Income inequality

As the popular saying goes, “the rich get richer and the poor get poorer”. In an astonishing report, Oxfam, a global advocacy group, has found that just 62 individuals had the same wealth as 3.5 billion people—the bottom half of humanity—in 2015. In its report titled, An Economy For The 1 %, Oxfam has found that the wealth of the richest 62 people has risen 44 percent in five years, which amounts to an increase of $542 billion to $1.76 trillion. To put these figures into perspective, $1.76 trillion amounts to 86 percent of India’s Gross Domestic Product ($2.05 trillion) in 2014. Meanwhile, the wealth of the bottom half fell by a little over 1 trillion dollars in the same period. Suffice to say, the report could not have come at a better time. In the comfortable confines of Davos in the Swiss Alps, the World Economic Forum is currently holding its annual meet. The WEF presents itself as an international institution of public-private cooperation, which seeks to improve “the state of the world by engaging business, political, academic, and other leaders of society to shape global, regional, and industry agendas”. Suffice to say, the WEF is nothing but a lobby group of the richest multinationals around the world. In its report, Oxfam notes, “Had inequality within countries not grown during 1990 and 2010, an extra 200 million people would have escaped poverty. That could have risen to 700 million had poor people benefited more than the rich from economic growth.” The situation is no less bad in India. According to recent data on global wealth from Credit Suisse, the richest 1 percent of Indians own 53 percent of the country’s wealth.                                                 

Dwelling further into the report, one finds that the richest 5 percent own 68.6 percent of the country’s wealth, while the top 10 percent have 73.6 percent. The poorer half of the population, meanwhile, scrambles for 4.1 percent of the nation’s wealth. It is no secret that income inequality has been a burden to post-Independent India. However, what is truly a cause for concern today is that the share owned by the rich has steadily increased since the turn of the century.   Data shows that India’s richest 1 percent owned just 36.8 percent of the country’s wealth in 2000, while the share of the top 10 percent was 65.9 percent. The unfortunate rise in income inequality grew during both the first National Democratic Alliance government from 2000-04 and consecutive United Progressive Alliance-led governments. The trend has not bucked under the current Narendra Modi-led ruling dispensation. 

For the first time since the dawn of economic liberalisation, the share of the top 1 percent has crossed 50 percent. India’s perceived place as the world’s fastest growing economy means nothing if the country continues to witness such stark income inequality. The International Monetary Fund, probably the repository for neo-liberal economic thought, has itself admitted that a widening income gap between the rich and poor is bad for growth. In its report, economists in the IMF have said that if governments want to increase the pace of growth, they should concentrate on aiding the poorest 20 percent of their citizens.