Model Answer India has witnessed impressive economic growth in recent decades, but the benefits have been disproportionately distributed, leading to significant wealth and income inequality. As per the Oxfam 2023 report, 5% of Indians control more than 60% of the nation's wealth, while the bottom 50Read more
Model Answer
India has witnessed impressive economic growth in recent decades, but the benefits have been disproportionately distributed, leading to significant wealth and income inequality. As per the Oxfam 2023 report, 5% of Indians control more than 60% of the nation’s wealth, while the bottom 50% own just 3%. This stark disparity is driven by several key challenges:
- Dependence on Indirect Taxes: A significant portion of India’s tax revenue comes from indirect taxes, which are regressive. These taxes impact low-income households more, exacerbating wealth inequality. Since indirect taxes are levied on goods and services that everyone must buy, they disproportionately burden the poorow Female Labour Force Participation:** Gender inequality further deepens economic disparities. The female labour force participation rate in India dropped from 27% in 2010 to just 22% in 2020, according to the Global Gender Gap Report 2021. The lack of economic participation by women limits the overall income distribution and the country’s inclusive growth .
- Government Spending on Social Sectors:** India’s government has struggled to allocate sufficient funds for critical social sectors like health and education. Between 2014-2020, the budgetary allocation for healthcare remained between 1.2% and 1.4% of GDP. This underinvestment leads to rising out-of-pocket health expenses, pushing millions into poverty annually. Oxfam reports that around 63 million people fall into poverty every year due to healthcare costs .
- Lower Shafacturing in GDP: The Indian manufacturing sector, unlike China’s, has not seen a significant rise. Manufacturing jobs are often low-paying and offer limited social mobility. This stagnation in the manufacturing sector limits upward mobility for a large portion of the population .
- Large Informal Eco A significant portion of India’s workforce operates in the informal sector, which lacks social security, legal protection, and decent wages. This exacerbates income inequality as workers in this sector are more vulnerable to exploitation .
Addressing these challenges requprehensive approach: increasing government investment in health and education, improving tax policies, encouraging female workforce participation, and expanding formal sector employment.
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Model Answer Health and poverty are intricately linked in a cyclical manner, where one exacerbates the other. Poor health often leads to reduced productivity, preventing individuals from accessing better economic opportunities and income, thus perpetuating poverty. In India, where public spending onRead more
Model Answer
Health and poverty are intricately linked in a cyclical manner, where one exacerbates the other. Poor health often leads to reduced productivity, preventing individuals from accessing better economic opportunities and income, thus perpetuating poverty. In India, where public spending on healthcare remains low (2.1% of GDP), many families are forced to bear high out-of-pocket expenses. According to the WHO, more than 55 million people are pushed into poverty annually due to healthcare costs. Additionally, poverty restricts access to essential resources like clean water, sanitation, and nutritious food, leading to poor health outcomes. This further hinders economic mobility, especially among vulnerable populations.
How Inclusive Healthcare Promotes Inclusive Growth
In line with the United Nations’ Sustainable Development Goal (SDG) 3, India is increasing its healthcare expenditure, with schemes like Ayushman Bharat to ensure inclusive healthcare for all.
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