More than a hundred billionaires recommended a greater tax on the wealthy at the just finished World Economic Forum gathering in Davos. This idea from the world's wealthiest people has sparked a fresh round of discussion.
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| [Mumbai, India] |
The Corona epidemic has exacerbated the world's already terrible economic disparities, notably in India. According to a recently released international assessment, the globe saw an unprecedented surge in the wealth of billionaires during the Corona outbreak. During this time, the wealth of the world's top ten richest persons more than doubled. Despite these claims, the gap between the affluent and the poor is expanding in the globe. How quickly this process of becoming wealthy is occurring may be better understood by the fact that in the last year, the number of billionaires in the world has climbed from 102 to 142 in India. In the last year, 40 of these people have become billionaires (in 2021).
The growth of 40 billionaires in India in the last year is remarkable given that the income of 84 percent of the country's families has reduced owing to the pandemic. Between March 2020 and November 30, 2021, billionaires' income surged by roughly Rs 30 lakh crore, rising from Rs 23.14 lakh crore to Rs 53.16 lakh crore, while more than 46 million additional Indians fell below the poverty line. The rate at which India's economic disparity is expanding is clearly worrying. On the one hand, the poor are unable to organize food and even basic essentials for themselves, while the riches of some is able to do so. Excessive riches and debilitating poverty have long coexisted. However, the epidemic has expanded the gap between these two extremes.
There is little question that billionaires pay less tax in most nations based on their wealth, thus there has been a rising desire in recent years to collect more revenue from wealthy individuals all over the world. In Argentina, a bill was introduced last year that imposed a special tax on the rich. Following this, the need for taking measures in this direction increased in numerous nations, including the United Kingdom. But the question is whether raising taxes on the wealthy will assist to close the wealth disparity. Is imposing high taxes on the wealthy the answer? Yes, the answer is yes. As a result, the Central Government should take the initiative to levy more taxes on the wealthy by altering tax policy.
If the Union Finance Minister is going to deliver the budget on February 1, the Finance Minister should consider taking such a step towards economic fairness by imposing an extra tax on the wealthy. Despite the rhetoric of wholesale price parity in public forums in India, no single effective solution to alleviate income and wage disparity has been identified. The most powerful and tried-and-true cure for the government to reduce inequality is to raise tax collection in order to improve equality of opportunity for the weaker sectors.
It is worth noting that, in order to address the widening disparity between the affluent and the poor, 102 billionaires at the World Economic Forum gathering proposed a greater tax on the wealthiest in a resolution. According to a similar research, putting a wealth tax on the world's wealthiest people could raise almost 2.5 trillion dollars each year. This is enough to pay the expense of vaccinating everyone on the planet and abolish poverty for 2.3 billion people.
Today, the gap is not just in the distribution of wealth, but also in employee pay. A CEO of a big IT business in India gets paid 416 times more than the typical employee. Keep in mind that this is not a comparison between the affluent and the poor, such as huge industrialists and daily wage laborers, where there is a lot of space for data manipulation. However, the compensation discrepancies between the Chief Secretary of the Government and the third class employee of the Government, the top administrative official in charge of implementing the government's policies in the government sector, are not as great as they are in the private sector. The differential in pay between the highest-ranking government official and a third-class employee is almost 10 times.
Economic experts throughout the world are increasingly agreeing that economic growth will not be adequate to eradicate poverty if it is not inclusive and does not incorporate the three basic pillars of sustainable development — economic, social, and environmental. With these problems in mind, the tenth target of the United Nations Sustainable Development Goals (SDGs) has been retained: to combat rising inequality. The good news is that, as part of a comprehensive plan, the Government of India is focusing primarily on the Jan Dhan-Aadhaar-Mobile initiative, which aims to promote inclusion, financial empowerment, and social security.
The greatest irony of a welfare state is income disparity. When it hits critical levels, popular support for liberal economic changes begins to dwindle. It is worth mentioning that while neoliberal policies in India have boosted economic growth, they have not alleviated poverty among the poor at the same rate that the wealth of the affluent has risen. As a result, the gap between rich and poor continues to increase year after year. The present Indian economic model predicts that the number and income of billionaires and millionaires will skyrocket in the future years.
As a result, our policymakers and planners must concentrate on how to attain the aim of equitable development. So that the disadvantaged, backward, and exploited might be integrated into the mainstream of growth.
At the moment, the greatest method to address economic disparity is to integrate isolated communities with the mainstream of development by offering good education and decent jobs to the most disadvantaged sectors. The government will have to spend more money on social programs as a result of this. More money will need to be spent on health and education. Our country now spends relatively little on these products. India has the ability to provide citizens with a rightful life while also eradicating societal inequality.
The fact is that without fast economic development, no country has been able to win the battle against huge poverty. As a result, the framework of economic reforms must be chosen in such a manner that income disparity can be minimized and a new economic environment centered on employment, the welfare of the common man, and the poor can be formed in the country.
To enhance the structure of the country's economy and place it among the top three economies in the world, emphasis should be prioritized on eliminating inequality in the country. There is a need to establish an atmosphere in which all citizens of the country can have access to improved health and education, decent employment, justice, and innovative and superior technology.
The issue of salary disparities between men and women. The COVID epidemic has increased gender inequality, according to the World Economic Forum's current Gender Gap Report. According to this estimate, equality between men and women will take around 136 years. At the same time, it may take more than 250 years to eliminate economic disparity. The huge wage disparity between men and women is a major source of economic inequality. Various studies show that women are paid up to 23% less than men around the world. Surprisingly, this condition has expanded not only among unskilled female employees, but even from Bollywood to the business world and the playground.
According to the International Labor Organization's (ILO) World Wage Report (2016-17), the earnings of men and women in India differ by more than 30%. According to the Oxfam India research, women were paid 34% less than males for the same job in 2011-12, despite having the same qualifications. It has also been discovered that structural variables such as caste, class, religion, age, and gender discrimination have an influence on gender disparity. Furthermore, women account for 60% of the lowest-paid jobs while accounting for only 15% of the highest-paid workers.
Women are frequently not considered farmers and do not own property, as a result of which they are unable to profit from farmer-specific programs. This has an impact not just on their economic situation, but also on their output. If half of a country's population is non-remunerative, less productive, and restricted to non-economic pursuits, no country can prosper or reach its full potential.
In a society where women are openly advocating for equal chances for men in school and politics, ignoring the fact that half of the population does not engage equally in the economy would be a mistake. We are losing out on a lot of opportunities for innovation, entrepreneurship, and productivity growth. Moving forward with the objective of obtaining a standard labor force participation rate, policymakers should consider whether women are gaining access to better work or self-employment, as well as taking advantage of new labor market possibilities that emerge as the nation develops. Is it possible for them to lift?
The necessity of the hour is to build an enabling policy environment that encourages women's engagement and is actively cognizant of the gender hurdles that women encounter. Effective measures to eliminate gender disparity must be established in this order.
The author Kailash Bishnoi is a research fellow at Delhi University