Oxfam India Report | Poverty | Income inequalities

Oxfam India Report | Poverty | Income inequalities 

Recently Oxfam India has relesed its report titled " Survival of the Richest : The India Story" , tells about the income inequalities and poverty exist in India. It reports that 5 per cent of Indians owns 60 per cent of the total resources, and the 50 per cent poor owns only 3 per cent of resources. The report also reveals that there is an increment of billionaires from 102 in 2022 to 166 in 2022. Between the year 2010-2021, one per cent holds forty per cent of the wealth. The top 100 billionaires owns 660 billion dollar and it can give funds in the budget of the Government of India for 18 months. During this Corona pandemic of two years, the richest 10 increased their wealth by 32 %. We can learn from an example of Gautam Adani who multiplied his business by 8 times or 800 % profits in the last two years. 

Contributions of Government policies. 

In the 2019 budget session, the government had announced to reduce corporate tax to 22 % from 30 %. And the newly established corporate companies were offered to give only 15 % corporate tax. The new companies were given special attention. Due to this acts, the  government faced huge loss of 16 % in the tax collection, which is about 1.84 lakh crore.

To maintain the loss incurred in tax collection, the GOI increased the taxes in GST, and even increased the excise tax on oil and diesel. 

In this way, we can see at one hand the government had given concessions to some rich peoples and on other hand it increased  taxes in GST, an indirect tax on common people.

Due to this policy, 50 per cent poor had to paid six per cent extra taxes than rich people. Poor paid two third of the total GST taxes while rich people paid only 3-4 per cent. 

Inflation policy of the Government.

If we talk about the inflation of the September 2022, the Urban inflation was 7.27 % while the Rural inflation was 7.56. From this data it is clear that the inflation was higher in rural areas. Urban people have high income salary but were paying less money and in rural areas where the income is low, people had to spend more money. 

RBI increased Repo Rate to curb inflation. 

To curb on inflation , The Reserve Bank of India had brought changes in the monetary policy, it increased the repo rate. This results in high rate of EMI, and collected money from the people forcefully. And the government announced 11 lakhs crore as NPA ( Non performing Assets). 

Due to these policies , from 2021-22, corporates earned profits of 70 % , and 84 % common households saw reduction in their income. 

Impacts of this income inequalities.

At one side vulnerability, hunger, unemployment, health problems rose, while profits of billionaires increased. 

Right now we have 22 per cent people comes under below poverty line. These people have no basic essentials to run their livelihood. They don't have access to education, proper health, cleanness and sanitation and drinkable water. It will affects their calorie consumption and per capita income, get their income decreased, decrease living standards. As per data there was 190 millions poor in 2018 and the date increased to 350 millions in 2022.

social implications 

Due to this income disparities, there is a fear of social conflicts between haves and haves not. This may lead to rise in violence and crime. Less productivity in works due to poor health or mal nourishment. It will also affect our democracy. 

Way forward 

The government must impose high taxes on billionaires. The reports tells that if only 2.5 per cent taxes imposes on only 100 billionaires or 5 per cent tax on only 10 billionaires, it will generate 1.4 lakh crore rupees. And this rupees can be spent on children, poor people, vulnerable people.

The government can impose windfall taxes, this taxes are functioning in many Scandinavian countries. It can impose inheritance taxes. 

The report also suggests that the government must try to reduce taxes on all essentials items and increase taxes on luxurious items. 

The report says that the government must spend money on health sector  and education sector up to 2.5 per cent and 6 per cent respectively of the total GDP of the country by the year 2025.