Govt must redirect wealth

Dangerous Inequality
By Dhurjati Mukherjee

“A new billionaire has been created every 26 hours since the pandemic began. The world’s 10 richest men have doubled their fortunes, while over 160 million people are projected to have been pushed into poverty… “ These‘issues’, says an Oxfam report are “all part of the same, deeper malaise. It is that inequality is tearing our societies apart. It is that violence is rigged into our economic systems. It is that inequality kills. The coronavirus pandemic has been actively made deadlier, more prolonged, and more damaging to livelihoods because of inequality.”
The trends are alarming indeed and the report entitled “Inequality Kills”, has triggered a sharpened debateon inequality, which needs urgent correction globally. Amassing of wealth by billionaires, even during the last two years of the pandemic when, it is generally believed, that economic activity suffered to a great extent, is distasteful and shocking. Worse, the Indian billionaires Club adds another dimension to it.
In its India Supplement 2021, the report highlighted that 4.6 crore Indians are estimated to have fallen into extreme poverty in 2020, accounting for nearly half of the global ‘new poor’, as per the United Nations. And while the income of 84 percent households had fallen in 2021, the number of Indian billionaires grew from 102 to 145 during the pandemic. The collective wealth of India’s richest people hit a record high of Rs 57.3 crore ($775 billion) in 2021. The wealth of the billionaires during the pandemic – from March 2020 to November 2021 – increased from Rs 23.1 lakh crore ($313 billion) to Rs 53.2 lakh crore ($719 billion).
The report showed that about 1/5thof the increase in the rise of the richest 100 families was accounted for from the increase of the wealth of a single individual and business house – the Adanis: “Gautam Adani, ranked 24th globally and second in India, witnessed his net worth multiply. . . from $8.9 billion in 2020 to $50.5 billion in 2021. . . At the same time, Mukesh Ambani’s net worth doubled in 2021 to $85.5 billion from $36.8 billion in 2020.”
Additionally, it pointed to three policy decisions of the Modi government as pro-rich, maintaining that “the abolition of wealth tax in 2016, steep cuts in corporate taxes and an increase in indirect taxation have removed the rich from being the primary source of tax revenue”.
And, if this be the case, then the so-called policy decisions or reforms seem faulty as these are obviously not intended to curb disparity in incomes. Instead, these merely attract foreign capital and increase GDP. None will help in ensuring a better livelihood for the bottom segments of the population. It will neither boost up consumption that would create demand and stabilise prices nor create jobs. It can very well be argued that the pro-capitalist, pro-rich path of growth will not help in grass-root economic development.
One may refer to the World Inequality Report, 2022 which showed that the top 1 percent holds 33 percent of the country’s wealth and the top 10 percent holds 64.6 percent of the wealth. To get out of the poverty trap, there is a need to raise incomes, which require job creation. On the one hand, the growth being witnessed is jobless and, on the other, there is a lack of structural change with the share of the workforce in agriculture actually increasing.
The pandemic put spotlight on internal migration. In India, the highest migration takes place among the 20-24 age groups (NSS 64th round). As many as 8 of 10 households reported internal migration, increasing unemployment, lack of employment policy, regional inequalities and rural-urban divide along with absence of migration policy for actively promoting skills and migration. The pitiable condition of migrants witnessed during the past two years simply confirms the travails of inequality.
Recently, the Supreme Court agreed to examine a complaint – moved by civil liberties and RTI activists, Harsh Mander, Anjali Bhardwaj etc. — that lakhs of migrant workers were facing grave food and livelihood crisis amid the pandemic due to the government’s failure to provide relief despite the court’s directive seven months back.
The petitioners referred to the findings of the CMIE that the proportion of households where more than one person is employed has fallen from nearly 35 percent in 2016 to about 24 percent in 2021. Households where only one person is employed has risen from 59 percent in 2016 to 68 percent in the first 11 months of 2021. Thus, it is amply manifest that the focus of the government’s strategy is to ignore the concerns and demands of the poor sections. The apex court chastised the States for rejecting monetary claims of thousands of families that had lost members to Covid and ordered the governments to directly reach out to orphaned children with financial succour.
The question that arises is whether the government is numbed at all over the inequality graph? Is it at all interested in changing its strategy of development to ensure that those in need are given proper protection and support? The policy focus and the yearning to help big business in all possible ways, even if they violate rules and regulations of the country has only added to the wealth of the millionaires of the country, while the poor continue to suffer.
Why is it that a major section of economists are against imposing a tax on the super-rich? Is it because they continue to fund the party in power or are they really a partner in grass-root development? It is time the government reorients its strategy and start providing help and support to the deprived and seek to bridge the inequality gap. A possible step, to begin with, could be say increase the budget of MGNREGA by at least 15 to 20 percent and devise an urban employment programme for the poor in the next fiscal; see how much of the promised Rs 1000 crore to support migrant labourers from PM Cares Fund, as pledged has been spent, etc.
While there is a need to evolve a comprehensive rural development strategy and a social infrastructure plan, what will matter most is a political will,wherein “Governments must rewrite the rules within their economies that create such colossal divides, and act to pre-distribute income, change laws, and redistribute power in decision-making and power in the economy.” For as the report warns: “Higher inequality begets more crime, less happiness, less trust, and more violence.It makes the aim of banishing poverty from the world impossible.” — INFA