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IS INDIA BECOMING MORE UNEQUAL ?

Vibhu Agiwal writes about equality, or a lack thereof, by focusing on the two-pronged challenge posed by economic and gender inequality in India. Are these disparities growing?

Inequality, as a question about how much is there and how much should there be, has plagued the best minds of our planet since many centuries. But before we delve into answering this question, again for India, It pays off to ask a more basic question: Equality of what?


Is it equality in opportunities that flow to different genders in India?


Is it about the wealth distribution between the poor, the rich, and the middle class?


Or is it about inequality in attention that Delhi is receiving on her climate problems as compared to Jaipur?


We shall in this piece, consider gender and economic inequality. There’s no good reason of why we should start from these two themes, apart from the fact that India as a nation is ravaged by both these inequalities. (As will be seen)


Now, in terms of economic and more precisely income inequality, we can think of it in three different ways, all mutually related, i.e., the process, the starting points, and the ending points.


This classification is tied to how we can think of the income-earning as a process with three elements: 1) as a race between different people that has a starting point & 2)the process or the act of running the race and 3)outcome of that race, or the ending point.


The process broadly is about how income is earned by different people, in a sense, what is the process that they use for earning, and has the process itself become unequal. It would be a little difficult to comment on the equality of the process itself since different people use different jobs for earning their livelihood and comparing them to think about whether inequality has increased/decreased would be like comparing apples and oranges. So, we move to the next two ways of thinking about income inequality: starting points and ending points.


What I mean by starting point is that for every person who enters the job market, starts any business, and so on; for everyone, there is a starting point in their careers, in terms of the opportunities they get at that point. So, for example, in a country where education levels are relatively better, where health epidemics are less frequent, one can believe that the starting points are relatively more equal or that the rules of games aren’t stacked against someone in particular and that everyone has a better possibility of making their careers what they want.


In Economic jargon, this idea is called socio-economic mobility. It predicts what are the chances of someone being able to climb the socio-economic ladder at a particular place. In terms of this starting point, a recent study predicts that with time, differences in starting points in India have increased with a lesser and lesser number of people having access to more opportunities. (ORF 2020). Additionally, according to the recent most report by World Economic Forum, India stands at 76th position out of 82 countries in terms of equal starting points/better socio-economic mobility, behind Sri Lanka, Egypt, and many other nations.


In terms of ending points, i.e., the final wealth people have accumulated over time in India, again we see that there is an increasing divergence between the bottom 50% of people in India and what the top 1 % earn. Note the following curve:


(World Inequality Database 2021)


The y-axis represents the share of wealth. The red line represents the top 1% of the Indian population and the blue line represents the share of wealth with the bottom 50%. As can be clearly seen, since 1980, the difference between the two lines has been increasing, implying that India has become more unequal with time.


Today, around 2 Crore people own 1/3rd of this nation’s wealth and around 70 Crore have 1/20th of the same.


As we just saw, on both starting and ending points in Wealth and opportunities, India has become more unequal with time. Now, let us move to a completely different dimension, i.e. Gender.


Even in terms of gender, there are a lot of themes that can be thought of. Political Inequality between men and women, economic opportunities, gaps in education, legal inequality, violence and discrimination at workplaces and so on.


To come up with a comprehensive outlook on gender inequality, we use the WEF’s gender inequality Index, which considers four factors while measuring the gender inequalities between men and women: economic participation and opportunity, education, health parameters and political empowerment. The index’s formula has been same for many years now, so we can track whether India has become equal over time. Note the following graph carefully:


(Author’s construction using WEF’s reports)


The blue line represents India’s position in the many countries in WEF’s sample. So for example, when we see that 2020’s figure at around .8, it means 80% of countries of the sample are doing better than India in Gender Equality.


Now the trend seems somewhat stagnant and unmoving. And that should worry us. It means that for the past many decades, the situation for women in India in totality hasn’t moved anywhere. Obviously, one can make a counterargument that things might have improved in terms of education or health, in some cities over some other places. But India needs to make a lot more progress, as compared to itself and as compared to other countries as well. The fact that things are unmoving when the status quo in Indian societies is stacked against women, should push one to think in this direction; can we continue being lazy about this anymore?


Given that we have looked at two broad themes of equality, one question still pertains; how much inequality is tolerable? The reason we ask to explore this question here is that is important to think about the question of how things should be along with how things are. Doing one without the other might lead us to faulty conclusions.


One conclusion, from philosophy, that we can readily use is that the opportunity a person gets shouldn’t be systematically related to what their identity is as a person. In other words, everyone should have the same starting points. If someone requires some additional support, if the rules of the game are stacked against them systematically, then they deserve additional support.


One can believe that, once the field has been leveled in terms of starting points (i.e. equality of opportunity for all or no-discrimination), whatever be the outcome of the game, fair and just and is driven by how well a person performs and therefore deserves.


If you believe this argument, then inequality of income or gender outcomes isn’t a problem. But if the starting points are systematically different for different people, then there is a need to equalize them. The idea behind taxation and welfare policies for the poor or affirmative action policies for Scheduled Castes in India somewhere flows from this idea itself.

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