Rising economic inequality is a major threat to social stability. Discuss the factors that foster inequality and suggest measures to reduce inequality. (200 words)
Refer – Business Line
Enrich the answer from other sources, if the question demands.
IAS Parliament 7 years
KEY POINTS
· As Oxfam reported, the top one percent of the world increased their wealth by $762 billion while the bottom 50 per cent saw no growth, increasing the divide between social classes.
· This kind of economic inequality can result in unfair political institutions, unfair control by a few wealthy over others and unfair workers’ laws.
· We can reduce these inequalities by reducing poverty by putting the most vulnerable population in a growth trajectory.
Factors fosters poverty
· Lack of women participation – As IMF Chief Christine Lagarde recently said, if women’s participation in the workforce matched men’s, India could grow at 27 per cent per annum.
· McKinsey reported in 2016 that women contribute only 17 per cent of India’s GDP, and estimates that India could add $700 billion to its GDP in 2025 by closing this gap.
· Least importance given to Agriculture – As per the World Bank, agriculture can help reduce poverty for 80 per cent of the world’s poor who live in rural areas and work mainly in farming.
· It further states that 65 per cent of the poor working adults make a living through agriculture.
· Lack of minimum wages and unemployment
Solutions
Investing in women
· More family-friendly work policies, such as
a) Paid parental leave
b) Creating an environment where kids are allowed in the workplace
· Men should take equal responsibility in raising kids and managing household chores.
Investing in agriculture
· Providing farmers with a bundle of services like access to seeds, plant nutrients and production practices are critical.
· But today, climate smartness and climate resilience also need a special focus.
· We should focus on risk mitigation mechanisms like weather insurance and risk prevention mechanisms.
Reforming workplace laws
· Reforms in workers’ laws can reduce inequalities.
· Minimum wages and universal basic income (UBI) are two of the popular ways to reform workplace laws.
· Minimum wages should have inflation adjustment and a premium for inequality reduction.
· UBI envisions that everyone receives a monthly pay packet from the state that covers their basic needs.
