India Is Getting Wealthier But Not Its Poor, Says Report
We as a country are certainly getting richer. According to a report by Oxfam India, the country is the sixth richest nation in the world. India owns $8,230 billion in wealth, a jump of 25 per cent from what it owned in 2016.
However, this might still not be the time to cheer.
The report, titled The Widening Gaps: India Inequality Report 2018, shows that the country’s richest one per cent people own 73 per cent of the country’s total wealth. The report suggests that it is because of the “lopsided” policies of the successive governments. The problem does not end here.
The report reveals that while the poor in India are getting poorer as the country’s billionaires are sitting on wealth that equals to 15 per cent of India’s gross domestic product (GDP) – five years back, the number stood at five per cent. This makes India one of the most unequal countries of the world.
In 2013, an Oxfam study had also revealed that the life expectancy difference between the richest and the poorest in the country is as high as 11 years.
Another study by the same organisation said that globally, over the next 20 years, 500 people will hand over $2.1 trillion to their heirs – a sum larger than India’s GDP, a country of 1.3 billion people.
Interestingly, India also ranked 81st in the recently released global corruption perception index. The report released by the Transparency International termed India as one among the “worst offenders” in terms of graft and press freedom. In 2016, India stood at the 79th position among 176 countries. In 2017, it is 81st among 180 countries.
Estimating the divide
India’s richest one per cent got to increase their income by over Rs 20.9 trillion in 2017 while 67 crore Indians saw their wealth rise by one per cent only. There are 101 billionaires in the country as of 2017 and 3.33 lakh high-net worth individuals which is the ninth highest in the world.
In the 1980s, the divide was stagnant while it increased by the 1990s and continued to surge until 2017.
"Specific policy choices which favoured capital rather than labour, and favoured skilled rather than unskilled labour, are part of the structure of the growth trajectory in India," the report says.
Oxfam India Chef Executive Officer Nisha Agrawal says, "These inequalities are the result of package of reforms adopted during the big bang liberalisation of 1991, and the subsequent policies adopted.”
“What is particularly worrying in India’s case is that economic inequality is being added to a society that is already fractured along the lines of caste, religion, region and gender. Apart from being a moral concern, reducing inequality is central to the functioning of India’s democracy,” says author of the report Himanshu.
How to mitigate income-led inequality?
Progressive direct tax collection such as wealth and inheritance taxes could help cut down on the inequality, say experts. The money thus collected should be used to up the health, education and nutrition standards of the poor, says Agarwal.
Who is the richest of them all?
Wealth (in $billion)
With inputs from Housing News