n a discussion with Subhoranjan Dasgupta, Professor Patnaik, a distinguished economist from JNU, explores the widening wealth disparity and how a focus on GDP can be used to legitimise transfers to crony capitalists. https://thewire.in/economy/hunger-undernutrition-stalking-india-placed-worse-than-least-developed-nations-prabhat-patnaik
Which adjective would you use to pinpoint the nature and condition of the Indian economy – ‘baffling,’ ‘inexplicable,’ or purely ‘criminal’? While one side of the coin says that India is projected to become a $5 trillion economy and will soon emerge as the third-largest economy in the world, the other side emphasises that around 11% of the population is poor in India, according to World Bank data, and 189.2 million people still go to bed hungry every night.
19/07/2024
The report also pointed out that billionaires around the world have been paying a tax rate equivalent to less than 0.5% of their wealth.
The G20 Finance Ministers meeting is expected to deliberate on a global deal to increase taxes on the super-rich, with Brazilian Finance Minister Fernando Haddad identifying the global tax on billionaires as a key deliverable at the summit. https://thewire.in/world/top-1-grow-wealth-by-42-trillion-in-past-decade-36-times-more-than-bottom-50-oxfam
5/07/2024
Despite the headline-grabbing figures of expenditure in this year’s Union budget, a closer look reveals a troubling reality for the nation’s poorest. https://thewire.in/rights/budget-2024-25-social-sector-spending-shrinks
Major schemes and essential programmes that many marginalised communities rely on have seen a reduction in funding. This subtle yet significant shift threatens to undermine the support systems for those who need them most, raising concerns about the true impact of the proposed expenditure.
In recent years, funding for key social sector heads has steadily dwindled as a percentage of the government’s total expenditure. Many allocations have either declined or remained stagnant, with any increases being merely marginal. The heads experiencing the most significant cuts compared to 2015-16 include food subsidy, social welfare, education, health, and fertilizer subsidy.
For instance, the allocation for food subsidy has decreased from 7.79% in 2015-16 to just 4.26% in the 2024-25 Budget Estimates. Social welfare funding has dropped from 1.7% to 1.1%, Education, from 3.75% to 2.61%, health from 1.91% to 1.85%, and fertilizer subsidy from 4.04% to 3.4%. Meanwhile, pension allocations have remained stagnant at 5.05%.
by Pranay Raj
25/07/2024
Even when prices are subsidised, the marginalised still cannot afford the minimum required for adequate nutrition and quality education. As a result, many of these basic amenities have been provided for free, turning them into ‘labhartis’. This approach reduces poverty and offers long-term benefits for society.
https://thewire.in/rights/who-are-indias-labharthis-the-visible-and-the-veiled
Alternatively, the system must enable the marginalised to earn a ‘living wage’ as promised under the Constitution. Many workers are either underemployed, working in disguised unemployment, or have stopped looking for work altogether. As a result, workers are forced to accept low wages. Due to the shortage of suitable employment and low wages, family incomes remain inadequate for the marginalised.
Real national income has increased by a factor of 29.76 between 1950-51 and 2022-23. Data from Credit Suisse suggests that most of this increase has accrued to the well-off and big business constituting the top 1% of the population. So, they owned 51.5% of the wealth in 2018 while the bottom 60% had only 4.7% of it. In income terms, the top 1% earned 22% while the bottom 50% earned 13%. This is the result of policies that have yielded little trickle-down effect.
The well-off have gained even more through the black economy, which is not taken into account in the official data. It was estimated at 62% of the GDP in 2012-13 and has been growing and is concentrated in the hands of the top 3% of the income earners. The ruling elite has perpetuated it through a triad of corrupt businessmen, politicians, and the executive, who share the illegal gains, thereby further marginalising the marginalised.
All this makes India one of the most unequal societies in the world
The blame for the adoption of trickle-down policies falls squarely on the ruling elite, consisting of business interests, the urban elite, and broadly the well-off. They have been the policymakers, not the marginalised. They have been the real ‘labhartis’ of the system for the last 75 years.
They have shaped government policies and the annual budgets of the Centre and the states, enabling them to corner the nation’s resources. They present their interests as the nation’s interests, ignoring those of the marginalised. Unemployment, as mentioned above, helps keep wages low, enabling businesses to generate higher profits. The elite can afford their luxurious lifestyles because of the low wages paid to servants and chauffeurs.
This process of cornering resources was accentuated in 1991 and further in 2014 in the name of promoting growth. For instance, during the pandemic in May 2020, the ‘Atmanirbhar’ package of Rs 20 lakh crore allocated about Rs 3 lakh crore to the marginalised, while the rest went to the well-off in various forms. The marginalised suffered the most, but it was the well-off who received the majority of the support. No wonder that while the economy declined, the stock market wealth of the well-off skyrocketed.
So, behind the veil of policies for ‘national good’, the real ‘labharthi’ has been big business and the elite. How can the leadership not see this when repeatedly pointing a finger at the marginalised? Is that the motivation for an authoritarian rule?
by Arun Kumar
29/05/2024
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