DMPQ: Wealth inequality is a serious concern for the Government around the world. What are the reasons for wealth inequality in India? List down the consequence of wealth inequality.

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:

  1. Lower tax/gdp ratio. Less money for social sector expenditure. Low rate of social capital formation.
  2. Continuing socio- economic backwardness and demand from other section to be included in backward category status.
  3. Exploitation of the poor and the vulnerable.
  4. Increasing 81.2z"/> Subscribe on YouTube
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.
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