In this article, we will discuss Inequality in India (Brief Overview). So, let’s get started.
Inequality in India
- Constitutional Provisions to Tackle Inequality: There is a constitutional mandate in India to reduce inequality – Articles 38 and 39 of the Directive Principles of State Policy (DPSP) mandate a policy path.
- Article 38(1): “The State shall strive to promote the welfare of the people by securing and protecting as effectively as it may a social order in which justice, social, economic and political, shall inform all the institutions of national life.”
- Article 39 (c): The State shall, in particular, direct its policy towards ensuring that the operation of the economic system does not result in the concentration of wealth and means of production to the common detriment.
- India Specific Findings of Oxfam Report:
- Inequality of Wealth: During the Covid-19 pandemic, the report reveals, more than half the world’s new poor are from India, 84% Indian households have suffered a loss of income, with 4.6 crore people falling into extreme poverty.
- In this period, the richest 142 people have more than doubled their wealth to more than ₹53 lakh-crore.
- Decline in Social Security Expenditure: As Covid continued to ravage India, the country’s healthcare budget saw a 10% decline from RE (Revised Estimates) of 2020-21.
- The budgetary allocation for social security schemes declined from 1.5% of the total Union budget to 0.6%.
- Increasing Fiscal Deficit: Lowering corporate taxes from 30% to 22% to attract investment last year (2020) resulted in a loss of Rs 1.5 lakh crore, which contributed to the increase in India’s fiscal deficit.
- Factors of Inequality:
- Budgetary Decline: India is one of the few countries in the world where during the Covid pandemic the health Budget has declined — and that too by a huge 10% in 2021.
- Social security expenditure has declined from an already low 1.5% in 2020-21 to 0.6% of the Union Budget in 2021-22.
- It is at this end of Budget allocations where people are deprived of the most basic services and entitlements and are unable to survive.
- Even after increasing allocations in the first phase of the pandemic, allocations were frozen, and budgets were slashed in Budget 2021-22.
- Inequality in Salaries and Allowances: Social security pensions, for the elderly, for the disabled, and widows have been frozen at ₹200-₹300 a month for almost 15 years.
- However, in contrast, there has been an increment in the salaries and pensions of the policymakers.
- The increase for one crore central government employees and pensioners has cost the exchequer more than the total social security pension budget for 3.3 crore beneficiaries.
- Unavailability of Subsidized Foodgrain: The priority list of households under the National Food Security Act (NFSA) has been frozen in absolute numbers, based on a percentage determined from the 2011 Census.
- In the last 11 years, population increases amounting to approximately 10 crore eligible beneficiaries have been kept out.
- Therefore, approximately 12% legally entitled people — even children of existing “priority households” — cannot get subsidized foodgrain.
- Unequal Access to Education: The pandemic has also produced a generation of children who have forgotten what formal education is. Many teenagers from poor households have already joined the workforce.
- In this period, there has been a 6% cut in the education Budget. Relying on online teaching, accompanied by Budget cuts, amounts to the institutionalization of endemic multidimensional poverty.
