Roadmap for Answer Writing

When addressing the question, “What are the effects of persistent economic inequality in India, and what challenges exist in tackling this issue?”, follow this structured approach:

1. Introduction

• Define economic inequality and its relevance in the Indian context.
• Briefly mention the current state of economic inequality in India.

2. Effects of Persistent Economic Inequality

• Economic Risks: Discuss how inequality affects economic growth and stability, including the impact on lower-income households’ ability to invest in health and education.
• Social Polarization: Explain how inequality exacerbates existing social divides related to caste, religion, and gender, hindering social mobility.
• Political Risks: Address the concentration of political power among the wealthy, leading to the marginalization of vulnerable groups and potential crony capitalism.
• Social Justice Issues: Highlight the health and educational disparities caused by inequality, such as reduced life expectancy and higher infant mortality rates.
• Policy Risks: Discuss how rising inequality can lead to backlash against economic reforms and globalization.

3. Challenges in Addressing Economic Inequality

• Low-Paid Jobs: Describe the prevalence of low-wage employment and its impact on upward mobility.
• Underinvestment in Health and Education: Explain how economic inequality limits public investment in essential services, affecting human capital development.
• Taxation Issues: Discuss the regressive nature of the tax system, particularly the burden of indirect taxes on the poor.
• Social Barriers: Address how caste and gender inequalities restrict mobility and perpetuate poverty.

4. Conclusion

• Summarize the key points and emphasize the need for comprehensive policies to address both the effects and challenges of economic inequality in India.

Relevant Facts

1. According to Oxfam India, just 5% of Indians own more than 60% of the country’s wealth, while the bottom 50% possess only 3%.
2. High levels of inequality can undermine economic growth by limiting lower-income households’ ability to invest in health and education, which is crucial for overall productivity .
3. Economic inequality exacerbates social polarization, affecting the pace of poverty reduction and social mobility in an already fractured society .
4. Increasing inequality can concentrate political power, marginalizing vulnerable populations and leading to crony capitalism .
5. Inequality contributes to health disparities, with issues such as reduced life expectancy and higher infant mortality rates being prevalent among poorer populations [.
6. The NITI Aayog has highlighted the proliferation of low-paid jobs in India, which inhibits upward mobility for many citizens .
7. Economic inequalities limit the majority’s ability to invest in health and education, with government spending in these sectors being minimal compared to developed countries .
8. The poorest half of the population bears nearly two-thirds of the Goods and Services Tax (GST) burden, illustrating the regressive nature of the tax system .