GROWTH MANIA CAN BE INJURIOUS TO SOCIETY

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THE CONTEXT: There is a growing concern of rising inequality in India amidst the frequent mention of exponential growth of the economy. The recent statement by the World Economic Forum (WEF)’s President that India is a $10 trillion economy in the making is one of the most recent of predictions on the future size of India’s economy.

MORE ON THE NEWS:

• There are instances of constant comments on achieving high growth in economy by leaders of the country. For example, in 2019, upon returning to office, Prime Minister said that India aimed to become a $5 trillion economy by 2024. This also includes the Chief Ministers of Uttar Pradesh and Tamil Nadu.
• Though these leaders represent political parties with widely differing social agendas and ideologies, they seem united in their economic goals.
• Though, this has not materialised yet but has not deterred other political leaders from making predictions of, or expressing an aspiration for, a $1 trillion economy for their States.
• However, alongside this there is issue of unequal growth due to rising inequality in India.

WHAT IS INEQUALITY?

The United Nations describes inequality as “the state of not being equal, especially in status, rights and opportunities”.

Inequality can be broadly classified in to:

• Economic inequality: Economic inequality is the unequal distribution of income and opportunity between individuals or different groups in society.
• Social inequality: It occurs when resources in a given society are distributed unevenly based on norms of a society that creates specific patterns along lines of socially defined categories. For example, religion, kinship, prestige, race, caste, ethnicity, gender etc. have different access to resources of power, prestige and wealth depending on the norms of a society.

ISSUES

• Rising inequality: The most important issue to note about the recent growth in India is that it has been accompanied by growing inequality. It is important to recognise that this trend is not new. Having commenced in the 1980s, it picked up in the next decade, after which it has been unstoppable. It has, by now, reached levels that make India one of the more unequal societies in the world.
• Inadequate Data: The government agencies appear reluctant to supply data which creates difficulty to provide precise estimates of this inequality. But the world’s leading inequality researchers are very likely right in describing India as “a poor country with an affluent elite” highlighted as per ‘World Inequality Report’, 2022.
• Democracy goals: The growth dominates the economic agenda in democracies recently rather than addressing the legitimate aims. This bears mentioning, as a democracy is also meant to deliver other things than only unequal growth.
• Standard of living: Growth is an aspiration in India but given that the majority of the population is yet to attain a reasonable standard of living, there is a need to address the basics. The point highlighted is that a large economic size may not do much by the way of levelling the income of the presently excluded ones.
• Lacunae in Rural wage data: One of the reliable sources of data on wages is that on rural wage rates published by the Labour Bureau. These are based on actual market quotations rather than responses given to surveys. Also, unlike data gathered from income-tax records, which have value in determining the distribution of income, the wage data can convey information on the level of living at the bottom of the pyramid. A weakness of the Labour Bureau data, however, is that it presents data on wages of male workers alone. The absence of data on women workers is a serious omission as women have historically constituted approximately half the workforce in the cultivation of certain crops.
• Stagnant real wage: The Sixth Economic Census of India (2013-14) reports that 51.7% of the employed are in rural India, and, of these, the overwhelming majority (68.9%) are non-agricultural workers. It is estimated that the real wage rate has grown by 4.6% over the nine years from 2014 to 2022-23. This implies that for about 35% of India’s workforce, real wages have not grown since 2014. So, even though there is growth of the economy, per capita income at the bottom of the pyramid is not rising.

THE WAY FORWARD:

• Ensure Constitutional Provision: Enforcement of Constitutional Guarantee of equality as enshrined in fundamental rights. Articles 14, 15 and 16 form part of a scheme of the Constitutional Right to Equality. Article 15 and 16 are incidents of guarantees of Equality, and gives effect to Article 14.
• Promoting Civil Society: There is a need to promote civil society groups like unions and association to address the issue of rising inequality in India.
• Voice to Vulnerable groups: There is a need to provide a greater voice to traditionally oppressed and suppressed groups. For example, Scheduled castes and Scheduled tribes should be motivated to become entrepreneurs and there should be initiatives for women empowerment.
• Strengthen government policies: There is a need to strengthen government policies like schemes like Stand up India need to be expanded to widen its reach by increasing funding. For gender equality policies affirmative action can be taken by reserving seats in legislatures, increasing reservation at Local self government, strict implementation of The Equal Remuneration act,1976 to remove wage gap.
• Progressive Taxes: There is a need to implement progressive taxes on wealthy and by increasing the effective taxation on corporations, more importantly broadening the tax base through better monitoring of financial transactions.
• Economic Policies: By ensuring universal access to public funded high quality services like Public health and education, social security benefits, employment guarantee schemes; inequality can be reduced to great extent.

• Employment Generation: The failure to grow manufacturing sectors like Textile, Clothing, automobiles, consumer goods etc. is the important reason of rising inequalities. The Labor-intensive manufacturing has the potential to absorb millions of people who are leaving farming while service sector tends to benefit majorly urban middle class.

THE CONCLUSION:

It can be concluded that the growth in India is unequal and it is not in the spirit of democracy to have such divergent economic outcomes. Governments need to ensure that its policies address these causes and ensure inclusive growth.

PREVIOUS YEAR QUESTION

Q. Inequality has risen substantially from the 1980s onwards, due to profound transformations in the economy such as deregulation and the reforms of 1990s. Comment. (2019)

MAINS PRACTICE QUESTION

Q. Despite high economic growth, there are persistent issues of rising income inequality in India. In this context, discuss the causes of income inequality in India and suggest measures to address it.

SOURCE: https://www.thehindu.com/opinion/lead/growth-mania-can-be-injurious-to-society/article67790032.ece