widening gap

Source: The Hitavada      Date: 24 Feb 2018 10:05:10

THE caution issued by Oxfam India that inequality is rising in the country for the last three decades, so much so that total wealth of the country’s billionaires is 15 pc of the GDP, should awaken the policy planners to the stark reality of the huge gap between the nation’s rich and poor. The Oxfam report puts the blame squarely on the lopsided policy planning at the highest level of decision making, especially during the days of unprecedented economic crisis and when doors were opened for private investment in various sectors, hitherto out of bounds for them, launching massive economic reforms, dismantling the license-permit raj to unleash the real potential of the Indian economy. 

It was for the first time that the real potential of the Indian economy was known to the country’s own people and to the world as well as doors for investment opened through liberal policy changes. This brought about astounding and unbelievable changes in the Indian economy and within a matter of just two decades the country was being counted as one of the rapidly rising economic superpower, leaving behind the most advanced countries of the West like France, Germany and Britain, next only to the United States, China and Japan. And the growth story is yet to be completed with several developed countries continuing to make a beeline with investment offers in various sectors that too on India’s terms.

There is no denying that post-liberalisation of the nineties of the last millennium has changed the face of India beyond recognition. All this was possible because the Governments of the day consciously adopted policies that gave free hand to entrepreneurs to implement their ideas and investment plans without the fear of the Government becoming the obstacle in their progress. As much of the red-tape is being sought to be cut and efforts continue to snap that aberration of the British era, investors are breathing more freely these days.

While this is being welcomed in domestic business circles and all over the world as positive signs for ‘ease of doing business’ with stress on ‘make in India’, an aberration has sneaked in. The aberration is that in terms of human development, India’s growth story is increasingly appearing to be a lopsided one with the rich getting richer having vast opportunities open to them and the poorer ones languishing where they were 30 years ago. While Indian manufacturing has registered roaring success, there is a flip side to it: it has relied more on capital goods and automation to gain the benefits of economies of scale through capital intensive investment than rather labour-intensive approach. This leaves behind a question mark over the manufacturing sector’s ability to generate jobs for the millions.

Thus while there is growth in manufacturing and investment, there is no proportionate generation of employment for willing hands. The situation is worse for the unskilled labour for whom there are no takers. And the Oxfam report lays emphasis on this darker side of the current economic upsurge. Its potential to cause social upheaval does not seem to have been adequately taken note of or has been ignored at policy making level.

Oxfam’s concern that a country that is already fractured on multifarious caste, religious, regional and gender lines the addition of economic disparities deserves urgent attention of the society as a whole and the Government as the policy making authority. As if to address this anomaly in the country’s economic policy making over the last three decades, Finance Minister Mr. Arun Jaitley has given substantial weightage to issues concerning rural sector by announcing more outlays for the agriculture sector. But the issue of economic disparities is not going to be addressed in one budget. It may require several such budgets to raise the incomes of the massive majority of the deprived.