Answer of the day-Inequality

Q-In the backdrop of protectionism in the world, Highlight the trend of inequality in India. What is the present status.? How can we overcome inequality? 

Sol-Recent phenomenon like Brexit,  election of Trump in the name of Immigrants etc are the protectionist event which are the results of increase inequality worldover due to globalization.

In India also, inequality has been increased 1981 and specially after 1991 reform. Following trend has been observed in India wrt inequality.

1.1930s---income shared by top 1% peaked

2.From independence to 1981 -- access to resources increases for some in the form of government jobs,improvement in business activity.

3.1981 to present-It is important to note here that inequality started rising before 1991 due to government pro business policy in 80s.After 1991 reforms, economic growth increases drastically but at the same time, inequality also increases such that at present richest 1% own 58% of total wealth in the country.

Ways to improve inequality

1.Social Welfare service like MNREGA etc need to be promoted

2.Promotion of MSME should be there. As MSME provide employment to people at ground level as well as to women, inequality would decrease

3.Formalisation of economy should be encouraged, as more than 90% of people are engaged in informal sector which are paid less than formal sector.

4.Promotion of agriculture- As majority of people are employed in agriculture, thus by promoting agriculture inequality would reduced

5.Increasing ease of doing business, reducing corruption etc so that general employment level as well as benefit of government service can be taken by poor people.

6.Financial Inclusion need to be promoted so that access to credit can be increased and thus small business and poor people can be benefitted.

Though India has achieved a good success with GDP among top 10 in the world but inequality is the major issue of the country. Also its not just economical but caste,religion, region,gender inequality is also there. And by working on improving all these inequality would help in reduction of economic inequality as well. Thus actual potential of demographic dividend can be achieved