The crisis of inequality: The growing divide between the haves and have-nots

The spoils of ridiculously obscene wealth are unashamedly on display all around us. The sight of a skyscraper in the backdrop of a dingy slum is something that we as a society have learned not to question. However, the subject was pushed into our everyday vocabulary last week when Oxfam released its report on Inequality. During the pandemic pockmarked by the untold loss of lives and livelihoods, 84% of Indian households suffered a decline in their income, and more than 4.6 crore Indians have fallen into extreme poverty. However, the number of billionaires in India grew by 40 who added an additional 30 lakh crore (USD 406 billion) to their wealth. India now counts more billionaires than France, Sweden and Switzerland combined. With a combined wealth of USD 719 billion, the richest 142 billionaires in India are now worth more than the poorest 55.5 crore Indians.

India is not the only country to have created billionaires. The world's 500 richest people added more than $1 trillion to their net worth last year, according to the Bloomberg Billionaires Index. The wealth of the world’s 10 richest men has doubled since the pandemic began. So, what makes India exceptional in that regard, you may wonder? India is now in line with sub-Saharan Africa accounting for the highest increase in poverty. The United Nations says that half of the new poor globally are coming from India. As per the World Food Programme, India is also home to a quarter of the world's undernourished people. What we are looking at is inequality reaching obscene proportions in India.

63 million Indians are pushed into poverty because of healthcare costs every year - almost two people every second. Over the past two years, thousands of people died because they did not get vaccines in time, even though those vaccines could have been more widely produced and distributed if the technology had been shared. They died because they did not get essential hospital care or oxygen when they needed it, because of shortages in underfunded public health systems. They died because they could not be treated in time as public health facilities were overburdened and they could not afford private care. They have died of hunger because they could not afford to buy food. They died because their governments could not or would not provide the social protection the essentials to survive the crisis. And while they died, the richest people in the world got richer than ever and some of the largest companies made unprecedented profits. And this is the hard truth that the pandemic brought home to us. Unequal access to income and opportunities does more than creating unjust, unhealthy, and unhappy societies: it actually kills people.

So, what has contributed to the accumulation of wealth in the hands of the few?

The obscene wealth inequality in India is not just a result of an economic system rigged in favour of the super-rich. It is a combination of various factors that have perpetrated this “economic violence”. These are by no means a definitive list but only serve as an indicator of where we may just have let the issue slip.

• The national minimum wage has increased only by 2 rupees over the last 5 years and even now is a measly 178 rupees ($2.4) a day. In 2019, India was estimated to have 42.4% of its employed workforce who were living on $3.20 a day. A minimum wage worker in rural India determined to fight his fate will need 941 years to earn what a top paid executive at a leading Indian garment company earns in a year.
• Increasing privatizations in the health and education sectors while there is even lesser Central funding to local administrations. 63 million Indians are pushed into poverty because of healthcare costs every year - almost two people every second. USA’s healthcare is 17% of its GDP while China’s is 5.4% of its GDP. In comparison, our healthcare expenditure has fallen from 3.3% of the GDP in 2010 to 3% in 2020.
• Government’s misplaced priorities where populist measures attract higher funding over issues of social welfare. The Central Vista project, the building of memorials, temples, and statues are only a few examples bearing testament to the government’s misplaced priorities.
• Abolition of a wealth tax in 2016, steep cuts in corporate levies, and an increase in indirect taxation helped make the rich richer
• Then there is the infamous issue of tax evasion by the rich. The Oxfam report, based on the leaked Pandora Papers, also highlighted that more than 380 Indians had 200 billion rupees stashed away in offshore companies and private trusts globally for tax evasion. As per the Tax Justice report, India loses USD 17 billion annually to global tax abuse committed by its multinational corporations and individuals, which is equivalent to almost 80% of our health budget.
• Lastly, the lack of spirit of giving amongst the rich. In 2021, there were 1,007 individuals with personal wealth in excess of ₹1,000 crore. Of these, only 72 individuals donated more than ₹10 crore (1% of their wealth). These figures paint a picture that runs contrary to the general perception - that as our people get wealthier, they are likely to become more generous.

How do we reset the scales?

Oxfam has made a pitch for the government to revisit its policies to redistribute wealth and consider higher taxation on the super-rich. It noted that the fortune of India's 10 wealthiest billionaires would be enough to fund the school and higher education of the nation's children for more than 25 years. To drive home the point, it analyzed that just a 1% wealth tax on 98 richest billionaire families in India can finance Ayushman Bharat, the national public health insurance fund of the Government of India for more than seven years.

Now, this may just be a utopian fantasy and unlikely to happen anytime soon. The change, as always will need to begin with us. Government policies alone will not tilt the heavily lopsided scale of social justice. We as individuals are largely responsible for it and we need to take the first step to move the needle. Paying our taxes, donating a little more, saying no to corruption, and prioritizing people over profit, are only some of the ways to ensure basic human dignity for every individual. Alternatively, we can just wait for 941 years for our average minimum wage worker to earn enough to live the life currently enjoyed by a top executive in India.