Context: The income of 84% of households in the country declined in 2021, but at the same time the number of Indian billionaires grew from 102 to 142, an Oxfam report has said, pointing to a stark income divide worsened by the Covid pandemic.
Relevance: Mains: GS II-
- Poverty, Issues Related to SCs & STs, Issues Related to Women, Issues Related to Minorities, Human Resource, and Inclusive Growth.
- Oxfam Key Findings, Causes of Inequality, Impact of the Covid-19.
The Oxfam report, “Inequality Kills’’, released ahead of the World Economic Forum’s Davos Agenda, also found that as Covid continued to ravage India, the country’s healthcare budget saw a 10% decline from RE (revised estimates) of 2020-21
- Oxfam is a confederation of 19 independent charitable organizations focusing on the alleviation of global poverty, founded in 1942 at Oxford, England, and led by Oxfam International.
- It is a major nonprofit group with an extensive collection of operations.
- Oxfam's programs address the structural causes of poverty and related injustice and work primarily through local accountable organizations, seeking to enhance their effectiveness.
- Oxfam's stated goal is to help people directly when local capacity is insufficient or inappropriate for Oxfam's purposes and to assist in the development of structures that directly benefit people facing the realities of poverty and injustice.
- In November 2000, Oxfam adopted the rights-based approach as the framework for all the work of the Confederation and its partners.
- Oxfam recognizes the universality and indivisibility of human rights and has adopted these overarching aims to express these rights in practical terms:
- the right to a sustainable livelihood
- the right to basic social services
- the right to life and security
- the right to be heard
- the right to an identity
|Major Findings and Suggestions of the Report|
India: extreme inequality in numbers
- While India is one of the fastest-growing economies in the world, it is also one of the most unequal countries.
- Inequality has been rising sharply for the last three decades. The richest have cornered a huge part of the wealth created through crony capitalism and inheritance.
- They are getting richer at a much faster pace while the poor are still struggling to earn a minimum wage and access quality education and healthcare services, which continue to suffer from chronic under-investment.
- These widening gaps and rising inequalities affect women and children the most.
Let's look at the numbers-
The top 10% of the Indian population holds 77% of the total national wealth.
73% of the wealth generated in 2017 went to the richest 1%, while 67 million Indians who comprise the poorest half of the population saw only a 1% increase in their wealth.
There are 119 billionaires in India. Their number has increased from only 9 in 2000 to 101 in 2017.
Billionaires' fortunes increased by almost 10 times over a decade and their total wealth is higher than the entire Union budget of India for the fiscal year 2018-19, which was at INR 24422 billion.
Many ordinary Indians are not able to access the health care they need.
It would take 941 years for a minimum wage worker in rural India to earn what the top paid executive at a leading Indian garment company earns in a year.
|Healthcare as a luxury good|
- While the Indian government barely taxes its wealthiest citizens, its spending on public healthcare ranks among the lowest in the world. In the place of a well-funded health service, it has promoted an increasingly powerful commercial health sector.
- As a result, decent healthcare is a luxury only available to those who have the money to pay for it. While the country is a top destination for medical tourism, the poorest Indian states have infant mortality rates higher than those in sub-Saharan Africa. India accounts for 17% of global maternal deaths, and 21% of deaths among children below five years.
The scale of the gap between rich and poor today:
- The India supplement of the global report says that in 2021, the collective wealth of India’s 100 richest people hit a record high of Rs 57.3 lakh crore (USD 775 billion).
- In the same year, the share of the bottom 50% of the population in national wealth was a mere 6%.
- More than 4.6 crore Indians are estimated to have fallen into extreme poverty in 2020. This is nearly half of the global new poor according to the United Nations.
- The income of 84% of households in the country declined in 2021, but at the same time the number of Indian billionaires grew from 102 to 142.
- During the pandemic (since March 2020, through to November 30, 2021), the wealth of Indian billionaires increased from Rs 23.14 lakh crore (USD 313 billion) to Rs 53.16 lakh crore (USD 719 billion).
- More than 4.6 crore Indians, meanwhile, are estimated to have fallen into extreme poverty in 2020, nearly half of the global new poor according to the United Nations.
- There was a 6% cut in allocation for education, while the budgetary allocation for social security schemes declined from 1.5% of the total Union budget to 0.6%.
- India has the third-highest number of billionaires in the world, just behind China and the United States, with more billionaires than France, Sweden, and Switzerland combined- a 39% increase in the number of billionaires in India in 2021.
- This surge comes at a time when India’s unemployment rate was as high as 15% in urban areas and the healthcare system was on the brink of collapse.’
- Oxfam has pointed out that about one-fifth of the increase in the wealth of the richest 100 families was accounted for by the surge in the fortunes of a single individual and business house – the Adanis.
Blow to Gender parity:
- The pandemic has set gender parity back from 99 years to now 135 years. Women collectively lost Rs 59.11 lakh crore (USD 800 billion) in earnings in 2020, with 1.3 crores fewer women in work now than in 2019.
- It has never been so important to start righting the wrongs of this obscene inequality by targeting extreme wealth through taxation and getting that money back into the real economy to save lives.
- The Oxfam India briefing also points out the increase in indirect taxes as a share of the Union government revenue last four years, while the proportion of corporate tax in the same was declining.
- The additional tax imposed on fuel has risen 33% in the first six months of 2020-21 as compared to the last year, 79% more than pre-Covid levels. At the same time, the wealth tax “for the super-rich’’ was abolished in 2016.
- Lowering corporate taxes from 30% to 22% to attract investment last year resulted in a loss of Rs 1.5 lakh crore, which contributed to the increase in India’s fiscal deficit.
- These trends show that the poor, marginalized, and the middle class paid high taxes despite going through the raging pandemic while the rich made more money without paying their fair share.
Increase in Out-of-Pocket Expenditure (OOPE):
- Data from the National Sample Survey (NSS) (2017-18) shows that Out-of-Pocket Expenditure (OOPE) in private hospitals is almost six times that in public hospitals for inpatient care, and two or three times higher for outpatient care.
- The average OOPE in India is at 62.67%, while the global average is 18.12%.
- The report further says that despite the country’s federal structure, the structure of revenue kept the reins of resources in the Centre’s hands and yet the management of the pandemic was left to the states – who were not equipped to handle it with its financial or human resources.
|Alarming trends: How Covid-19 created an inequality explosion|
- The biggest surge in billionaire wealth ever:
- The world’s small elite of 2,755 billionaires has seen its fortunes grow more during Covid-19 than they have in the whole of the last fourteen years combined.
- This is the biggest annual increase since records began. It is taking place on every continent.
- It is enabled by skyrocketing stock market prices, a boom in unregulated entities, a surge in monopoly power and privatization, alongside the erosion of individual corporate tax rates and workers' rights and wages. Since the pandemic began, a new billionaire has been created every 26 hours.
- The cost of inequality is in human lives:
- A kind of economic violence is perpetrated when structural policy choices are made for the richest and most powerful people. This affects the poorest people, women and girls, and racialized groups most.
- Inequality is deadly. Report estimates that it contributes to the deaths of at least 21,300 people each day- or one person every four seconds.
- This is a highly conservative estimate for deaths resulting from hunger, lack of access to healthcare, and climate breakdown in poor countries, as well as gender-based violence faced by women and rooted in patriarchy and sexist economic systems.
- Millions of people would still be alive today if they had had a Covid-19 vaccine- but they were denied a chance while big pharmaceutical corporations continue to hold monopoly control of these technologies.
- The emissions of the richest people are driving this Climate Change crisis, with the CO2 emissions of 20 of the richest billionaires estimated on average to be 8,000 times that of the billion poorest people.
- The Covid-19 pandemic feeds on inequality:
- Inequality causes direct harm to us all:
- Inequality isn’t by chance, but by choice:
- Vaccine Apartheid is danger to lives:
- Rich countries may back their pharmaceutical monopoly billionaires and hoard vaccines to protect their populations, but in so doing they push their own people toward risk from the mutations that vaccine apartheid is creating.
- Vaccine apartheid as a concept calls attention to the effects of inequitable vaccine distribution policies on historically subordinated peoples.
- Claw back extreme wealth into the real economy to tackle inequality: All governments should immediately tax the gains made by the super-rich during this pandemic period.
- Redirect that wealth to save lives and invest in our future: All governments must invest in evidence-based and powerful policies to save lives and invest in our future.
- The legacy of the pandemic must be quality, publicly-funded, and publicly-delivered universal healthcare.
- Change rules and shift power in the economy and society: This includes ending sexist laws, including those which mean that nearly 3 billion women are legally prevented from having the same choice of jobs as men.
- Governments have huge scope to radically change course. And they have a choice. They can choose a violent, sexist and racist economy in which billionaire wealth booms, in which millions of people are harmed or killed, and billions of people are impoverished due to inequality; in which we burn the planet and our future human existence.
- Or they can choose an economy centred on equality, in which nobody lives in poverty, and neither does anyone live with unimaginable billionaire wealth; in which there is freedom from want; in which more than just survive, everyone has the chance to thrive- and to hope; in which inequality no longer kills.
- That choice is the choice facing this generation, and it must be made now.