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Tuesday, Oct 26, 2021
Outlook.com

Inequality Paradox

The trickle-down theory has limits. It helps the weaker sections, but enables the capitalists to gain the most.

Inequality Paradox
Photograph by Suresh K. Pandey
Inequality Paradox
outlookindia.com
2020-10-02T13:36:33+05:30

The inconsistencies seem absurd. In the midst of the country’s 30th year of reforms, the successes on the income parameters are visible. The number of poor declined substantially, which reflected in the country’s income hierarchy. In 1991, its shape was a standard pyramid with a broad base. The bulk of the population was poor, a lower percentage was middle class and a sliver was rich. Today, a bulge has appeared in the middle, the base has thinned and the top widened.

If one looks at the numbers, 60 per cent of the population, or 500 million, were considered poor in 1991. Today, the figure is less than a fifth, or not more than 250 million. Some studies, like the 2015 Brookings report, claim that the deprived class constitutes a mere 50 million. The middle class, although the figures are disputed, is on the march. India has more millionaires and billionaires. The Forbes real-time global list of the rich counts more than 100 Indian dollar-billionaires.

ALSO READ: Swadeshi Movement Part 2

Yet, studies conclude that income inequalities sharpened in the past three decades. Indian incomes zoomed across socio-economic sections, but there were huge differences between the rich and poor, says the UN Human Development Report (HDR) 2019. Between 2000 and 2018, on an average, incomes grew by a massive 122 per cent. However, those of the bottom 40 per cent scaled up by less than half: 58 per cent. The figure for the top 1 per cent of the rich was a whopping 213 per cent.

A similar narrative was repeated across nations. Between 1980 and 2016, the overall global correlation with per capita earnings showed an elephant-like curve. It was, says the HDR, like the “silhouette of an elephant with a raised trunk”. It...

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