India should adopt a pro-people and nature-friendly economic model to reduce its inequalities
About 90 per cent of India’s workers are in informal employment. Their economic conditions are very poor. Photo for representation from iStock Oxfam released the Survival of the Richest report January 16, 2023 at the start of the World Economic Forum in the Swiss resort town of Davos. The document has brought to light the ever-increasing economic inequalities between the different sections of society in various countries of the world.
The report also has data on some important aspects of the ever-increasing economic inequalities in India.
Some 40.5 per cent of the wealth generated between 2012 and 2021 went to the top 1 per cent of the population, while only 3 per cent went to the bottom 50 per cent, according to the report.
Of the total goods and services tax collected in India, only 4 per cent came from the top 10 per cent, while 64 per cent came from the bottom 50 per cent.
Wealthy people benefit from reduced corporate tax rates, tax breaks and other concessions. During the COVID-19 pandemic, the income and wealth of the bottom 50 per cent of people have decreased.
The number of billionaires in India increased to 166 in 2022 from 102 in 2020. The wealth of Indian billionaires increased by Rs 3,608 crore per day from the start of the pandemic to November 2022. This, even as workers struggled to make ends meet.
The report also brought to light the poor economic condition of women workers, scheduled castes and rural workers.
After the independence of the country, the Planning Commission was formed in 1950. The five-year plans began in 1951. The economic progress of India and the welfare of its people were made the main issue in these plans.
Monitoring and regulation over private sector units was ensured, with priority given to public sector units.
The period from 1951-80 is considered as the planning period. During this period, economic inequalities between the different sections of Indian society decreased. After 1980, planning was put in reverse gear. Since 1991, new economic policies have been adopted in favour of the capitalist / corporate world.
During 2015, the Planning Commission was replaced by the pro-corporate NITI Aayog. There has been a continuous increase in economic inequalities between the different sections of Indian society from 1981 to the present day.
During 1951, about 81 per cent of the country’s population was dependent on the agricultural sector for its livelihood, which was given about 55 per cent of the national income.
In 2018-19, about 50 per cent of India’s population, which was dependent on the agricultural sector for its livelihood, was given only about 16 per cent of the national income.
The country’s agricultural production depends on farmers, agricultural labourers and rural artisans. During the 1960s, when the country was facing a severe shortage of food grains, the government decided to adopt the New Agriculture Technology to overcome this problem.
This technology was a package of high-yielding seeds, assured irrigation, chemical fertilisers, pesticides, fungicides, herbicides and other chemicals, machinery and modern methods of farming.
The hard work of farmers, agricultural labourers and rural artisans and the excessive use of natural resources solved India’s huge shortage of food grains. However, the economic conditions of these groups have deteriorated due to the agricultural policies adopted by the country.
According to official data, farmers and agricultural labourers continue to die by suicide in various states of the country. Among farmers, the deaths of marginal and small farmers by suicide is particularly high, while agricultural labourers are also increasingly dying by suicide.
A very sad aspect in this regard is that women and children from the families of marginal and small farmers as well as agricultural labourers are also dying by suicide. Such families are not even being rehabilitated properly. No data are being collected on rural artisans dying by suicides.
According to the 2011 census, there are 118.8 million farmers and 144.3 million agricultural labourers in India. Some 68.45 per cent of India’s farmers are marginal (farming on less than a hectare), 17.62 per cent are small (1 hectare to less than 2 hectare) and the remaining 13.93 per cent are semi-medium, medium and large farmers.
Read Down To Earth’s coverage of farmer suicides in India
Among these different categories of farmers, the economic conditions of marginal and small farmers are very poor. Most of the farmers in these categories have very few commodities to sell in the market.
Some farmers even sell a part of the grains stored for the whole year in the market to meet their needs of clothes, medicines and other products. Some farmers are also compelled to sell their A-grade agriculture products and buy the lowest grade ones from the market for their consumption.
As a result of the New Agriculture Technology adopted to overcome the problem of huge shortage of food grains in India, the ever-increasing use of herbicides and machinery has reduced employment opportunities for all sections dependent on agriculture.
But it has hit agricultural labourers and rural artisans particularly hard because both these landless classes have no other means of production except to sell their labour.
With the passage of time, there has been industrial progress in the country. Large industrial units are being given more concessions than micro, small and medium industrial units.
Larger industrial units mostly use automated machinery, which results in fewer employment opportunities for industrial workers. Micro, small and medium industrial units provide more employment opportunities. But the neglect of such units by the government compared to large industrial units is reducing employment opportunities in the industrial sector.
Rapid privatisation of public sector industrial units is also one of the reasons responsible for widening economic inequalities.
From 1991 to the present day, there has been considerable progress in the service sector — education, health care, finance and some others. The corporate sector has benefited greatly because of this progress.
The average Indian cannot even dream of availing the services being provided by the corporate sector. A large number of young people migrate to other countries due to the ever-increasing decline in employment in the agricultural, industrial and service sectors in India and the low quality of available employment.
The migration of young people from India to other countries is creating major problems for the country in the form of brain drain, capital drain and loss of demographic dividend.
About 90 per cent of India’s workers are in informal employment. Their economic conditions are very poor. They do not get annual promotion, dearness allowance, bonus and many other facilities. The uncertainty of employment for the coming day keeps haunting them.
It is the need of the hour to control the rapidly increasing economic inequality for the welfare of India’s people.
The share given to the agricultural sector from the national income must be increased at least to such an extent that all classes dependent on the agricultural sector for their livelihood can meet the basic needs of life in a respectable manner.
Adequate concessions for the promotion of micro, small and medium industrial units should be ensured. Priority should be given to the re-establishment of public sector units in the industrial and services sectors.
Oxfam’s 2023 report calls for public education and health services to be prioritised, along with recommending an increase in taxes on corporates as well as ensuring their collection to reduce economic inequalities.
In order to implement these suggestions, the prosperity line also needs to be defined in addition to redefining the poverty line. It is necessary to shift towards a mixed economy in which the public sector is the main priority and there is monitoring and regulation of the private sector’s functioning.
To do this, it is necessary to adopt a pro-people and nature-friendly economic development model instead of a pro-corporate world economic development model.
Gian Singh is former professor, department of economics, Punjabi University, Patiala
Views expressed are the author’s own and don’t necessarily reflect those of Down To Earth
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