Context-Recent Report of Oxfam.
Recently,in its latest report,Oxfam said that Wealth of top 9 Indian billionaires is equivalent to the wealth of the bottom 50% of the population.Earlier according to "The World Inequality Report ,2018 " , Income inequality in India has worsened over the past three-and-a-half decades and the top 10% of earners now corner more than half of the country’s national income in 2016.The main cause of worry is the level of income inequality between states.Bihar is at the bottom in terms of per capita and Delhi is at the top.The main reason behind this difference is that the states which are performing well have done better on business as well as industrial front.
One of the reasons for national governments’ diminished ability to effectively tackle income inequality is the transfer of public wealth into private hands, says the report. Also, net public wealth (that is, public assets minus public debts) has declined in nearly all countries since the 1980s.This arguably limits government ability to regulate the economy, redistribute income, and mitigate rising inequality.
The only way to reverse this trend is to increase tax collection through progressive direct taxation as such as introducing wealth and inheritance taxes, and spending them on health, education and nutrition for the underprivileged, focusing especially on the early childhood development of the poor.
It needs to promote inclusive growth by ensuring that the income of the bottom 40 per cent of the population grows faster than of the top 10 per cent, so that the gap between the two begins to close. It can be achieved by promoting labour-intensive sectors that will create more jobs, investing more in agriculture and implementing fully social protection schemes. It needs to take stringent measures against tax evasion and avoidance.
India is currently shining for its top one per cent and arguably also for its top 10 per cent. It needs to spread this to the middle 40 per cent and most of all to its bottom 50 per cent, which largely consists of Dalits, Muslims, tribals, and of course, women.
India to tackle inter-state per capita inequality must focus on providing business-friendly environment by plugging the infrastructural bottlenecks and maintaing social capital.
