RAMPANT INEQUALITY

 The problems of poverty, unemployment, illiteracy, squalor and inequality are very much interrelated. According to World Inequality Report 2022 the richest 10% of global population earned 52% of the global income while the poorest half of the population had to be satisfied with only 8.5% income. While average person from top 10% earned $123100 per year corresponding share of the lowest half of  population was only $3920 per year.  Global wealth distribution is all the more skewed with poorest half of global population getting mere 2 % as against top 10% of global population enjoying ownership of 76% of total global wealth. The share of the global top 1%in total income increased from 20% in 1820 to 26% in 1910,consequently dropping to 16%in 1970 and further rising to 21%in 2020.The share of  income of  global top 1% was three to four times larger than the share of bottom  50% between 1820 and 2020.The extent of inequality is moderate in Europe as against it is very steep in Africa. While the income share of top 10% is 36% in Europe it is 58% in West Asia and North America. Similarly Sweden has moderate inequality compared to sharp inequality that exist in USA. Global inequality is largely contributed by regions such as South  Asia, South East Asia, Latin America, Sub-Saharan Africa and North America. While India and USA have extreme inequality it is relatively moderate in China. 

  Inequality in India remained rampant. The percapita income of  adult population was estimated to be ₹204200 as per purchasing parity. While the poorest half earned ₹53610 the top 10 % earned ₹1166520 and topmost 1% ₹ 4459190.In other words while the top 10% earned 57.1% of total income topmost 1% earned more than one fifth (21.7%) and bottom 50% earned merely 13.11%.As far as distribution of wealth is concerned the bottom 50% received only  5.9% of total wealth as against top 10% acquiring 64.6% and topmost 1% acquiring one third (33%)of total wealth , Average wealth possessed varied between ₹32449360 by topmost 1% and ₹66280 by poorest half of population.  Middle income group of 40% shared ₹151767 of Average income and ₹ 723930 of Average wealth constituting about 29.7 % of income and 29.5 % of total wealth respectively. Historically inequality has been persistent in  India. During the British period 1858 -1947 the share of the top 10% of income was around 50% .After independence government measures reduced the share to 35- 40% .Since the mid 1980s deregulation and later liberalisation privatization and globalization policies have led to steep increase in income and wealth inequalities in the world. While the topmost 1% have largely benefitted from economic reforms growth among the low and middle income groups has been relatively slow and poverty persists.

  Ever-increasing inequality of income and wealth is largely attributed to the impact of crony capitalism. Under crony capitalism business thrive not as a result of functioning of free enterprise but rather as a return on money and wealth amassed through unholy alliance between business class and political class. It is often achieved by the manipulation of relationships with state power by business interest rather than free and fair competition.  The manipulation is facilitated by discrimination in matters of providing permits or licenses ,mining concessions or awarding contracts of public works etc.Money is amassed not only  by making profit in the market but also through profiteering by rent seeking using monopoly or oligopoly power.In fact crony capitalism spills over into the Government, the politics and the media.When this unholy nexus distorts the economy and impinge society it corrupts public servicing, economic, political and social ideal .

  India was ranked the nineth position in Crony capitalism.Crony capitalism is embedded in the basic premises of India's economic philosophy. It has transcended all regions, sectors, officials, the legislature, the executives and the judiciary. Such cronyism both ignores and negates every requirement of objectivity,transparency or accountability.The primary factor responsible for the spread of cronies has been the exercise of economic power by influential business houses in India. The relationship between business houses and the ruling political parties has been close and the association have been obviously to mutual advantage - at the cost of public interest and in disregard of constitutional obligations and often repeated public pronouncements  made by leaders. Privatisation, the transfer of ownership of assets from public to private hands as a process of liberalisation has  served crony capitalists. In fact it has been observed that while there is a separate ministry to look after Micro Small and Medium Enterprises in effect every other ministry is keenly looking after  the interest of large corporate sector. Liberalisation has given a renewed vigour. Globalized finance and a narrow spectrum of large established businesses have exercised influence on and also benefitted from the decision making process. 

  Since inequality is very complex and deeply rooted in social, economic, political and environmental system and resources tackling the issues needed multiple approach.Measures suggested by European union were-empower women and create opportunities for youth and disadvantaged communities ,Increase economic inclusion and create decent work and higher incomes, enhance social services and ensure success to social protection, facilitate safe migration and mobility and tackle irregular migration, foster pro poor fiscal policies and develop fair transparent tax systems and encourage domestic resource mobilization and stimulate public and private sector development. In India Economic Survey 2021 argued that economic growth and social economic outcomes are different in India from that usually observed in advanced economies. "Unlike in advanced economies economic growth and inequality converge in terms of their effects on socio economic indicators in India. Survey further observed that economic growth has a far greater impact on poverty alleviation than inequality. .Redistribution is only feasible in a developing economy if the size of economic pie grows." 

 Our development experience has shown that relying on trickle down policy or percolating theory alone may not solve the problem of poverty. Public policy should ensure greater work participation to women and marginalized sections in different sectors of the economy along with provision of health education and income support to the needy. Not only crony capitalism should be checked but also new entrepreneurs, innovators, start ups and more MSMES must be promoted along with existing schemes.