Troubling trends: On widening inequality

  • IASbaba
  • January 29, 2021
  • 0
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  • GS-3: Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment. 
  • GS-3:  Inclusive growth and issues arising from it.

Troubling trends: On widening inequality

Context: The world economy is slowly recovering from the devastation caused by the COVID-19 pandemic, but that is only partial solace.


  • Uneven Recovery: The recovery is uneven among countries, and within countries. For example: The U.S. and China are expected to grow by 5% and almost 11%, respectively but Turkey’s economy is projected to grow by 0.4%.
  • Rising Inequality: In spite of differential economic recovery across the world, the emerging universal truth is that economic inequality is rising sharply in all countries.
  • Rich have been able to recover faster: A new report by Oxfam has revealed that the 1,000 richest people worldwide recovered their losses from the pandemic within nine months as opposed to the world’s poorest who might take a decade to limp back to their pre-pandemic standing.
  • Inequality in India: Inequality in India has risen to levels last seen when it was colonised. The additional wealth acquired by India’s 100 billionaires since March when the lockdown was imposed is enough to give every one of the 138 million poorest ₹94,045, according to the report.
  • Impact on Unskilled worker:  An unskilled worker in India would take three years to earn what the country’s richest person earned in one second last year, the report calculates. 
  • Disproportionate impact: The worsening inequality in income and opportunities impacts some sections disproportionately due to discrimination based on gender, caste and other factors. The poorer people were worst affected by the disease itself.
  • Normalisation of Inequality: The focus on growth had led politicians and policy makers to accept rising inequality as inevitable for decades. Inequality came to be seen as a benign outcome of economic growth that led to reduction of absolute poverty. 
  • Ideological issue with inequality: Concerns about inequality could also be easily dismissed as being informed by socialism. There is an increasing push towards adoption of liberalism & capitalism across the world. Any opposition to it was viewed with scepticism in the mainstream of development debates
  • Labour-Capital relation widening inequality: There is now universal agreement among economists that the distribution of new wealth between capital and labour has become so one-sided that workers are constantly being pushed to penury while the rich are getting richer. 
  • Environmental Impact: The environmental costs of a development model that hinges on higher and higher growth are also obvious. The burden of degradation of environment is felt the most the poorer sections of society.


  • The theme of the World Economic Forum at Davos this week is ‘the Great Reset’ which it says is a “commitment to jointly and urgently build the foundations of our economic and social system for a more fair, sustainable and resilient future.
  • Lip service is not enough to tackle inequality; one has to take concrete measures to stem the growing inequality in society.

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