"Income inequality" is a word that describes how income is allocated unequally among people. The lower the equal distribution, the higher the income inequality. Income inequality is additionally amid wealth inequality, which is the uneven distribution of wealth. People are frequently divided into many tiers to represent various types of economic disparity, such as income inequality based on race or gender. This aids in comprehending the inequity in economic distribution at all levels.
India is the world's fastest-growing economy. However, it also has the second-most insecure economic distribution behind Russia. Inequality has been rising since the economy began to grow at a rapid pace in the 1990s. As new opportunities developed in the early stages of growth, the rich took better advantage of them. The compensation for the large population of unskilled laborers was kept low. According to an OXFAM International poll, the richest 1% of the population received 73 percent of the money generated in 2017, while the poor half of the population saw only a 1% increase in wealth. It also claims that a minimum shareholding in rural India would take 941 years to earn what a top-paid CEO at a major Indian corporation gets in a year.
Economic growth creates deep divisions in communities. For example, India has been the most popular destination for relevant medical tourism. The Indian government, on the other hand, spends the least on public healthcare in the world. Despite this, they have built the most major commercial health sector, which provides quality health services to those who can afford them.
What is the rationale for the remarkably sharp increase in inequality over the last 20 years? Various experts state that the increased perforation of technology and industrialization is the primary reason. Later they add that technology is skill-based. So, people who are technology literate experience increased productivity and wages in comparison to less-professed peers. The rise in productivity ends up in a rapid increase in technology which consecutively creates a better demand for skilled workers. The self-boosting character leads to increased wealth and inequality. Furthermore, current technological advancement has increased the frequency with which ordinarily skilled positions are being replaced. Thus, it has widened the wage gap even further. The other point to consider is that because technology is capital-based, a large portion of the profit generated by higher productivity is transferred straight to capital rather than workers. Since innovation reduces the amount of work required in the capital generation process, the disparity widens because of the unequal distribution.
When comparing the above said regarding India, there are certain factors to contemplate. First, there is no excess demand for high-skilled laborers. The tech-literate graduates who are in search of job opportunities are increasing. Moreover, despite this, inequality is rising. Other factors have a greater impact on inequality than technology. Technology has aided in raising remuneration for low and middle-skilled workers in service industries. The service industry accounts for about half of India's GDP, and a major portion of its workforce is low or middle-skilled. The rise of tech-based service companies has employed unskilled and middle-skilled people.
Then what keeps income inequality going in India? Most of the Indian people are still moiling in sectors that are afflicted with low productivity. Agriculture, in this case, provides 50 percent of job opportunities and at the same time contributes only 17 percent to India’s GDP. We are not able to feed the population that relies on agriculture since economic growth is mainly focused on service sectors. There is also the issue of gender equivalency. Women in India have not participated fully in the labor sector so far. To reduce inequality, low-productivity workers should be encouraged to maneuver to highly productive sectors.
Can technology help in overcoming inequality? Technology should not be sacrificed or viewed as an enemy. Instead, it should be seen as a tool for addressing inequity. Larger markets are developed as a result of increased technological use. As a result, more low- and middle-wage workers will be able to find jobs. For example, production can be boosted when agriculture, the largest employer, collaborates with technology. This makes it simpler to work in higher-productivity industries since it shows that a large proportion of young people who work in domestic service choose to work in the service sector over-farming. Technology must encourage digital literacy and internet perforation, mostly in native languages, to enable more people to access internet-driven economic opportunities. Furthermore, reskilling initiatives should be stepped up, and education should be more closely connected with industry objectives.
India has the highest population, and most of the population is either rich or poor. So, this does not mean that there is much inequality in comparison to other countries. Even when the differences in population and GDP between countries are taken into account, India has more millionaires than one might think. Looking at wealth distribution, on the other hand, gives an insight into the problem of inequality. The disparity is unlikely to diminish unless we can build an atmosphere that allows the country's inhabitants to work in productive areas. India's future must be more equitable, allowing us to consider an infinite number of interconnected and basic variables. Thankfully there are lessons we can learn and build upon doing so we can inch closer and closer to making our country a more equitable place.
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