victim of the flaws and imperfections of the system.Regarding the current inequality, on a larger scale, an explanation is coming forward from many economists that even in a communist country like China; inequality has increased rapidly due to the rapid economic development during the last four decades. Similarly, in Brazil also the uneven pace is more than in India in this period. In such a situation, it is not unnatural for inequality to increase in a period of rapid economic progress in India too. The second explanation being offered by economists is that the share of taxes in India has been much more progressive and equitable than before. In this sequence, it is being said that before the nineties, the contribution of tax in the GDP in the country was less and due to this, inequality could not be stopped effectively due to the government allocation towards poverty alleviation and public welfare programs being very inadequate. The uprising of the market economy, which replaced the planned economy, was considered more fruitful when the governments should increase their growth rate and in this sequence, if the pace of progress of the middle and upper class increases at a faster rate, then it should not be considered as an adverse element but focused only for increasing their tax revenue. Then through increased tax revenue, the government should allocate more resources on the development of the informal sector and human development.
This is the best way to eliminate inequality, which is by improving the income and consumption of the poor class.The second explanation being offered by economists is that the share of taxes in India has become much more progressive and equitable than before. In this sequence, it is being said that before the nineties, the contribution of tax in the GDP in the country was less than 12 percent. Secondly, till the year 2000, economists also believed that the higher share of indirect taxes in taxes compared to direct taxes encourages an inequitable economy. India’s current tax economy has become more progressive on both parameters.The share of taxes in India’s gross domestic product was around 12 percent till the 1990s, but that has now increased to around 17 to 18 percent, similar to developed countries. Secondly, the share of direct taxes in the gross tax income, which used to be 45-48 percent during this period, has now gone up to 58 percent as per the figures given in the new budget. If we talk about direct taxes, the contribution of equitable income tax has been the highest at 36 percent.It is a different matter that this situation arose from the fact that a policy of reducing the tax rate and widening the base of taxpayers was adopted. Due to this, the number of people filing income tax returns in the country has also doubled in the last decade. The contribution of GST and corporate tax are 27-27 percent each and central customs duty is 9 percent. All these standards are factors that curb inequality in the country at the macro level.But if seen at the micro i.e. family level, inequality in India is not only an economic concept but also a big social concept. Regarding Indian society, it is believed that in the social pyramid here, only the socially superior castes are at the top, which are also economically advanced. After that, in descending order, one has a place in that pyramid according to his socio-economic status.The provision of political-administrative reservation was made the biggest measure in removing socio-economic inequality in India. This was a parameter that remained a major discourse of India’s democratic politics and has become a permanent part of it. In this sequence, a new elite class was born among the socio-economically backward Dalit group in the country, which has been mainly advocating this reservation system. Through this, a new block of inequality has arisen within these classes.In this sequence, the recent decision of the Supreme Court can be seen in which it was said to highlight sub-groups i.e. creamy layer in the Dalit class like backward castes.The so-called political discourse of removing inequality through reservation is so prevalent in the Indian political social system that the agenda of economic, social empowerment and comprehensive human development has been overshadowed and due to this, a long-term roadmap could not be prepared to effectively curb inequality in India. Secondly, it was observed that even if this system of reservation was to be kept operational, then imposing it only on the government sector and depriving the private sector of it is against the principle of level playing. This is a problem with the existing system in India which is playing an important role in continuing or increasing inequality in the country.According to new data, the ratio of government jobs in India is only 16 compared to 77 per thousand in America and 57 per thousand in China, the rest are employed through self-employment or private sector. In this regard, the government has made a five-year plan to provide about four crore jobs in the private sector of the country in the coming years through skill development, company internship, and government contribution towards employee provident fund.In such a situation, there is an urgent need to bring this powerful political missile of reservation into the vast private sector along with the government.Inequality in the country, whether it is economic or social or based on the worrying levels of per capita income, consumption, human development and gainful employment as per the standards of modern economics, is continuously increasing.Secondly, in the political discourse of inequality in India, the political voice of opposition to the capitalists is more resonant, which has been nourishing the status quo instead of fundamentally and actually reducing the inequality in the country. Fundamentally, when we discuss the structured and established inequality in India on the basis of inheritance or succession, it has not been possible for the government to eradicate it despite progressive taxation and etc. In fact, it is not within the power of the existing political-administrative system to eliminate legacy-generated inequality, but the basic structure of system-generated inequality can be changed through policy and systemic changes.But, the irony is that neither the government nor independent planners are coming up with the vision to attack the huge setup of system-generated inequality that is being created day by day in the country.
The biggest irony regarding inequality is that in India, the supreme preamble of the Constitution, ‘Equality of Opportunity’ is hugely being violated and the result of this we have the greatest inequality. The huge banyan tree of inequality that is becoming a giant in our country get founded on five factors, our education system, health system, labor policy, employment policy and social security policy. Due to the multi-layered and discriminatory rules, policies, programs and structures on these five important factors, many types of worlds are being created and expanded in India. On these five points, many types of social classes are being created in India every day and our system keeps doubling the gap of inequality in India day and quadruple before our eyes.If the governments have a uniform policy, an environment, an ecosystem and a collective vision on these five points, then in the coming days, the nature of the Indian society would rapidly move towards an egalitarian society. Then, through the behavioral doctrine of poverty alleviation i.e. the trickledown theory of development that would see through to the entire population of the country and development would have been ensured to them, just as it happened in the countries of the American and European continents.
