The question of inequality

Print edition : November 02, 2007

Street children in Allahabad. Almost one-half of Indias children are malnourished and underweight. - RAJESH KUMAR SINGH/AP

Income and wealth inequalities are rising alarmingly in India but they barely figure in public discourse. Yet, they threaten to undermine social cohesion.

Street children in

October 17 has been designated the United Nations International Day for Poverty Eradication. This fortnight also marks the 90th anniversary of the October Revolution in Russia, which mounted historys greatest challenge to the global capitalist order, itself based on privilege, inequality, and exploitation. So this is a good occasion to take a hard look at poverty, want and inequality in the world and in India.

The overall picture is so dismal that public-spirited citizens must hang their heads in shame. Despite a glut of food, and a spectacular increase in the globes capacity to grow more, hunger remains one of the worlds major problems. According to the International Food Policy Research Institute in Washington, 850 million people worldwide, or one in seven human beings, go hungry every day.

In the Institutes Global Hunger Index, India belongs to the bottom fourth of the worlds nations, with a rank of 94 (among 118 countries). This score is even lower than Indias relative Human Development Index rank (126 of 177 countries). Indias hunger index rank is way below Chinas (47), and lower even than Pakistans (88). (In HDI, by contrast, India stands six ranks higher than Pakistan.) One reason for this abysmal state of affairs is that almost one-half of Indias children are malnourished and underweight.

Besides chronic hunger, another index of Indias poverty has recently received media exposure through a report of the National Commission for Enterprises in the Unorganised Sector. Based on National Sample Survey data, this shows that a frightening 77 per cent of our population lives on a pathetic Rs.20 (half a U.S. dollar) a day. This brings out the depth and pervasiveness of poverty in India far more starkly than official poverty line numbers, measured in calorie consumption, based on extrapolation from the prices of a certain basket of goods.

The 77 per cent translates into some 840 million citizens. Their subsistence is simply incompatible with any notion of human-level existence with dignity. Clearly, we are condemning the vast majority of people to live wretched, impaired or disabled lives under which they cannot develop their elementary potential as human beings.

Even gloomier is the story of rising inequalities almost everywhere in the world, and especially in India. Inequality is now being hotly debated in many countries, including the United States (even under George W. Bush), parts of Western Europe (which have been relatively non-hierarchical societies), Latin America (the worst victim of neoliberal dogma), and even China, where the central focus of the Communist Party Congress is on fighting poverty, the regulation of incomes and gradually reversing growing income disparities.

Scholars and policymakers are now discussing the disparities issue with a level of concern and keenness not seen since the 1970s. Notable here is the publication last December of the World Distribution of Household Wealth report by the World Institute for Development Economics Research, Helsinki, which makes the shocking disclosure that the richest 2 per cent of the worlds adults own more than half of global household wealth.

The richest 1 per cent alone owned 40 per cent of global assets in 2000, and the richest 10 per cent accounted for 85 per cent of the world total. In contrast, the bottom half of the world adult population owned barely 1 per cent of global wealth. There is now a surfeit of academic literature on poverty, inequality and globalisation, on trade and income distribution, poverty and unemployment, and measurement of inequalities, and so on.

Why, even the International Monetary Fund has devoted its latest World Economic Outlook report on rising inequalities amidst increasing per capita incomes across regions and population segments. One may disagree with the IMFs view that it is not the globalisation of trade or finance, but technological advancement, that is responsible for the rising income disparities. But its focus on inequalities is noteworthy.

Among the most revealing and disturbing recent analyses of Indias disparities scenario is Patterns of Wealth Disparities in India during the Liberalisation Era (Economic and Political Weekly, September 22). This shows, on the basis of National Sample Survey data, that there was a perceptible (and probably underestimated) increase in inter-personal wealth inequality in India between 1991 and 2002.

The top 10 per cent of the population increased its share of total national wealth to 52 per cent, while the share of the bottom 10 fell to just 0.21 per cent. Some of our high Gini coefficients (for instance, 0.92 and 0.99 in respect of ownership of machinery, transport or bank deposits) are probably the highest anywhere. (1.0 represents total inequality).

Even more distressing numbers are contained in the Asia-Pacific Wealth Report just released by Merrill Lynch-Cap Gemini. This says that the number of Indias high net-worth individuals (HNIs) has increased by 20.5 per cent over the past year to reach 100,000. (HNIs have net financial assets of at least $1 million, excluding primary residence and consumables.) Even more important than this rapid increase is the disclosure that this minuscule minority holds $350 billion in assets or about half of Indias entire gross domestic product!

The contrast between this obscene concentration of wealth at the very top, and the prevalence of mass poverty, with the most appalling conditions of life at the bottom, should shock us all. Not only is this morally indefensible and unacceptable in itself; but coupled with deep and entrenched inequalities of opportunity in this super-hierarchical, casteist society, it is especially repugnant.

Such extreme, and yet growing, inequalities belie the hope that the vast majority of Indias citizens believe, or will come to believe, that this society is based on a modicum of justice and fair play. They also make nonsense of any appeal to the common or national good as the basis of making social, economic and political decisions. In the absence of such an appeal, citizens cannot be expected to have faith in the state and its decision-making apparatuses, not even in the rule of law, leave alone obedience to authority.

Extreme inequalities assuredly violate the minimal level of social cohesion that is necessary for decency in civic life and for the moral, psychological and social foundations of democracy.

Author Patwant Singh has lucidly, and starkly, documented the dualistic state of Indian society in his extremely readable and accessible new book, The Second Partition: Fault-Lines in Indias Democracy (Hay House India, New Delhi, 2007). He has warned of the dangers of a lack of minimum social cohesion.

He points out: The planners of the new Indian democracy visualised a dazzling future [But their solemn assurances to Indian citizens were soon betrayed]. After spelling out how the new Republic would safeguard its peoples every right, the pledge was broken, the promises remained unfulfilled, and several hundred million Indians have been left to starve while the countrys new urban rich, indifferent to if not contemptuous of their luckless fellow countrymen, coarsely flaunt their new-found wealth.

Patwant Singh describes how little the destitute and the deprived, the homeless the ill and malnourished, the oppressed and abused, count for in democratic India. The hospitals turn away the grievously hurt, refuse to admit mothers so they can deliver their babies. The slum-dwellers who painstakingly built their homes with torn gunny bags, discarded scraps of plywood pieces of tin, tarpaulin or whatever, can find their homes burnt to the ground overnight in mysterious fires or bulldozed within hours by municipal authorities. And then, lo and behold, apartment buildings start coming up

The author speaks angrily of the elites inhuman indifference to the agony and despair of fellow humans. He asks: Does it stem from the absence of intelligent thinking? Is it possible that the genius of Indias people cannot implement a nationwide food-for-work programme that can put the poor to work, feed them and rekindle hope in them?

Says Patwant Singh: Of course Indians have the capabilities and experience to deal with difficult problems. But to do this, he argues, India will have to reverse its Second Partition between the privileged classes, and the hundreds of millions of people put to the outer fringes by their affluent counterparts.

He believes that Indias future lies in the hands of those many men and women were moral clarity, deep convictions, and an abiding respect for decencies in public life.

It is high time we examined how to fill the moral deficit within our elite, and how to empower the wretched of the Indian earth, while breaking with our GDP-ism and sincerely addressing the issue of inequality. At stake is civilised social life, and our greatest national achievement since Independence, democracy.

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