Examining steps taken by India to reduce Income inequality:

♤ Social protection is a cushion for those at the bottom against the effects of inequality. Social protection policies play an important role in reducing poverty and inequality and supporting inclusive growth by boosting human capital. However, India fares poorly in case of social protection measures. The global average on social spending is 8.8% of GDP. Among BRICS nations, India spends the lowest proportion of public expenditure on social protection around 4%, while the highest is Brazil with 21.2%.

♤ The performance of existing protection measures is dismal in terms of access, quality and equity. Health, education and nutrition schemes face great challenges.

♤ Taxation policy is critical in income redistribution. Regressive tax code and complex tax structure has resulted in widespread tax evasion in India. The redistributive role of fiscal policy could be reinforced by greater reliance on wealth and property taxes, more progressive income taxation, removing opportunities for tax avoidance and evasion. Government is in the process to reform the tax code in India. However, the rate of reforms is dismal. Direct tax code, Goods and Services tax proposals are still awaiting the approval by the Parliament.