Monday, 11 September 2017

Inequality in India

Income inequality in India at its highest level since 1922, says Lucas Chancel

The Hindu link here 

• According to a research paper titled ‘Indian income inequality, 1922-2014: From British Raj to Billionaire Raj?’ by renowned economists Thomas Piketty and Lucas Chancel, income inequality in India is at its highest level since 1922, the year the Income Tax Act was passed.
• The top 1% of earners captured less than 21% of total income in the late 1930s, before dropping to 6% in the early 1980s and rising to 22% today.
• China also liberalised and opened up after 1978, and in doing so, experienced a sharp income growth as well as a sharp rise in inequality. This rise, however, stopped in the 2000s so that inequality is currently at a lower level there than in India (top 1% income share in China today is 14%).
• In December, they will release the first ‘World Inequality Report’ where they will compare India’s inequality trajectory with other emerging, industrialised and low-income countries and suggest ways to tackle global and national inequality.

Oxfam's Inequality Report Has Big Flaws, But That Doesn't Narrow India's Stark Wealth Divide

Global inequality data may be skewed by debt, but Indian inequality really is as bad as it says.

Mark Zuckerberg is wealthier than the poorest 40% of Indians, and Mukesh Ambani is worth more than the poorest 30% of Indians, a new report by Oxfam says. While Oxfam might be misstating some facts on global inequality, the data on Indian inequality really is that bad.

The report, released on Monday morning, is an annual publication released by the advocacy group Oxfam to coincide with the World Economic Forum in Davos. This year, Oxfam found that the world's eight richest men - including Microsoft co-founder Bill Gates and Facebook co-founder Zuckerberg - were worth $426 billion between them, or more than the combined wealth of the poorest half of the world.

for more info link here:

  Equality for what?

 We must incorporate the right to equality into our political vocabulary to arrest deepening inequality

In 1820 the German philosopher Georg Wilhelm Friedrich Hegel, in his magnificently crafted Philosophy of Right, had written with some despair of the moral squalor and of the ravages that poverty brings in its wake. The state of poverty, he argued, is not an aberration, it is a product of industrial society, of the overproduction and underconsumption which marks this social order. But it is precisely society that banishes its victims to the twilight zone of collective life. Here, removed from the advantages of solidarity that civil society offers, the poor are reduced to a heap of fragmented atoms, rabble, poebel. When the standard of living of a large mass of people falls below a certain subsistence level, he wrote, we see a loss of the sense of right and wrong, of honesty and of self-respect. “Against nature man can claim no right, but once society is established, poverty immediately takes the form of a wrong done to one class by another.”
Hegel suggests that poverty is a social phenomenon. One, society is complicit in the creation and recreation of poverty. Destitution, that is, is the outcome of a skewed economy. Two, poverty breeds unfortunate consequences, such as suffering, which seriously demoralises human beings. Three, the existence of large numbers of the poor pose a direct threat to the social order, simply because the poor are (justly) resentful of their exclusion from the benefits of society.
We should be seriously reflecting on Hegel’s criticism of a society that refuses to correct the wrongs it has heaped on its own people, in the light of the research findings of the economist Thomas Piketty and his colleague Lucas Chancel.

Inequality in India

In a paper aptly titled ‘Indian income inequality, 1922-2014: From British Raj to Billionaire Raj?’, they conclude that income inequality in India is at the highest level since 1922, when the country’s income tax law was conceived, and that the top 1% earners corner 22% of income. These research findings should send a powerful warning signal to power elites, leaders who prefer to concentrate on the politics of beef, brutal repression of dissent, and curtailment of basic human freedoms, even as the lives of thousands of Indians are mired in mind-numbing poverty.

There is more to the proposition that some persons are poor beyond belief, and others are rich beyond belief in India. P is poor, we can say, when she does not possess access to the basic resources which enable q, or s, or m to consume nutritious food, avoid ill health, attend school, take up a job, and own a home, let alone go on holiday or possess a car. This implies that p is not just poor, she is unequal to q, s, or m, since the latter three, unlike p, have access to certain advantages that p does not. Poverty is the effect of inequality as well as the prime signifier of inequality. And inequality is demeaning.

Implications for society

Arguably, inequality is not only a matter of statistics. It is a shattering reflection on the kind of society we live in. Logically, if the economic ordering of society is responsible for ill-being, it is obliged to remedy the wrongs that it has visited upon the heads of the poor. This constitutes a basic code of justice. People who have been wronged are entitled to ask for justice. If justice is not delivered, inequalities are reinforced and compounded over time.

Resultantly, people fated to occupy the lowliest rungs of the social ladder are not only denied access to basic material requirements that enable them to live a decent life, they are likely to be socially overlooked, politically irrelevant except in times of elections when their votes bring parties into power, disdained, and subjected to disrespect in and through the practices of everyday life. To be unequal is to be denied the opportunity to participate in social, economic, and cultural transactions from a plane of equality.
Starkly put, the presence of massive inequality reflects sharply and pejoratively on the kind of social relations that we find in India. Because these social relationships are indisputably unequal, they cannot but be entrenched in massive discrimination and exploitation. Can we reflect on inequality without taking on exploitation and discrimination? And unless we confront these background inequalities directly, will not inequality continue to be produced and reproduced along with the production and reproduction of a lopsided social order, indeed as an integral part of this order?

Morality of mutual respect

Let us not understate the implications of inequality, it violates a basic democratic norm: the equal standing of citizens. Persons have equal standing because each human being has certain capacities in common with other human beings, for instance, the capacity to make her own history in concert with other human beings. Of course the histories that persons make might not be the histories they chose to make, but this is not the issue at hand. What is important is that each person realises this ability.

The principle of equal standing generates at least two robust principles of democratic morality. For one, equality is a relation that obtains between persons in respect of some fundamental characteristic that they share in common. Equality is, morally speaking, a default principle. Therefore, and this is the second postulate, persons should not be discriminated against on grounds such as race, caste, gender, ethnicity, sexual preferences, disability, or class. These features of the human condition are morally irrelevant.
These two postulates of political morality yield the following implications. To treat persons equally because they possess equal standing is to treat them with respect. The idea that one should treat persons with respect not only because some of these persons possess some special skill or talent, for example skilled cricketers, gifted musicians, or literary giants, but because persons are human beings, is by now part of common sense morality. If someone were to ask, ‘equality for what’, we can answer that equality assures equal standing and respect, and respect is an essential prerequisite for the making of human beings who can participate in the multiple transactions of society from a position of confidence and self-respect. If they cannot do so, the government is simply not taking the well-being of its citizens seriously.
There is urgent need, in the face of government inaction and insensitivity towards people trapped in inequality as a social relation to invoke the collective conscience of Indian citizens. If the right to equality is violated, citizens should be exercised or agitated about this violation. But for this to occur, for society to feel deeply about the right on offer, we have to incorporate the right to equality into political thinking, into our values, and into political vocabularies. The project requires the harnessing of creative imagination and courage on the one hand, and careful reasoning, persuasion, and dialogue on the other. The task also demands the investment of rather high degrees of energy and time. But this is essential because a political consensus on what constitutes, or should constitute the basic rules of society, is central to our collective lives. The political is not a given, it has to be constructed, as Karl Marx had told us long ago, through determined and sustained political intervention.

Neera Chandhoke is a former Professor of Political Science at Delhi University 

source: The Hindu; Link:

 Income inequality is the greatest irony of a Welfare State

Income inequality is the unequal distribution of household or individual income across the various participants in an economy. Income inequality is often presented as the percentage of income to a percentage of population.
Income inequality is often associated with the idea of income “fairness.” Most people consider it “unfair” if the rich have a disproportionally larger portion of a country’s income compared to the general population. The causes of income inequality can vary significantly by region, gender, education and social status.
First and foremost cause of undermining equality in India is growth factor. With economic growth taking place at a higher rate than before, different people in the country continue to earn differently. In particular, the incomes of Indians in upper and middle quartiles are rising faster as compared to those for the poor do. This is a common phenomenon when an economy is in its growing stage. The main explanation for this disparity is the shift from an agricultural economy to an industrial economy.
Implications of income inequality:
  1. High and sustained levels of inequality, especially inequality of income and opportunity can entail large social costs. Entrenched inequality of outcomes can significantly undermine individuals’ educational and occupational choices.
  2. Inequality of income does not generate the “right” incentives if it rests on rents. In that event, individuals have an incentive to divert their efforts toward securing favored treatment and protection, resulting in resource misallocation, corruption, and nepotism, with attendant adverse social and economic consequences.
  3. Income inequality (as measured by the Gini coefficient, which is 0 when everybody has the same income and 1 when one person has all the income) negatively affects growth and its sustainability.
  4. Higher inequality in income lowers growth by depriving the ability of lower-income households to stay healthy and accumulate physical and human capital.
  5. Income inequality dampens investment, and hence growth, by fueling economic, financial, and political instability.
Ways to tackle inequality in India:
  • Despite being important to the electorate, inequality of income is absent from major political campaigns. There is need to make inequality as a political agenda.
  • Government should work towards reducing asset inequality through redistributive land reforms but also through rationalising taxes, preventing monopoly of control over water, forests and mineral resources and reducing financial concentration.
  • There is need to tackle bias against caste and gender first of all by recognising the value and dignity of all work (including unpaid work) and all workers (including those in the most difficult arduous and degraded occupations).
  • Inequality can be reduced by providing greater voice to traditionally oppressed and suppressed groups, including by enabling unions and association, and making public and corporate private activity more transparent and accountable to the people generally.
  • The media in India plays a role in sustaining inequality. This is becoming an urgent problem. We must take measures to reduce corporate takeover and manipulation of mass media.
  • Policymakers should not forget that technology has helped in reducing some of the access barriers in India, particularly in relation to access to information. Policymakers should focus on making technology cheaper and deepening its penetration.
  • As far as India is concerned, most of the public places are inaccessible to people with disabilities. As per the 2011 census, India has about 2.7 million people with disabilities, and only a handful of those enjoy education and/or employment.
  • The gender inequality can be reduced by woman empowerment in genuine manner with a right based approach, rather that treating woman as a beneficiary of public schemes.
Measure of Income inequality: Gini coefficient
In economics, the Gini coefficient is a measure of statistical dispersion intended to represent the income or wealth distribution of a nation’s residents, and is the most commonly used measure of inequality. It was developed by the Italian statistician and sociologist Corrado Gini.

The Gini coefficient measures the inequality among values of a frequency distribution (for example, levels of income). A Gini coefficient of zero expresses perfect equality, where all values are the same (for example, where everyone has the same income). A Gini coefficient of 1 (or 100%) expresses maximal inequality among values.

The Gini coefficient is usually defined mathematically based on the Lorenz curve, which plots the proportion of the total income of the population (y axis) that is cumulatively earned by the bottom x% of the population (see diagram). The line at 45 degrees thus represents perfect equality of incomes. The Gini coefficient can then be thought of as the ratio of the area that lies between the line of equality and the Lorenz curve (marked A in the diagram) over the total area under the line of equality


No comments:

Post a Comment