Other Impacts of Inequality
♤ The growing income inequality in India has negatively impacted poor citizens' access to education and healthcare.
♤ Rising income inequality makes it difficult for the poor to climb up the economic ladder and increases their risk of being victims to poverty trap.
♤ Worldwide, the human cost of inequality is devastating. Today:
o 262 million children will not be allowed to go to school.
o Almost 10,000 people will die because they cannot access healthcare.
o 4 billion hours of unpaid care work will be done, the majority by women in poverty.
♤ Inequality is destabilizing. For instance, in recent years we have seen a rise in authoritarianism by governments worldwide, with crackdowns on freedom of speech and democracy. We have also seen a rise in popularity for right-wing, racist, sexist views and authoritarian politicians who support them. Many have pointed to the link between this global trend and high levels of inequality.
♤ Inequality undermines our societies. It is bad for everyone, not just the poorest people. In more unequal countries, trust is lower and crime higher. Unequal societies are more stressed, less happy and have poorer mental health.
♤ Inequality makes the fight to save our planet from climate breakdown even harder. Oxfam has shown that the average carbon footprint of the richest 1% globally could be as much as 175 times higher than that of the bottom 10%.
2.7. Role of Government in Reducing Inequality
Current crisis of inequality is the direct result of the moral failure of present governance and market system which allows few persons to accumulate extreme wealth while masses languish in poverty. Such exclusive, highly unequal society may seem sturdy and inevitable in short term, but eventually it will collapse. Eventually the pitchforks will come out, and the ensuing chaos will not benefit anyone – not the wealthy people, and not the poorest people who have already been left behind. To avert this existential crisis, steps must be taken to not reward greed at the expense of future. The present system must be replaced with a new economic framework – what Oxfam has called a more ‘Human Economy’, which recognizes that justice and inclusion are not the result of economic prosperity, but rather the cause of economic prosperity.
Governments face a stark choice today – a choice between a life of dignity for all their citizens or continued extreme wealth for a tiny few. The lesson is clear: to beat poverty, we must fight inequality.
2.8. Steps Taken to Tackle Income Inequality
♤ Government of India has taken various steps to reduce income inequality-
o Progressive taxation policy which taxes the rich more.
o Land reforms and redistribution of surplus land after independence.
o Various social security measures such as pensions, subsidized foodgrains through PDS etc.
o Introduction of the three pronged Jan Dhan-Aadhaar-Mobile programmes aimed at a comprehensive strategy of inclusion, financial empowerment and social security.
o Minimum wage rates have been revised upwards from time to time.
o Provision of free of cost education and health services, however, these services need significant improvement.
♤ Beyond extreme poverty: A focus on the bottom 40: Sustainable Development Goal 10 presents to the international community the following task: ensure that the income growth of the bottom 40% of their population is higher than the national average by the year 2030.
♤ The World Bank in 2013 introduced shared prosperity, defined as the growth in the average income or consumption of the poorest 40 percent of the distribution in the population, as one of the twin goals, along with ending extreme poverty.
2.9. Way Forward
Specifically, policy measures in three areas will be critical:
♤ Inclusive growth and the expansion of productive employment.
♤ Redistribution of incomes and assets.
♤ Pro-poor macro-economic policies.