Just as the annual World Economic Forum jamboree kicked off at Davos in Switzerland, international charity Oxfam dropped its yearly bombshell on the state of global inequality. While the world’s five richest people—LVMH chief Bernard Arnault, Amazon’s Jeff Bezos, investor Warren Buffet, Oracle co-founder Larry Ellison and Tesla CEO Elon Musk—have more than doubled their fortunes since 2020, 5 billion people have gotten poorer over the same period.
The five men are worth a combined $869 billion and the world will have its first trillionaire within a decade. But poverty will not be eradicated for another 229 years, the ‘Inequality Inc’ report cautioned.
In India, the good news from Niti Aayog is that the share of our population living in ‘multidimensional’ poverty seems to have fallen to 11.3 percent in 2022-23, from over 29 percent a decade ago.
In absolute numbers, Niti Aayog estimates about 24.8 crore people escaped multidimensional poverty over the last 9 years. There is some confusion as there are different definitions of poverty. The World Bank defines ‘extreme poverty’ as an income of less than $2.15 a day and projected 10.9 percent of Indians living below the ‘poverty line’ in 2019.
Niti Aayog’s definition of ‘multidimensional poverty’, on the other hand, uses a spectrum of 12 indicators including nutrition, child mortality, years of schooling, and availability of drinking water and housing.
What is encouraging is that irrespective of the methodology, the number of those below the poverty line is in the 10-12 percent range—a drastic drop from the over 50 percent 20 years ago. But to put things in perspective: while more people have moved out of ‘extreme poverty’ and have access to the basics for survival, there is a simultaneous increase in income inequality.
The Asia-Pacific Development Report 2024 points out that though India’s per capita income soared from $440 to $2,400 between 2000 and 2022, the wealth divide also spiked. With the top tenth cornering 57 percent of the national income in 2021 by one estimate and the bottom half getting 13 percent, we emerged as one of the most unequal income distributors. It is therefore no more a question of satisfying basic needs, but a call to ensure all-round human development.
‘Capitalism with a human face’ would require a more equitable distribution of wealth by perhaps reversing the ‘soft’ taxation of the rich and reining in corporate power by breaking up monopolies.