The inequality challenge for India@75

Source: The post is based on an article “The inequality challenge for India@75” published in the Live Mint on 11^th August 2022.

Syllabus: GS 3 Inclusive Growth; Indian Economy and issues relating to Planning, Mobilization of Resources, Growth, Development, and Employment; etc.
Relevance: Inequalities in India

News: The article compares the present development with the national income at the time of independence. It highlights the lacunas in the growth patterns of India.

During the period 1900-01 to 1946-47, national income growth was 1% per annum and per capita income growth was 0.2% per annum.

(1) During the period 1950-51 to 2019-20, India has restored economic autonomy and enabled India to pursue its national development objectives. For Example, the GDP has multiplied by just over 29, which means it has doubled every 14 years and the GDP per capita has multiplied by almost 8, which means it has doubled every 24 years.

(2) India’s rapid economic growth since 1980 has led to a substantial reduction in absolute poverty. 

What are the areas where India needs reflection as well as introspection in the coming period?

(1) During the same period, the East or Southeast Asia economies have performed better than the Indian Economy. For example, the per capita income as a proportion of that of the world economy rose from 12% to 18% for India, 13% to 87% for China, and 10% to 35% for Indonesia.

(2) Economic growth in India has been associated with unequal outcomes that have created divides between regions, sectors, and people.

(3) Western and Southern India have developed more than the east and north of India.

(4) There has been a widening gap between richer and poorer states.

(5) Over the period 1950-51 to 2019-20, the agricultural sector’s share in GDP fell from 58% to 15%.

(6) There is a massive rural-urban divide prevalent in India.

(7) The economic inequalities have risen in India since India took the path of rapid growth from 1980s. For example, For India, the World Inequality Report 2021, estimated that the top 1% held as much as 33% of total wealth in India and the top 10% held 65% of total wealth.

(8) However, the scale of absolute poverty in India is striking. Poverty reduction could have been much greater.

(9) Malnutrition, particularly among children and women—persists, hunger and destitution are common,

(10) The child labour is prevalent, access to educational opportunities is sparse, and healthcare is neither available nor affordable.

(11) There has been jobless growth in India. Economic growth has not led to commensurate employment creation in India.

What should be done?

Economic growth can be transformed into meaningful development only if it brings about an improvement in the living conditions of people.

It is essential to recognize that employment is not only a source of growth but also a means of mobilizing people, which is the most abundant resource for development in India.

Employment is the only sustainable means of eradicating poverty and mitigating inequality.

The government should resolve to ensure that poverty and illiteracy do not exist 25 years from now when we celebrate the first centenaries (100 years) of our independence.