India, the world’s second most unequal Country

By Ambrose Pinto SJ

Bengaluru: In the midst of the hype that the country is moving into a superpower we are in the news again. But that news is no good news. We have been rated as the second most unequal country in the world after South Africa, according to a report by the Johannesburg-based company New World Wealth.

India has one third of world’s poorest, says World Bank. One in three of the world’s poorest people are living in India, claimed as the world’s second-fastest growing economy. We have a greater share of the poorest of the world than we did 30 years ago.

Then it was home to one fifth of the world’s poorest people, but today it accounts for one-third-400 million. 13, 40,000 children below five die in a year that is 3671 under five child deaths per day. Nearly half of all child deaths under five in India are attributed to under-nutrition. One in every 11 children in India is working, when they should be at school. More than half (56%) of the under five deaths occur within the first 28 days of life.

India accounts for more than three out of 10 stunted children in the world. 47% of the women in India are married when they are children (before the age of 18), and 30% bear a child when they are children (adolescent mothers). 17.7 million Children and adolescents are out of school. That is 14% of world’s population of children out of school. 20% of grade 2 children in India cannot recognize numbers 1-9; 53% of children drop out of school at elementary level. 49.5% of grade 5 children cannot do subtraction and 55% of grade 8 children cannot solve 3 digits by 1 digit division problem; 51.09% of grade 5 children cannot read grade 2 English and 25.4% children of grade 8 cannot read grade 2 text (Data from the Save the Child Campaign). A World Bank report has described malnutrition as India’s silent emergency.

The report says that the rate of malnutrition cases among Indian children is almost five times more than in China, and twice that in Sub-Saharan Africa. The problem of hunger is related to the violations of rights of the workers both in the organized as well as unorganized sectors. While India still has bonded labor, devadasi system, untouchability practices the workers in both the organized and unorganized sector are not paid according to the industrial growth. In spite of ban on child labour, child labor has increased.

Thomas Chandy of Save the Children said, “India’s status has gone down despite the economic growth; inequality has widened which makes the poor poorer. In child mortality, infant mortality and maternal mortality, India seems to have the largest populations in all these categories. We would like to see focused interventions [because] the most difficult areas remain untouched,” he said.

On the other hand with a total individual wealth of $5,600 billion, we are among the 10 richest countries in the world. Where then is the problem? The problem lies in the distribution of wealth. The richest 1% of the country own 53% of the country’s wealth, according to the latest data from Credit Suisse. The richest 5% own 68.6%, while the top 10% have 76.3%. At the other end of the pyramid, the poorer half jostles for a mere 4.1% of national wealth. While things have been getting better for the rich, they have been worse for the poor since more than a decade. The Credit Suisse data shows that India’s richest 1% owned just 36.8% of the country’s wealth in 2000, while the share of the top 10% was 65.9%. Since then they have steadily increased their share of the pie. In the USA the richest 1% own 37.3% of total wealth while in Russia the top 1% own 70.3% of the country’s wealth, a country more unequal then us though not as many poor as we have.

Reasons behind Inequalities

One of the most important reasons for the increasing inequalities is the policy of neo-liberalism followed by the state since 1991. In the name of globalization, liberalization and privatization the economy of the state has been handed over to corporations–national, multinational and transnational. Corporations exist for profits. They loot and plunder resources by displacing populations, damaging the environment and exploiting human labour. The worst sufferers are indigenous communities, the dalits and the tribals, the peasants and the farmers. The reforms of 1991 have led to destruction of rural economy leading to agricultural crisis. Farmers have been committing suicide and the numbers of suicides have been on the increase due to indebtedness. With the reforms farmers were encouraged to switch over to cash crops with manifold increase in costs which they could not handle. The situation is likely to become grimmer with the introduction of cashless economy with the poor unable to manage their daily existence without cash and with the absence of required facilities of banks and ATMs in rural areas. It is likely to be a disastrous future with the corporatization of the economy. The growth model has benefitted the big business houses but has failed the poor.

The widening gap between rich and poor around is a “ticking time bomb” threatening to explode into social and economic unrest if left unchecked, Nobel Peace laureate Muhammad Yunus had said. “Wealth has become concentrated in just a few places in the world … It’s a ticking time bomb and a great danger to the world,” said the founder of the microfinance movement that provides small loans to people unable to access mainstream finance. Indian state is determined to make India an investment destination with all incentives to corporations. However if the state does not have a policy to provide jobs to the vast section of the poor and the educated unemployed, who mostly live in the countryside by adopting a “trickle down” economic model we may experience growing violence. While on the one hand India cannot transfer its huge Indian population to cities and provide them good life with decent jobs, housing, clean water, good sanitation, on the other the educated unemployed have to be provided with jobs. Our cities cannot grow more than what they are.
Looking towards the future

India needs a “development” model that is people-centric, village-centric and employment-centric. It is possible to remove inequality by expanding the economy through millions of tiny enterprises and impetus to agriculture in the countryside. Small business units and agriculture can fruitfully employ people as well as sustain them. We need to protect our natural resources, mines and minerals from ultra-rich corporate entities that have displaced the poorest, mostly the indigenous people who have lived peacefully and nurtured and preserved these resources since ages. There needs to be end for exploiting them as cheap labor force for the industry and business units in the urban centers. That would mean that India needs to reject the reforms of privatization and liberalization. The corporations have no interests of the poor. While opposing corporate rule over the economy there is an urgent need for the intervention of the state in the amelioration of poverty to re-distribute money and power and level the playing field. The country needs impetus to small scale industries, agriculture and entrepreneurship. Taxation can play an important role in reducing inequality if the state decides to tax the rich and the corporations. The state needs to spend more on education, health and social protection. Investment in public services and social protection can tackle inequality. The country needs free, universal public services. India’s record on these has been poor. Our tax structure is not progressive. We spend 3% of GDP towards education and only 1.1% towards health. Substantial allocated resources for the schemes of the SCs/STs/Minorities and backward classes have not been utilized. If we do not succeed in reducing poverty the future can become more violent and prove a disaster for the country.

(Ambrose Pinto SJ is Principal of St. Aloysius Degree College, Cox Town, Bangalore 560005)

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1 thought on “India, the world’s second most unequal Country

  1. The extreme polarization of wealth of the nations will be turning a like a ship journey in which the loading only on one side of the ship, that will be a sinking journey.

    In the U.S. 1% of the top wealthiest controls 95% of the wealth. Likewise, according to Oxfarm, 10 of the topmost billionaires of the world have more wealth than the bottom level half of the world population, 3.6 billion people. How this economic disparity can be either justified or rationalized?

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