I see lots of comments about income inequality in India. I find them very amusing.
Refer http://en.wikipedia.org/wiki/List_of_countries_by_income_equ....
You would see that India's income inequality is less than Switzerland, France and the Netherlands. The pressing problem in India right now is not income inequality. Its the lack of income, really. At this stage of development all India should worry about is earning wealth. Trying to redistribute that is a 'premature optimization'. :)
This is an oversimplified perspective, though it does have some underlying truth. The issue of poverty reduction is a complex one. I reccomend anyone truly interested to read this World Bank comparison report from a couple years ago(pdf):
“China clearly scores well on the pro-poor growth side of the card, but neither Brazil nor India do; in Brazil’s case for lack of growth and in India’s case for lack of poverty-reducing growth. Brazil scores well on the social policies side, but China and India do not; in China’s case progress has been slow in implementing new social policies more relevant to the new market economy (despite historical advantages in this area, inherited from the past regime) and in India’s case the bigger problems are the extent of capture of the many existing policies by non-poor groups and the weak capabilities of the state for delivering better basic public services.”
Not true. If you look at the GINI index (which is probably the most accurate measure for high inequality) India is quite higher than all those countries. And almost every country higher than India has significant economic problems. The only exception is Hong Kong and that is because its income inequality is obviously caused by capital flight from mainland China.
The other indexes do not capture the true nature if income inequality in these modern times. Comparing the top 10% of income earners with the bottom 10% washes things out because the truly rich are a very small group. They are a mere fraction of the top 1%.
Well comparing GINI across similar sized countries: India (36.8), Russia (39.9), US (40.8), China (46.9), Brazil (49.3), India is the lowest of the group.
While its true that most european countries have slightly lower GINI, they also have a higher 10% ratio (highest to lowest) than India.
So it's pretty hard to argue from the actual statistics that inequality is the outstanding problem of India as it is often made out to be.
But it's perhaps true that the contrast is more visible in India than elsewhere - with slums next to high rises.
I think the reason for this is that growth is relatively narrowly focussed around a few metros, which then attracts a big influx of job seeking rural population. The other big countries never had such a big rural population to begin with.
It is actually in the interest of the government to redistribute wealth, so that the next revolution never comes. :)
Despite what embittered historians say, the rich and powerful learnt plenty of lessons from the French Revolution. The only reason why some people remain obstinate about it is that they can't really be bothered to see beyond their lifetimes.
>It is actually in the interest of the government to redistribute wealth, so that the next revolution never comes.
I'm not convinced revolutions have much to do with income inequality, but rather the absolute level of poverty among the poor, the opportunities they have to improve their lot, and the input the average person has into the political process.
