Richest 1% Hold Over Half Of Country’s Wealth, And Why This Needs Our Attention

Posted by Mayank Mohanti in Business and Economy, Society
January 17, 2017

While attending my first lecture on Human Rights, Gender and Environment, my teacher from Assam drew a sketch with a blue ink on a white board: two men with their foot rested on a couple of blocks were trying to climb the wall. While the man towards the left, who was practically taller than his friend could easily reach to the top, the one on the right required one more. This was when I got the message that my teacher wanted me to understand — “We don’t need equality, but an equity within society.”

A liberal by nature and not by any political affiliation, I couldn’t believe a recent study released by Oxfam claimed India’s richest one per cent hold a staggering 58% of the country’s total wealth. By other calculation, a mere 57 billionaires of a ‘socialist’ state have the same wealth as that of the bottom 70% population of the country.

What’s more disturbing is the fact that the country has witnessed an upward trend over the last two decades. The report titled “An economy for the 99 per cent” read that the richest 10% of the population in India have seen their share of income increase by more than 15%, whereas the income of the poorest 10% has fallen by more than 15%.

An inquisitive mind, or perhaps, an agitated heart would question: Why the increasing income divide? Well, the answer could range from a badly-shaped agriculture economy to the utter failure of several rural schemes and public distribution system; however, there’s one simple reason that is omnipotent — the rich typically spend only a small portion of their income compared to the poor, who have to shell out everything.

A widely believed conception within the economic hemisphere often considered inequality a positive point for a fast-growing developing economy such as India. However, former RBI governor and an acclaimed economist Raghuram Rajan had argued in his famous book Fault Lines that the United States’ refusal to tackle the growing inequality encouraged the housing boom, which eventually led to the great crash of 2008.

The government had been warned before, about the fault lines in the Indian economy. In a 2008 speech, Rajan had questioned the astonishing number of billionaires per trillion dollars of GDP.

Due to a combination of discrimination and working in low-pay sectors, women’s wages across Asia are between 70-90% of men’s,” the Oxfam report further said. The report further added that the CEO of India’s top IT firm earns 416 times the salary of a typical employee in his company.

With progressive taxation, the elimination of tax exemptions, a crackdown on tax theft, an increased social spending on public services like education and health, India could really do away with the inequality prevalent in the society.

India’s failure to empower women through wage employment and its inadequate facilitation of literacy to its youth left it red-faced after the Millennium Development Goals expired in 2015. A firm resolution to attain the Sustainable Development Goals by 2030 is all it needs. A strong political will and a deep-rooted effort to first contain, and then reduce the rising levels of extreme inequality can lift 1.25 billion Indians out of poverty.

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Image source: Chris Jackson/ Getty Images, Asian Development Bank/ Flickr

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