State the measures adopted to reduce the inequality of income in India.
Since the Constitution of India recognizes social, economic and political justice, the Government of independent India adopted the following measures at various times to reduce the inequality of income of India:
(a) Land Reforms:
The Land Reforms Act abolished the Zamindari system and the surplus land was distributed among the landless by implementing the Land Ceiling Act. Besides, maximum wealth limits have been fixed in urban areas as well.
(b) Tax Structure Reforms:
The Indian tax structure is progressive. That is, by levying high taxes on the income of high earners, the distribution of income is tried to favour the poor. But these efforts have not been very fruitful due to rampant tax evasion trends.
(c) Control of Monopoly:
The Monopolies and Restrictive Trade Practice Act (MRTP), Foreign Exchange Regulation Act (FERA), etc. were enacted in 1972 to control the assets of a handful of business firms (like- Tata, Birla, Bajaj etc.) in India. However, MRTP Act was relaxed when the economic reform process started in 1991 and the FERA Act was amended to become Foreign Exchange Management Act (FEMA).
(d) Employment Policy:
National Rural Employment Programme (NREP), Food for work scheme, Integrated Rural Development Programme (IRDP), Jawahar Rojgar Yojana (JRY), Pradhan Mantri Swarajgar Yojna (PMSY), Self-employment Scheme and Seat Reservation Policy for underdevelopment and poor families have been adopted to reduce income inequality.
(e) Wages Act:
Minimum Wages Act for workers in the unorganised sector and Bonus Act recognising workers’ equal rights to company dividends have been enacted.
(f) Payment of Allowance:
Pension Scheme for old age, day labourers and destitute widows and unemployment allowance for the unemployed were introduced.
(g) Expansion of Public Sector:
To reduce inequality in income distribution, nationalization of banks, nationalization of coal industry, and other state-owned enterprises have been placed under government control. Apart from this, abolition of royalties, management of joint venture, recovery of black money and various anti-tax evasion measures have been adopted.
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