Growth Mania Can be Injurious to Society

Source: The post inequality in India has been created, based on the article “Growth mania can be injurious to society” published in “The Hindu” on 30th January 2024.

UPSC Syllabus Topic: GS Paper3- Economy-growth, development and employment.

Growth Mania Can be Injurious to Society, The article discusses India’s economic growth and increasing inequality. Despite ambitions for a $5 trillion economy, growth has benefited the rich more, leaving many poor behind. This rising inequality impacts social issues and democracy, and the focus on just economic size may worsen these problems.

What is the current status of economic growth and inequality in India?

India’s growth has led to more inequality. Since the 1980s, the gap between rich and poor has widened, making India one of the most unequal societies.

World Inequality Report’, 2022 describe India as “a poor country with an affluent elite”.

Data from the Labour Bureau shows that from 2014 to 2022-23, real wages for agricultural labor slightly increased by 4.6%, but for non-agricultural workers, wages actually decreased.

Over the period 2014-23, real per capita income in India has increased by 37% while the real wage of agricultural labour has increased by less than 5%.

What are the challenges in estimating inequality in India?

Limited Data Availability: Government agencies are reluctant to supply complete data on inequality, making precise estimates challenging.

Gender Data Gap: There is a lack of wage data for women workers, who constitute a significant portion of the labor force in certain sectors.

Focus on Male Workers: Rural wage rate data from the Labour Bureau, while reliable, only covers male workers, leaving a gap in understanding the full wage trends.

Why is data on rural wage rates reliable in estimating inequality in India?

Market-Based Quotes: The rural wage rate data is based on actual market quotations, providing a realistic view of wages.

Non-Survey Based: Unlike survey responses, this data reflects real-world transactions, reducing biases or inaccuracies common in surveys.

Comprehensive Coverage: It covers a wide range of rural jobs, offering a broader perspective on wage trends in rural areas.

Indicative of Living Standards: Since a large portion of India’s workforce is in rural areas (51.7% according to sixth economic census of India reports), these wage rates are indicative of the living standards of a significant population segment.

What are the consequences of inequality in India?

Social Pathologies: Growing inequality in India is linked to increased violence, disease, and mental health disorders.

Impact on the Rich: Inequality affects all, with the affluent building gated communities for security, highlighting a divided society.

Eroded Trust: The trust between different societal groups diminishes, impeding collective efforts on public issues.

Hindrance to Public Goods: Efforts to improve public goods like sanitation and waste management face challenges due to inequality. Issues like open defecation continue, as commitment to public hygiene varies across different income groups.

Challenge to Democracy: Inequality poses a threat to democratic values, as it contradicts the principle of equitable opportunity for all.

Way forward

To address these challenges, India needs policies that balance economic growth with reducing inequality. This includes focusing on increasing wages, especially in rural areas, and ensuring equitable access to public goods. Strengthening data collection on inequality can also help in creating more effective policies.

Question for practice:

Discuss the consequences of rising inequality in India and how they impact various aspects of society.