{"id":56331,"date":"2020-03-02T10:55:13","date_gmt":"2020-03-02T05:25:13","guid":{"rendered":"https:\/\/blogadmin.forumias.com\/?page_id=56331"},"modified":"2020-03-02T10:55:15","modified_gmt":"2020-03-02T05:25:15","slug":"answered-economic-survey-2019-pitch-for-wealth-creation-as-a-means-of-prosperity-and-welfare-for-all-critically-comment","status":"publish","type":"page","link":"https:\/\/forumias.com\/blog\/answered-economic-survey-2019-pitch-for-wealth-creation-as-a-means-of-prosperity-and-welfare-for-all-critically-comment\/","title":{"rendered":"[Answered] Economic survey 2019, pitch for wealth creation as a means of prosperity and welfare for all. Critically comment."},"content":{"rendered":"\n
\n Demand of the question<\/strong>\n Introduction.\n <\/strong>Contextual introduction.\n Body.\n <\/strong>Discuss how wealth creation is a measure of\n welfare or not.\n Conclusion.\n <\/strong>Way forward.\n <\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

An increasing GDP and wealth creation in a\nnation is often seen as a measure of welfare and economic success. According to\nthe Economic Survey 2019-20, wealth creation can act as a means of prosperity\nand welfare for all. However, one can\u2019t be sure that wealth creation means\nwelfare. Recently released Oxfam Inequality Report has highlighted that the\nrichest 1% in the world have more than double the wealth of 6.9 billion people\ncombined. In India, 9 billionaires own as much wealth as the bottom 50% of the\ncountry\u2019s population, reflecting wealth creation does not necessarily mean\nwelfare.<\/p>\n\n\n\n

Wealth\ncreation- a measure of welfare:<\/strong><\/p>\n\n\n\n

  1. Demand creation: <\/strong>Wealth created by an entrepreneur correlates strongly with raw\nmaterials procured by the entrepreneur\u2019s firms. The demand of raw material,\nbenefits the suppliers by supplying raw materials to the entrepreneur\u2019s firms\nbenefiting others.<\/li>
  2. Capital expenditure: <\/strong>Wealth created by an entrepreneur correlates strongly with the\ncapital expenditures made by the entrepreneur\u2019s firms, which proxies the\nbenefits that manufacturers of capital equipment reap by supplying such\nequipment to the entrepreneur\u2019s firms.<\/li>
  3. Benefit common citizens: <\/strong>Wealth created by an entrepreneur helps the country\u2019s common\ncitizens. Tax revenues enable Government spending on creating public goods and\nproviding welfare benefits to the citizens.<\/li>
  4. Purchasing power:<\/strong> Wealth creation in the\neconomy ultimately enhances the livelihood of the common person by providing\nhim\/her greater purchasing power to buy goods and services.<\/li>
  5. Reduce\npoverty:<\/strong> More wealth means more\ntaxation and thus more revenue in the hands of the government. This\ncan be used by the government in a targeted\nway to uplift millions out of poverty through welfare measures like MGNREGA and\nsubsidies or cash transfer.<\/li>
  6. Employment:<\/strong> There is a direct relationship between trade\nand employment.  More capital investment and wealth creation lead to\ngrowth of economy and lead to creation of jobs. This ensures\nthe welfare of many and helps many come out of poverty.<\/li>
  7. Investment\nin social sectors:<\/strong> More wealth\nwith companies ensures more\nspending in sectors like health, education\netc. Further, more wealth means more Corporate social spending through\nCorporate Social Responsibility.<\/li>
  8. Redistribution:\n<\/strong>Wealth from rich and some\nsectors of economy can be redistributed to poor and other sectors. For example,\nIT sector wealth creation helps the government to earn revenue from the sector and allow\nit to spend it on sectors in crisis like agriculture.<\/li><\/ol>\n\n\n\n

    Wealth\ncreation- not a measure of welfare:<\/strong><\/p>\n\n\n\n

    1. Inequality:<\/strong> Sustained increase in the wealth, concentrates\nincome in the hands of the few owners of capital. It doesn\u2019t necessarily mean\nwelfare for the poor. It is\nin a way is restricted by lower wages of workers and high wages of company\nowners.<\/li>
    2. Crony\ncapitalism: <\/strong>If left unchecked,\ngrowing inequalities can not only slow down growth, but also generate\ninstability and disorder in society. The consequence of the rich accumulating\never more capital and wealth, is that economic and, consequently, political\npower become increasingly concentrated in the hands of a wealthy few. This\nskews policy making processes towards overly representing the interests of\nthese wealthy elites.<\/li>
    3. Sustainability:\n<\/strong>A high GDP level does not\nnecessarily ensure that the living conditions of future generations will be as\ngood as they are now, i.e. there is no guarantee of sustainable development.\nStandards of living can be sustained over time by maintaining the existing\nproduction facilities and by ensuring future access to the necessary commodities,\nenvironmental benefits and\nwell-educated labour (human capital).<\/li>
    4. Taxation:\n<\/strong>Wealth doesn\u2019t necessarily mean more welfare. As the rich accumulate wealth, they tend to not give tax to the\ngovernment and use various means for tax avoidance.\nFor example, tax havens are used by corporations\nin order to not pay tax.<\/li><\/ol>\n\n\n\n

      Wealth creation is a necessary evil. Merely\nwealth creation doesn\u2019t ensure welfare. It fails to account for the\nmulti-dimensional nature of development or the inherent short-comings of\ncapitalism, which tends to concentrate income. Without real redistribution\nwealth creation only increases inequalities in real terms. Full-proof\nmechanisms are necessary to ensure wealth creation as a measure of welfare.<\/p>\n","protected":false},"excerpt":{"rendered":"

      Demand of the question Introduction. Contextual introduction. Body. Discuss how wealth creation is a measure of welfare or not. Conclusion. Way forward. An increasing GDP and wealth creation in a nation is often seen as a measure of welfare and economic success. According to the Economic Survey 2019-20, wealth creation can act as a means… Continue reading [Answered] Economic survey 2019, pitch for wealth creation as a means of prosperity and welfare for all. Critically comment.<\/span><\/a><\/p>\n","protected":false},"author":61,"featured_media":0,"parent":0,"menu_order":0,"comment_status":"open","ping_status":"closed","template":"","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"class_list":["post-56331","page","type-page","status-publish","hentry","entry"],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/pages\/56331","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/61"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=56331"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/pages\/56331\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=56331"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}