The issue of “wealth inequality” has emerged as a significant point of contention in the Lok Sabha 2024 election, sparking intense debates and controversies between political factions. Taking a dig at the Congress’ promise to address the inequality of wealth and income in its manifesto for the Lok Sabha election, Prime Minister Narendra Modi said the Congress, if elected to power at the Centre, “would distribute people’s property, land and gold among Muslims”. He proceeded to say that Congress had announced that it would conduct a survey to find out the property of individuals, gold owned by women, silver mostly owned by tribal families, and land and cash belonging to government employees and others, and redistribute it. “Can you tolerate the government snatching your hard-earned money and property?” asked Mr Modi.
What is Wealth Inequality?
Wealth inequality refers to the unequal distribution of assets, resources, and opportunities among individuals or groups within a society. It’s often measured by comparing the distribution of wealth, such as income, property, and financial assets, among different segments of the population. Factors contributing to wealth inequality include disparities in income, inheritance, education, access to resources, and systemic barriers that perpetuate unequal distribution of wealth over time.
A recent study indicates that India’s economic growth benefits are inequitably distributed, with wealth and income disparities surpassing levels seen during British colonial rule. The wealthiest 1% controls a significant share of national wealth and income, while the bottom 50% struggle with limited resources.
This data has significant implications for society and the economy. Firstly, it highlights the widening gap between the rich and the poor, which can lead to social tensions and unrest. When a small portion of the population controls most of the wealth, it can create feelings of injustice and resentment among those struggling to make ends meet.
According to Oxfam India. Inequality has worsened over the past decade of Modi’s rule. India has 271 dollar billionaires, third behind only China and the US — and the world’s highest number of poor at 228.9 million.
Factors like the caste system and regional disparities also worsen India’s income inequality. A study jointly conducted by a few Indian universities found that Only 22.3% of the upper caste Hindus own 41% of the country’s total wealth and form the wealthiest group, whereas 7.8% of Hindu Scheduled Tribes own the lowest share of the country’s assets at 3.7%. The study also highlighted that five states: Maharashtra, Uttar Pradesh, Kerala, Tamil Nadu and Haryana owned about 50% of the country’s total wealth.
Wealth inequality can have various effects on a nation. It can lead to social unrest, as those with fewer resources may feel marginalized or disenfranchised. Economically, it can hinder overall growth by limiting opportunities for lower-income individuals to invest in education, start businesses, or accumulate assets. Additionally, it can strain social services and public resources, as a disproportionate burden may fall on the government to address the needs of the less affluent. In extreme cases, wealth inequality can also erode social cohesion and trust in institutions, which can have long-term implications for stability and governance.
What Has Worsen The Income Inequality in India?
The International Monetary Fund (IMF) noted in 2016 that Asian countries, including India, struggle to achieve economic growth and equal wealth distribution. Over the years, inequality has worsened, making it harder to lift people out of poverty and build a solid middle class. This indicates that despite economic progress, the benefits of growth are not reaching everyone equally. As a result, inequality has worsened over the years, posing obstacles to poverty alleviation efforts and developing a robust middle class. This has significant ramifications for social mobility and the economy’s overall health.
Oxfam highlighted in a 2017 report that the wealth gap is staggering, with just eight billionaires possessing as much wealth as 3.6 billion of the world’s poorest individuals. They attribute this widening gap to the actions of the super-rich, who evade taxes, influence politics, and underpay their workers, worsening the inequality crisis. This extreme concentration of wealth highlights the disproportionate power and influence wielded by a small segment of society. The actions of the super-rich, including tax evasion, political influence, and exploitation of workers, exacerbate the inequality crisis, perpetuating a cycle of wealth consolidation and deprivation for the majority.
Moreover, a 2018 study underscored that inequality in India isn’t solely about how money is distributed but also stems from social disparities that keep certain groups trapped in poverty.
The Reserve Bank’s 2019 study added to these concerns by revealing a significant decline in housing affordability over recent years. This makes it increasingly difficult for young people to buy homes, widening the gap between the rich and the poor. Limited access to affordable housing not only worsens financial strain but also widens the gap between the rich and the poor. This housing inequality further perpetuates social and economic disparities, limiting opportunities for upward mobility and worsening social tensions.
Unemployment compounds the issue, as joblessness prevents individuals from earning income and escaping poverty. When prices rise due to inflation, the purchasing power of wages diminishes, further squeezing households’ budgets and exacerbating financial hardships. Additionally, high taxes contribute to inequality by allowing the wealthy to evade their fair share, consolidating wealth in the hands of a privileged few.
India’s development index shows considerable differences between regions and economy. Significant disparities in wealth not only strain social cohesion and hinder upward mobility but also impede overall learning and growth opportunities. When a select few possess considerable wealth, it creates barriers to accessing essential resources, making it more challenging for individuals to afford basic necessities and invest in personal development. Moreover, this concentration of wealth can divert funds away from crucial areas where investment is needed the most, worsening societal inequities and hindering progress for all.
The issue of wealth inequality in India goes beyond numbers and statistics. It’s about the lives of real people, their hopes, dreams, and struggles. It’s about the daily challenges faced by those on the margins, striving to make ends meet while a small fraction enjoys immense prosperity.
Hence, PM Modi’s above mentioned statements are not only untrue but also misleading. It’s like he’s trying to stir up fear by suggesting that if the Congress were to come to power, they would take away people’s hard-earned money and property. This kind of talk doesn’t help anyone, it just divides people and spreads mistrust. Instead of having real conversations about how to address inequality, it creates unnecessary tension. We need leaders who focus on solving problems rather than blatant fear mongering.
As we reflect on the complexities of wealth inequality in India, it becomes evident that addressing this issue requires genuine collaboration, empathy, and innovative solutions. Rather than succumbing to divisive rhetoric and fear-mongering tactics, we should strive for constructive dialogue and inclusive policies that uplift all segments of society.