Are the rich getting richer?
The business baron who has a finger in every pie, as far as entrepreneurial interests are concerned, has blazed past fellow billionaire Mukesh Ambani and Chinese magnate Jack Ma to bag the coveted spot in the top three of the Billionaires Index, a feat achieved by an Asian person for the first time.
A recent development involving industrialist Gautam Adani being declared as the third richest individual globally caused some flutter in the affluent circles of India. The business baron who has a finger in every pie, as far as entrepreneurial interests are concerned, has blazed past fellow billionaire Mukesh Ambani and Chinese magnate Jack Ma to bag the coveted spot in the top three of the Billionaires Index, a feat achieved by an Asian person for the first time.
At a time like this, questions regarding India’s income equality status crop up, considering how we have fared poorly on such indices for decades together. As per the World Inequality Report released in December 2021, India was designated as one of the poorest and most unequal countries, with the top 1% owning 33% of the nation’s wealth. The report added that the top 1% of the population earned over one-fifth (21.7%) of the total national income in 2021. On the other hand, the bottom 50% made just 13.1% of the total national income. The top 10% of the population also owned 57% of India’s national income in 2021. It’s something in line with trends seen since the mid 90s when the top 1% bagged 38% of all additional wealth accumulated, with an acceleration since 2020.
In numeric terms, India’s average household wealth is pegged at Rs 9.83 lakh while the bottom 50% own next to nothing with an average wealth of Rs 66,280. India’s average national income vis-a-vis the adult population is about Rs 2.04 lakh. This metric also exhibits a discrepancy between the haves and have nots, as the bottom 50% earns Rs 53,610 while the top 10% earns more than 20 times of this sum, at Rs 11.6 lakh. The deregulation and liberalisation policies executed in India since the mid-1980s have catalysed “one of the most extreme increases in income and wealth inequality observed in the world,” the study has emphasised.
It’s not a phenomenon restricted to India as the impact of such economic reforms have resulted in glaring economic inequalities in low and middle income nations like Brazil and China, as well as developed nations. In high income, capitalism-oriented nations like the US, some are very unequal. Whereas in Sweden, which is governed by the Nordic model of economic and social policies, there is a sense of relative equality. The Nordic model applicable to Nordic nations comprises a comprehensive welfare state, coupled with multi-level collective bargaining, based on the economic principles of social corporatism. A big percentage of the workforce is unionised and employed with the public sector, with almost 30% of the population in key areas such as education and healthcare.
The bottom line is that three decades of massive trade and financial globalisation has taken its toll on some of the most vulnerable sections of our society. The adage that the rich keep getting richer and the poor keep getting poorer is as potent today as it was during the peak of Western imperialism during the 20th century, which was ironically, marked by the same levels of inequality. The only difference between then and now is that in rich countries, the government’s intervention managed to rein in a massive rise in poverty, whereas in poor nations, the people were left to fend for themselves – much like the daily reality for millions of Indians. And it’s a reminder of the manner in which social states are placed better in battling poverty.