29th April 2024 (13 Topics)
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Inequality can no longer be ignored
Context
The Congress party's Nyay Patra manifesto has sparked a debate on inequality and wealth redistribution in India, coinciding with rising concerns over economic disparities.
Wealth Redistribution and Taxation:
- Inequality in India: The World Inequality database found that in 2022-23, 22.6% of the national income went to the top 1%, the highest ever since 1922. Wealth inequality is even more stark with the top 1% population having 40.1% share in wealth.
- Low tax-GDP ratio and regressive tax structure: India not only has a low tax-GDP ratio compared to other middle-income countries but also a regressive taxation structure, where indirect taxes contribute to almost two-thirds of all tax revenue collection. Furthermore, even direct taxes are not very progressive.
- Spending on welfare and the social sector is very low compared to other countries.
Employment-Centred Growth and Social Spending:
- Job creation and equitable growth: The focus extends to questioning the nature of economic growth, emphasizing the need for job creation and equitable growth that benefits all segments of society.
- Required measures: Governments must prioritize job creation through direct employment schemes, bolstering public services in health, education, and social security to reduce unemployment and enhance human development outcomes.
- Employment-centered growth: To address inequality in earnest, the government must focus on employment-centered growth pattern.
Mains Question:
Examine the implications of rising economic inequality in India and discuss strategies for promoting social equity and inclusive development, with a focus on wealth redistribution, progressive taxation, and employment-centered growth policies.
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