According to a report of Oxfam international , India’s richest now hold 58% of country’s wealth. 57 billionaires in the country have the same wealth as that of the bottom 70% population, Wealth inequality is a serious issue. The reasons for wealth inequality are:
- Growing incidence of Tax avoidance and Tax evasion
- Existence of black economy. Most of the real estate business take place through black money only.
- Major chunk of the population working in low pay sectors , unremunerative agriculture.
- Crony capitalism is also one of the reason . Policies are tailor made to serve the needs of few corporate houses only.
Widening inequality has serious repercussions:
- Lower tax/gdp ratio. Less money for social sector expenditure. Low rate of social capital formation.
- Continuing socio- economic backwardness and demand from other section to be included in backward category status.
- Exploitation of the poor and the vulnerable.
- Increasing corruption, crime and insecurity in the society.
- Free market envt is not available for small businesses. Growth of MSME sector get hampered.
- Demographic dividend may turn into liability.
- Farmer suicides are increasing.