“It is not widely understood but India does not have a working class — instead it has large labouring castes that are trapped in an inherently iniquitous system,” says Manas Ray, professor in cultural studies at the Centre for Studies in Social Sciences, Kolkata.
Last year, Bangladesh posted a per capita income of $2,227 or $280 higher than that of India, its larger neighbour.
“Bangladesh, once regarded as a ‘basket case,’ can now be expected to maintain this lead in the foreseeable future because of investments in the social sectors, especially education and health,” says Ray.
In a global report released in January, the British charity Oxfam describes India as ‘very unequal,’ with the top 10 percent of its 1.4 billion population having cornered 77 percent of the total national wealth.
The report, Inequality Kills, estimates that inequality has been rising over the last three decades.
Oxfam calculates that it would take 941 years for a minimum wage worker in rural India to earn what a top paid executive at a leading Indian garment company earns in a year. India’s stark wealth inequality is attributed by Oxfam to “an economic system rigged in favour of the super-rich over the poor and marginalised.”
The Oxfam report says that 63 million Indians are pushed into poverty each year because of unaffordable healthcare costs.
Public spending on healthcare ranks among the lowest in the world — 1.8 percent of GDP in 2021. Although India is a major destination for medical tourism because of its fine specialty hospitals, several of its poorest states have infant mortality rates higher than those in sub-Saharan Africa.
During 2021, when the COVID-19 pandemic caused 84 percent of Indian households to suffer a drop in income, the number of billionaires in the country grew from 102 to 142.
During the worst months of the pandemic (March 2020 to November 2021), the wealth of India’s billionaires more than doubled, from $313 billion to $719 billion.
“The pandemic proved to be a crunch point which exposed the country’s uncaringly iniquitous system,” says Ray, referring to how a suddenly imposed lockdown left millions of internal migrant workers stranded in the cities with no jobs, food or shelter and with little choice but to trek to their distant homes in the rural hinterland, often hundreds of kilometres away.
It took petitions in the Supreme Court for government to admit that more than half a million people were walking down the highways trying to get home, often braving assaults by police charged with enforcing lockdown rules. Trade unions said the bulk of an estimated 200 million migrant workers in India’s different cities and towns lost their jobs.
In contrast to the callous treatment meted out to internal migrant workers, the government spared no costs in arranging special flights to fetch students and privileged people who found themselves stuck in foreign countries that had also imposed lockdowns to stop the spread of the highly contagious COVID-19 virus.
Inheritance tax was abolished in 1985 and in 2017 the government abolished wealth tax, allowing the concentration of wealth in rich families. In September 2019, corporate tax was slashed from 35 percent to 26 percent.
The Oxfam report called for higher taxes to be imposed on the richest 10 percent of the Indian population to help fund measures to reduce inequality. That’s easier than done because only one percent of Indians declare earnings sufficient to attract taxation.
In 2021 only 50.89 million individuals in a population of 1.4 billion people filed income tax returns, and only half that number paid any worthwhile tax.
Prabhat Patnaik, former professor of economics at Jawaharlal Nehru University, New Delhi, agrees that that the solution to gross inequity lies in “taxing the rich and investing the proceeds for the neglected social sectors — it is shame that large numbers of people continue to have no access to health or education.”
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