In this episode of Editorial, Mr. Sujit Nair explores income inequality in India. According to a report by the National Council of Applied Economic Research and PRICE, income inequality in India has declined between 2021 and 2023. Using this report and other relevant data, Mr. Nair highlights the percentage gap in inequality across various income groups in the country.
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[00:00:00] Namaskar! Welcome to another episode of Editorial. Income Inequality has come a wee bit down between 2021 to 2023. It has come down which is a good sign.
[00:00:19] Now let us talk about income inequality and how can it damage our society and also why even the current income inequality index which is called as Gini coefficient is not good enough.
[00:00:39] Let's talk about it. Let's get right into the show.
[00:00:42] Now before I start my editorial, let me put all the facts on the table.
[00:00:52] Two organizations, one organization called PRIZE. PRIZE is the People's Research on India's Consumer Economy.
[00:01:04] PRIZE and another organization called the National Council of Applied Economic Research.
[00:01:10] Two organizations, their working papers have indicated that the Gini coefficient.
[00:01:18] Now what is a Gini coefficient?
[00:01:20] Gini coefficient is a statistical measure of measuring the inequality, income inequality in the population.
[00:01:29] So that is what a Gini coefficient is. So they indicated that the Gini coefficient has come down from 2021 to 2023.
[00:01:41] 2021, the Gini coefficient was 0.528 and currently the Gini coefficient in 2023, it has come down to 0.410.
[00:01:55] So this is what it is. So from 0.528, it has come down to 0.410, which means that the inequality has come down.
[00:02:06] Small percentage, but it has come down.
[00:02:09] Now it says that the reason for this coming down is because of a lot of social welfare schemes like the Manarega.
[00:02:16] Like the Manarega and direct benefit schemes, direct benefit transfers and so on and so forth.
[00:02:23] So because direct benefit transfer happened because of Manarega, now the poorest, they have some money in hand,
[00:02:32] which in turn bridge that gap in a small way between the rich and the poor.
[00:02:41] That's the story.
[00:02:44] Now, is this good enough?
[00:02:47] Is this good enough?
[00:02:49] I'm going to try and answer those questions for you.
[00:02:52] You see, according to a report in Indian Express, which was basically a report from 20th March 2024.
[00:02:59] And this report, this table is of 2022-23.
[00:03:05] The top 1% of people in India has 40.1% wealth of India.
[00:03:14] Top 1% of India owns 40.1% wealth in India.
[00:03:18] And the top bottom 50% of India owns 6.4% wealth of India.
[00:03:28] Top 1% 40.1% and bottom 50% 6.4%.
[00:03:34] Now, this is the divide.
[00:03:37] This is the gap that we are trying to bridge.
[00:03:40] And for bridging these gaps, these small numbers, these small measures may not be good enough.
[00:03:49] Now, this is the problem.
[00:03:51] Let me also talk to you about the income inequality.
[00:03:53] I spoke to you about the wealth inequality.
[00:03:55] Let me also talk to you about the income inequality.
[00:03:58] Top 1% of India has an income share of 22.6%.
[00:04:05] And the bottom 50% of India has 15% share of income.
[00:04:14] Which means 1% of India takes around 22% of the total income that is generated in India.
[00:04:23] And the entire bottom percent take 15% of the income generated in India.
[00:04:29] Now, like I told you, this is the gap that we are trying to build.
[00:04:34] So, would a change from 0.528 that was in 21 to current 0.410, would this change make a difference?
[00:04:46] Would this change really suffice?
[00:04:48] Is this change, is this bridging good enough?
[00:04:52] Or we need far more?
[00:04:56] Now, like I told you, a lot of the subjects that I talked to you about may not be very trending.
[00:05:00] It may be boring.
[00:05:01] But, you know, I will tell you why it is important.
[00:05:04] You know, it is like that seesaw.
[00:05:06] When wealth and income is dominated by a small percentage of people in a country,
[00:05:14] then everything that the country has to offer, including justice, including administration,
[00:05:22] will be swayed, will be attracted to that particular group of 1%.
[00:05:27] Everything in life will be at their disposal.
[00:05:32] And the rest will have to strive for everything.
[00:05:35] What I am trying to tell you is, I will give you an example.
[00:05:39] You see, Supreme Court Judge Justice Deepak Gupta had said that law and legal systems are
[00:05:46] geared in favor of the rich and the powerful.
[00:05:48] In fact, Mr. Gupta's farewell speech, he said that the system usually went into a tizzy
[00:05:56] if a rich person was put behind bars.
[00:06:00] Applications for his bail and expediting his trial were filed repeatedly in superior courts.
[00:06:09] His case was heard at the cost of delaying the case of a poor litigant.
[00:06:14] The poor too had right to life and dignity.
[00:06:19] The judiciary needed to hear him and help them.
[00:06:24] I am not saying this.
[00:06:25] A judge is saying this.
[00:06:27] And this is what I constantly come in front of you and talk about.
[00:06:32] You see, inequality of income brings about inequality in everything in life.
[00:06:38] A normal person does not get the rights and privileges that a rich person gets.
[00:06:44] No matter whatever you say, no matter whatever whoever tells you,
[00:06:48] no matter whatever the law is, no matter whatever the administration stand is,
[00:06:53] but a rich person gets much more privileges than a poor person.
[00:06:57] So therefore, there are two worlds that we live in.
[00:07:01] The rich man's world and the poor man's world.
[00:07:05] Like the Honorable Justice said, law is different.
[00:07:10] Law treats a rich man differently than a poor man.
[00:07:15] You will see a lot of poor people languishing in jail.
[00:07:18] You must have heard so many stories.
[00:07:20] Have you heard about a rich man languishing in jail without a trial?
[00:07:24] Have you ever heard that?
[00:07:27] You see, when there is a need,
[00:07:30] the entire administration, including department like the police
[00:07:33] and administration are behind a rich man.
[00:07:37] Have you seen that kind of privilege offered to a poor man's family?
[00:07:44] When you go to a rich man's wedding,
[00:07:46] if you have been to,
[00:07:47] do you see a police guarding their traffic and guarding the people?
[00:07:52] Have you seen it?
[00:07:53] Have you seen a policeman stand in a poor man's wedding?
[00:07:58] A poor man is also a citizen of this country.
[00:08:00] A rich man is also a citizen of the country.
[00:08:02] But administration and other departments,
[00:08:06] they cater more to the rich people
[00:08:08] because they have to then catering to the poor.
[00:08:13] This is what brings about,
[00:08:15] this is what happens when you have inequality of income.
[00:08:20] The point that I am trying to make,
[00:08:22] the point is,
[00:08:23] somewhere down the line,
[00:08:27] having billionaires, fantastic.
[00:08:30] Having wealth creators, brilliant.
[00:08:32] I am for it.
[00:08:33] And we should all be for it.
[00:08:36] But what I am trying to say,
[00:08:38] and I,
[00:08:39] while we speak about a lot of things,
[00:08:42] about Adani, Ambani and all that,
[00:08:44] but we also say that an Adani is important for this country,
[00:08:47] an Ambani is important for this country.
[00:08:49] I am not against wealth creators.
[00:08:53] Never.
[00:08:54] I am never against wealth creators.
[00:08:57] I am always for an Ambani or for an Adani,
[00:09:01] but my only contention is,
[00:09:03] that we should have 100 Adanis and 100 Ambani,
[00:09:06] 1000 Adanis and 1000 Ambani in this country.
[00:09:09] So that the wealth is not just with 2 people
[00:09:13] or 4 people or 10 people.
[00:09:15] Thousands and thousands of people should have that wealth.
[00:09:18] What that does is a balance of power.
[00:09:22] What that does is at some level,
[00:09:26] some kind of equilibrium in our country.
[00:09:29] My point is,
[00:09:31] let's talk about having more and more and more wealth creators,
[00:09:36] more and more and more wealth creators
[00:09:39] will create more and more and more jobs,
[00:09:42] which means that that bottom 60%,
[00:09:44] no, that bottom 60%,
[00:09:46] that bottom 60% would be alleviated.
[00:09:48] When there are jobs,
[00:09:50] there is income.
[00:09:50] When there is income,
[00:09:52] immediately what you are doing
[00:09:54] is you are going to bridge that income inequality
[00:09:56] between the rich and the poor.
[00:09:59] When there are jobs,
[00:10:01] the poor will get income
[00:10:03] and they will have assets.
[00:10:05] They will buy wealth.
[00:10:06] They will have wealth.
[00:10:07] That wealth equality also will come down.
[00:10:10] This will not happen
[00:10:11] if you focus all your concentration
[00:10:14] on one or two or three business houses.
[00:10:18] This will not happen.
[00:10:19] This will only happen
[00:10:20] if you spread your net wide
[00:10:24] and allow more people
[00:10:26] to become super billionaires.
[00:10:30] It's a nice thing.
[00:10:33] That's the point I wanted to make
[00:10:35] through this editorial.
[00:10:36] That is why I wanted to take this topic up
[00:10:38] in front of you.
[00:10:41] Till I see you next time.
[00:10:42] That's tomorrow at 10.
[00:10:44] Namaskar.
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