One of the biggest challenge India has to deal with is
inequalities. Indeed, according to a report (Credit Suisse,2015) the richest 1% Indians owned 53% of the country’s wealthwhile
the share of the top 10% was 76.30% which means that 90% of India own less than
a quarter of the country’s wealth. Moreover, the scenario is quite dramatic if
we consider that this trend has been increasing for the last decades. In fact,
in 2000, the share of the richest 1% in national wealth was 36.80% and that of
the top 10% was 65.9%.A report from the Work Bank on the Water and Sanitation Program
(1999) and an article from the Hindustrantimes (2015) shows us a pivotal point
that needs to be seriously discussed. This is the government willingness to
reduce inequalities among the population and particularly, the inconsistent
electoral promises.
Indeed, despite the propaganda, food and fuel prices continue to
soar, the agrarian crisis is deepening and the rural
India’s average daily wage rate is falling drastically as well as the
consequent rising unemployment is leading to a lower purchasing power and an
overall fall in the domestic demand. Moreover, basic needs such as drinking
water is 10 to 20 times more expensive for poor people than it is for rich.
Government subsidies accounts for 40 billion Rupees per year, but most of the
benefits go the better off and the investments are far below of what is needed.
Indian
Government uses purchasing power parity (PPP) index instead of per capita
income in order to indicate the wealth distribution among India so to give to
international investors confidence and a sense of stability by depicting a
misleading picture . Indeed,
with the first criteria, the per capita income in 2006 was $830,
while with the second criteria was about $4000. By using the PPP index India
ranks 7th among the most developed economies in the world in 2018.
However, several issues need to be discussed.
India is living in a dual economy. Indeed, it belongs at the same
time to the first world and to the third one thus, we have twoPPP indexes according
to the different world that we are looking at. The gap among those two is
overwhelming and talking about mean or per capita referred to India as overall
is complex as well as pointless exercise.
Most of the time the poorest are treated as an “accident”. An
hindrance to the economic development, a class almost forgotten. According to the UNDP, 80,4% of the population lives with less than
2$ per day, only 61% of the population is capable of read and write (73,4% are
men and 47,8% are women). Infant mortality rate is 56 every 1000 births and undernourishment has
reached the 20%.
The picture we can draw is the following. India is a country that
is pursuing a double trajectory with strong contradictions. On one side, the
country is moving towards an ever industrialized trend on the attempt to reach
a place among the most industrialized economies of the world while, on the
other side, the country is “ dragging behind the water” the poorest part of the
population to whom economy could be
considered Medieval.
The so called “trickle-down
theory” which states that economic
benefits provided to upper income level earners will help society as a whole as
their extra wealth will be spent into the economy, providing wealth for lower
income earners and creating jobs, in realty is not working. Indeed, it deepened
the PPP gap among rich and poor.
A study carried out by McKinsey,
based on the National Council of Applied Economic Research in India has
identified five main categories.
1. Deprived ( less than 90.000₹, below 1700€)
1. Aspirers (90.000-200.000₹, 1700-3800€)
2. Seekers (200.000-500.000₹, 3800-9000€)
SStrivers (500.000-1.000.000₹, 9000-18.000€)
Globals (over 1.000.000₹)
The graphic depict the % of people belonging to the a certain
income class. Income inequalities are barely reducing if we consider the
economics growth India is facing (real GDP growth rate is 7.5%, 5th
in the world) or at least at very lower rate compared to the “miracle” is
confronting itself. This lead to the conclusion that growth is not sufficient
to reduce poverty. Indeed, two French economists, Thomas Piketty and Lucas Chancel, compared India’s income
disparities nowadays and during the colonialism era in an article called «Indian income inequality, 1922-2014: From British Raj to Billionaire
Raj?». Results were dramatic. Currentincome inequality is as
broad as during the British Empire and according to a study carried out by the Pew Research
Center in 2015
the real Indian middle class is only 2% of the whole population.Deepak Nayyar, Professor Of Economics at the New Delhi University,
argues that the misleading presumption that economic growth and economic
efficiency are necessary and sufficient to improve the living conditions of
people is still deeply entrenched in economics labour has changed the nature of labour since it
reduced thebargaining power of trade unions. Inflation management has turned
into obsession for manycountries so much so that governments have been forced
to adopt deflationary macroeconomicpolicies that have reduced employment.
Financial liberalization has created huge publicand private debt so that a new
renter class has emerged and the concentration in the ownership offinancial
assets has worsened the income distribution. Moreover, global competition has
led largeinternational firms to consolidate market power through mergers and
acquisitions which hasbecome more oligopolistic than competitive. Competition
for export markets and foreigninvestment between countries has lead to an
unequal distribution of gain from trade and investment(Nayyar 2003).
Globalization has created opportunities for some
people and some countries but for many others hasbrought about risks and
threats as well as an increase in both poverty and inequalities.
Thedistribution of benefits and costs are uneven and unequal. There are some
winners, mostly in richcountries and many losers in both the industrialized and
developing world. It is possible to depictwho the winners and the losers are if
we consider human beings, firms and economies. From thefirst category, we find
as winners asset-owners, profit-earners, those with professional, managerialand
technical skills while losers are asset-less, wage-earners, debtors,
uneducated, semiskilled orunskilled people. Concerning firms, large,
international, global, risk-taker and technology-leaders
triumph over small, domestic, local, risk-averse and
technology-followers. Lastly, in economies,capital-exporters,
technology-exporters, net lenders, nations with strong physical and
humaninfrastructure are the winners, while capital-importers, technology
importers, net borrowers andthose with weak physical and human infrastructures
are the losers (Nayyar 2003: 72-80).When people cannot join the paradise of consumerism,
alienation and frustration prevail. Thisexclusion is socially harmful. In fact,
some seek refuge in drugs, crime, violence, religiousfundamentalism and
cultural chauvinism. However, outcomes are not always as extreme. It
couldintensify social tension and provoke social fragmentation within
countries.
CONCLUSION
To an equal extend, income and purchasing power inequalities can
be projected to water inequalities. The very first fundamental need. Government cannot turn a blind eye on this
issue. Indeed, the problem could be tackled in different ways.
1.
Make inequality a political Campaign. In fact, those inequalities are neither acceptable nor
sustainable any longer among the population.
Water needs to be available to the whole population at the same price,
frequency and quality. Thus, making development inclusive is pivotal if not
essential. Safe drinking water and sanitation are
fundamental to human development and wellbeing and inadequate access to clean
water undermines people’s nutrition and health through water-borne diseases and
chronic intestinal infections. In this way, rich and privileged people will be
healthier while the deprived and unlucky ones sicker and a with lower life
expectancy.
Introduce land reforms and raise taxation for the wealthy. Preventing monopoly of control over water,
forest and mineral resources will be of greater help. Moreover, the equality of opportunity needs to increase through good quality and
universal public provision of essential amenities and social services. In addition,
raising public resources could happen by taxing the wealthy more and by
increasing the taxation 1.
of corporations which took enormous advantages from the boom and
doubled their share, but they have not been taxed accordingly.
Moreover, by depriving people from drinkable water the globally
recognized human right to safe drinking water and sanitation is infringed. A
Fully implementation of those rights is required. What is the rationale of some
people having more rights than others to enjoy basic needs?.
-Stefano
WASH Intern
REFERENCES:
Anil Padmanabhan (2015), “India’s next big
challenge: inequality”,
[online]<https://www.livemint.com/Opinion/lJIQmqwIltTJSqruSaVsAO/Indias-next-big-challenge-inequality.html>[Data
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Antonio Armellini
(2017), L'elefante ha messo le ali:
L'India del XXI secolo.
Lucas Chancel Thomas Piketty (2017),«Indian income inequality, 1922-2014: From British Raj to
Billionaire Raj?».
Nayyar, Deepak (2003),
Globalization and Development, in H.-J. Chang, Rethinking Development
Economics, Anthem Press, p. 60-80.
Lyla,
Mehta (2015), “Without ensuring universal access to water, there can be
no food security”,[online]<https://www.theguardian.com/global-development/2015/may/15/water-access-food-security-land-issues-nutrition-policymaking>
[Data access: 10th July 2018].
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