To start, let\’s bring out some data points to give a context to the discussion. As per the data released by the Johannesburg-based company New World Wealth, India is the second-most unequal country globally, with millionaires controlling 54% of its wealth. With a total individual wealth of $5,600 billion, it’s among the 10 richest countries in the world – and yet the average Indian is relatively poor.This problem is created because of-Social sector spending : we spend close to 4% of our GDP on education and health which is abysmally low by any standard. Quality education and health is a luxury that only rich and upper middle class can afford in this country. Other comparable countries, Brazil, Sa, China spend close to 8–10% on their GDP on education and health… A higher uneducated and unhealthy society would continue to remain engaded in the primary sector of employment and not join the formal/organized workforce. This limits the chances of people coming out of poverty and joining the middle class.Taxation : There are 2 type of taxes we pay, direct and indirect taxes, former being the progressive taxation and later being regressive. So if you would want to reduce income inequality, you would try to get more from direct taxes (income tax and corporation tax) so that the burden on indirect taxes are less. In india we get close to 1/3rd of taxes from direct taxes whereas this ratio is around 50% for many comparable countries. Raising tax rates is virtually impossible due to political reasons even though tax rates in India are low… maximum being 33% for top brackets, which is in range of 40% or more in most advanced countries. So government needs to increase the tax base by stopping tax evasion.Middle class Apathy: At the risk of sounding judgemental, dare I say that the great Indian middle class ( I include myself) is very self serving. It has an extraordinary sense of entitlement and almost non existent sense of citizenship. It has abandoned the responsibility of raising issues concerning the citizenry at large. Generally middle class has been the avant-garde of the movements for equal rights and opportunity, universalisation of all basic services, building public spaces etc. Still today we hear cases of people not allowed in temples, public place ???Although an optimist in general, I am afraid we may not see any significant improvement on wealth distribution in near future. It may even get worse unless urgent and bold steps are taken by the government.Thanks
Because India\’s physical topography is not same in all regions.