{"id":13365,"date":"2017-12-16T17:55:21","date_gmt":"2017-12-16T12:25:21","guid":{"rendered":"http:\/\/blog.forumias.com\/?p=13365"},"modified":"2017-12-16T17:55:21","modified_gmt":"2017-12-16T12:25:21","slug":"rising-inequality-in-india-the-pickety-report","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/rising-inequality-in-india-the-pickety-report\/","title":{"rendered":"Rising inequality in India: The Pickety report"},"content":{"rendered":"<p><strong>Context\u00a0<\/strong><\/p>\n<p>\u2018Inequality rose substantially since implementation of 80s\u2019 deregulation reforms\u2019.<\/p>\n<p><strong>World Inequality Report<\/strong><\/p>\n<p>Following are the finding of a new report by economists, including Thomas Pickety and Lucas Chancel:-<\/p>\n<ul>\n<li>Income inequality in India rose rapidly since the 1980s to a situation where the top 10% of the earners accounted for 56% of the income earned in 2014.<\/li>\n<li>The income share of India\u2019s top 1% rose from approximately 6% in 1982-1983 to above 10% a decade after, then to 15% by 2000, and further still to around 23% by 2014<\/li>\n<li>In 2014, the share of national income captured by India\u2019s top 1% of earners was 22%, while the share of the top 10% of earners was around 56%<\/li>\n<li>The top 0.1% of earners have continued to capture more growth than all those in the bottom 50% combined.<\/li>\n<li>By 2014, the national income share of the bottom 50% \u2014 approximately 390 million adults \u2014 was just two-thirds of the share of the top 1%, consisting of just 7.8 million people.<\/li>\n<\/ul>\n<p><strong><u>Why level of inequality was low after independence<\/u><\/strong>?<\/p>\n<p>This rising inequality is in sharp contrast to the trends seen in the 30 years following Independence, when income inequality was widely reduced and the incomes of the bottom 50% grew at a faster rate than the national average.<\/p>\n<p>It was mainly due to the socialist policies followed by the then government, like.<\/p>\n<ul>\n<li>Strict government control over the economy, with an explicit goal to limit the power of the elite<\/li>\n<li>Nationalization<\/li>\n<li>Strong market regulation and<\/li>\n<li>High tax progressivity<\/li>\n<\/ul>\n<p><strong><u>A comparison with China <\/u><\/strong><\/p>\n<ul>\n<li>Share of national income captured by the bottom half in both India and China after 1980 has been broadly similar.<\/li>\n<li>Big difference lies in the income captured by middle income group. While middle 40% in India got 23% of the increase in national income since 1980 while the same group in China got 43%.<\/li>\n<li>It means that Chinese middle has benefited far more than the Indian middle, and the bottom half in both countries has had broadly similar experiences.<\/li>\n<\/ul>\n<p><strong><u>Why this Inequality increased after 80\u2019s<\/u><\/strong>?<\/p>\n<p>There are many reasons of this inequality, such as:-<\/p>\n<ul>\n<li>When economy was freed from the government control, it leads to higher growth and provide opportunities to the people.<\/li>\n<li>This opportunity was exploited by Upper class.<\/li>\n<li>While excess supply of skilled and unskilled labour keeps wages low for the middle and lower classes.<\/li>\n<li>Labour unions are useful for collective wage bargaining but since the era of economic liberalization began unions have become weaker even in the organized sector.<\/li>\n<\/ul>\n<p><strong>Other reasons<\/strong><\/p>\n<ul>\n<li>Failure of labour-intensive manufacturing in India compared to its massive success in China.<\/li>\n<li>The proportion of the labour force in agriculture has come down, but the workers who have left farms have not got jobs in modern factories or offices.<\/li>\n<li>Majority of this labor force is employed in the informal sector.<\/li>\n<\/ul>\n<p><strong><u>Effects of rising inequality<\/u><\/strong><\/p>\n<p>Rising inequality may lead to:-<\/p>\n<ul>\n<li>Destruction of people\u2019s self-worth and confidence<\/li>\n<li>Increase in Crime<\/li>\n<li>Increase in hunger and Malnutrition<\/li>\n<li>Disharmony in the society<\/li>\n<li>Terrorist activities and environmental degradation<\/li>\n<li>Dissatisfaction against government<\/li>\n<\/ul>\n<p><strong><u>What should be done<\/u><\/strong>?<\/p>\n<ul>\n<li>Job creation in the modern sectors of the economy rather than redistribution through fiscal spending.<\/li>\n<li>Focus more on economic growth rather than populist policies<\/li>\n<li>Strong labour rights in a country help young people secure a fair wage.<\/li>\n<li>Government spending on infrastructure is important in rural areas<\/li>\n<li>The government\u2019s spending on quality of primary education remains a problem and needs improvement.<\/li>\n<li>Government expenditure on health must be increased.<\/li>\n<li>A social safety net for the informal sector workers like life insurance and pension policies is important.<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Context\u00a0 \u2018Inequality rose substantially since implementation of 80s\u2019 deregulation reforms\u2019. World Inequality Report Following are the finding of a new report by economists, including Thomas Pickety and Lucas Chancel:- Income inequality in India rose rapidly since the 1980s to a situation where the top 10% of the earners accounted for 56% of the income earned&hellip; <a class=\"more-link\" href=\"https:\/\/forumias.com\/blog\/rising-inequality-in-india-the-pickety-report\/\">Continue reading <span class=\"screen-reader-text\">Rising inequality in India: The Pickety report<\/span><\/a><\/p>\n","protected":false},"author":61,"featured_media":8109,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[27],"tags":[],"class_list":["post-13365","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-featured-editorials","entry"],"jetpack_featured_media_url":"https:\/\/i0.wp.com\/forumias.com\/blog\/wp-content\/uploads\/2017\/09\/63848331_indiaslum.jpg?fit=1005%2C509&ssl=1","views":{"total":1,"cached_at":"","cached_date":1700368995},"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/13365","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"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=13365"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/13365\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media\/8109"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=13365"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=13365"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=13365"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}