Discuss the causes of income inequality in India.
The causes for income inequality in India are as follows :
(1) Mahajani exploitation :
The moneylenders have fueled the increase in economic inequality by consuming the property of the poor and middle-class peasantry in the country by charging high-interest rates and manipulating accounts.
(2) Social customs :
According to Professor Amartya Sen and Jean Dreze, caste system, child marriage system, etc. are responsible for creating inequality in various social practices.
(3) Opportunity inequality :
People of all classes in the society do not get equal opportunities to receive government facilities due to lack of news or information. This leads to inequality.
(4) Inheritance law :
The passage of our property inheritance law has enabled us to increase the inequality of ancestral property and inheritance rights.
(5) Acute unemployment :
According to the Mahalanbish Committee, unemployment is on the rise due to the poor education system and unemployment is largely responsible for increasing income inequality.
(6) The intensity of inflation :
The outbreak of inflation in the sixties is largely responsible for increasing inequality. Because rich people have many sources of income and their purchasing power is high. On the other hand, the poor have no such source of income, so they have no purchasing power.
(7) Tax evasion :
The rate of income tax and other duties in India is very high. As a result, there is a tendency for tax evasion. Wealthy individuals and businesses have created a mountain of black money through tax evasion and continue to help increase income inequality.
(8) Responsive tax structure :
The declining indirect tax system on the pretext of increasing the revenue of our country is one of the reasons for income inequality.
(9) Income and Property distribution :
The government’s policy of liberalization and globalization of income and property distribution is significant. In our country, tax policy, liability policy, industrial policy, industrial license policy, loan policy, etc., the policy of country is decided to keep in view the interests of the rich class. The Government wants to keep their seat secured by keeping them happy. This leads to inequality in income and property distribution.
(10) Liberalization and globalization policy :
Efforts have been made since the 1990s to shift the Indian economy from a mixed economy to a capitalist one. Emphasis is being placed on development in the private sector by shrinking the public sector as directed by I.M.F., World Bank and W.T.O. As a result, it is needless to say, income inequality is increasing instead of decreasing by giving priority to foreign capital and technology, implementing the policy of disinvestment and nationalization.
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