Socio-Economic differences that pose a threat to the next decade’s development!!
Hyderabad: On one hand, there are those who are desperate to meet the minimum requirements and on the other, we have people who are born with a silver spoon!
While we get to see cloud-tearing skyscrapers in one part and while on the other side, we see thatched roof-top dwellers!! We see princely- citizens strolling in plush suits and boots, while there are also paupers wandering in the same area, wearing torn shirts and shabbily dressed!!!
It is a strange world we are living in and looks like our next generation will also get to live-in, unfortunately!! Day by day, the gap between the two classes of the rich and the poor seems to be getting deeper and deeper! It is so astonishing to know that about 75% of the world riches lie with just the 1% group of the world population, which makes them rich beyond belief!!
The ever-widening income gap between the rich and the poor are disturbing the world economy, and India is especially getting affected to a large extent. Economists are fore-seeing the expansion of this gap to reach to a higher level in the coming decade!! Now the burning question is whether there are any steps that the government and the citizens in general can do, to reduce this differentiation in the society??
A few instances which explain this financial/economical divide in the society:
- It takes 941 years for a worker of a textile company to earn the equivalent of an annual salary of the same textile company owner!!
- A worker in a rural industry takes 50 years of hard work to match the earnings of a highest salaried employee in the same industry who earns it by working just for 18 days!!
- India is said to be developing fast and unfortunately, the financial divide between the poor and the rich is also widening at a rapid pace
While global wealth is concentrated with just a handful of people, the poor are facing a dearth of minimum basic needs to live. This divide between the two sects of people is not concentrated just in the country, but is visible on the global front too. Economists further feel that the next decade is going to see a further expansion in the economical gap, reduction of which is going to be a huge challenge for the world.
Why is it a challenge?
It is estimated that by the end of 2030, up to 75% of the global wealth will be in the hands of just 1% of the world population. India is no exception to these stats. As of January, 2019, there were 134 billionaires in the country. Their revenues in 2018 (which is estimated to be Rs.4,89,100 crore) are equivalent to 85 % of the total expenditure spent on education and medicine in a single year, across all the states of the nation.
Economists warn that if such huge economic disparities cannot be minimized over the next decade, there will be a deep rift between the clans, causing outrage, and eventually social and political instability.
What are the consequences of such inequality?
- The population of our country is 136 crores. Of this, 21.9% live below the poverty line
- With all the investments and resources concentrated on the cities, the villages are falling behind in terms of development
- Economic barriers in agriculture-dependent countries like India, are increasing every year. Farmers are hit with more debts annually
- On one hand, industries are troubled by a shortage of skilled workers and on the other, millions of youth are left searching for a suitable job.
Did You Know?
- The Centre is implementing Employment Guarantee Scheme, Jandhan Yojana, Deendayal Upadhyaya Grameen Kaushalya Yojana and Standup India Schemes to reduce the economic gap
- According to NITI Ayog reports, Meghalaya, Mizoram and Telangana are leading in the list of the states working successfully towards reducing the economical divide and Andhra Pradesh stands 15th in the list.
The huge gap in income across the classes!!
- Between the years - 2006-2015 , the income of ordinary workers in the country increased by a meagre 2% , while the income of the wealthy class grew by 600%!!
- There are 2,043 people who have wealth over and above $100 billion in the world. Last year, their revenues were added by another $760 billion
- According to income tax calculations in India, atleast 70 people are expected to be ‘born-millionaires’, every day between 2018-2022. There are 3.30 lakh such ‘millionaires by birth’, as of 2017!!
- It is estimated that by the year 2027, this calculation shall reach to an alltime high of 10 million people that are born into riches!!
What can government do to counter this situation?
Focus on marginalized people:
- The concept of ‘Inclusive growth’ should be adapted such that the income standards of the poor increase on par with the rate of increase of the income of the rich
- Increase investment in sectors that have higher employment opportunities and provide more opportunities for youth
- Poverty Alleviation Schemes and Social Security Schemes for the Poor should be implemented without fail. And direct money transfer might prove to be a great help for the poor
- Prevent corruption: Corruption mostly affects the poor. Therefore, anti-corruption laws should be made stringent, to counter such mal-practices
- Increase the minimum wage level of workers and the number of jobs with respectable salaries. Job security should be prioritized
- Education and Medicine Priority: Provide quality free education and healing to the poor
- The deficit in tax collection should be curbed.
Need to have people richer by service-orientation and not just by money!!
As is said that charity begins at home, it is important for those who are wealthy, to have as much a kind heart so that they can spend a part of their earnings in charity, like the rich and famous Warren Buffet, Bill Gates, Azim Premji, Shiv Nadar, Narayanswamy, Tatas & Birlas etc., Such charity can help in building the welfare of the poor by providing them education, medicine, employment, sanitation and pastoral care to raise the standard of living of the poor.
Responsibility of the citizens
- Everyone should be clear on their future financial needs. They should make a habit of saving first and living within the rest of the money, regardless of earning capacity. Spend-thrift habits and extravagance lifestyle should be curbed
- The poor are getting even poorer with meeting medical expenses. Neighborhoods, personal hygiene and exercise should be prioritized against the risk of lifestyle diseases. Health and life insurance plans should be taken, to protect self against unexpected expenses
- Parents should consider the cost of their children's education as a form of investment. If the children of poor families are well educated, they can prove to be the savior who can bring the families out of poverty. Not only this, but they can also play the role of a catalyst in erasing the financial divide of the society
- These and many other solutions may help the society in becoming one, without any sort of divide – socially, economically or politically!!
Read more:Three critical challenges for higher consumption and growth
