Need quick solutions to address bane of growing inequality
It’s widely known that levels of poverty have grown, and the chasm between rich and poor has widened as an economic fallout of the pandemic. However, when it is put in sharp, contrasting figures, as Oxfam’s Davos report does, it shocks the conscience. During 2021, the second year of the pandemic, 84% of Indian households saw their income decline while the number of billionaires in India grew from 102 to 142. Addressing the World Economic Forum, an annual jamboree of the capitalist world, the Oxfam report ‘Inequality Kills’ says the richest 98 Indians now own the same wealth as the bottom 552 million people. Describing India as ‘very unequal’, the well-known charity said the top 10% of the country holds 57% of the wealth, while the share of the bottom half is just 13%.
Internationally, economic inequality has cut the income of 99% of the global population and forced over 160 million more people into poverty, the report says. Even the gap between the rich and poor nations that had been closing has now been reversed. These findings are not over the top, and are broadly supported by conservative institutions like the World Bank. A projection by a couple of World Bank economists predicts that in 2021, the world’s 20% of the richest are expected to recover about half of what they lost in 2020, while the bottom 20% are expected to lose another 5% of their income.
These reports underline the collapsing public health systems of countries such as India and the lack of a safety net for millions who were thrown out of work in the downturn. Oxfam suggests some progressive taxation measures to address this growing inequality. For starters, indirect taxes like the GST tax the rich and poor alike for products and services. This could be graded to lessen the burden on the poor. Again, a mere 1% wealth tax imposed on the richest could take care of the country’s education and literacy programmes. With the Union Budget round the corner, the government would do well to weigh these suggestions. This is urgent considering there is no end in sight to the rampaging pandemic.