New Delhi: Economist Arvind Panagariya, recently appointed chairman of the 16th Finance Commission and closely associated with the Modi regime, has stepped up to defend stark income inequalities in India, suggesting that we “Don’t lose sleep over Inequality” in The Times of India on April 2, 2024.
A recent report by the World Inequality Lab rang alarm bells after its data-driven conclusion that income and wealth inequality in India today was worse than under colonial rule. Using “billionaire raj” for the present times, research has found that inequality declined post-independence till the 1980s, rose afterwards and is “skyrocketing now”.
The report concluded that Between 2014-15 and 2022-23, the rise of top-end inequality has been particularly pronounced in terms of wealth concentration. By 2022-23, top 1% income and wealth shares (22.6% and 40.1%) are at their highest historical levels and India’s top 1% income share is among the very highest in the world, higher than even South Africa, Brazil and US. It only capped what was already being reported in surveys and estimates for some time now.
Earlier, Oxfam had found a yawning gap growing between the top and the large majority, the bottom 99%. It found that “73% of the wealth generated in 2017 went to the richest 1%,” while 670 million Indians who comprise the poorest half of the population saw only a 1% increase in their wealth. The top 10% of the Indian population, it said, holds 77% of the total national wealth.
Now, Panagariya has come out and said it be treated like a necessary side-effect of ‘wealth generation’. He wrote, “Poverty reduction requires wealth creation which is rarely possibly without an increase in inequality between those who create wealth and the rest. While some love to sound an alarm over such inequality, people at large rarely resent wealth creators.”
Panagariya reflects an archaic thinking, which after the notorious ‘trickle down theory’ has been widely discredited. Also, for someone, as Chairman of the Finance Commission, mandated to try and even out inequities in the system, think through allocation of resources between states, not appearing to be committed even to the principle of equality is of grave concern.
He cites the “common man” as not being concerned, having “little knowledge or concern with what the national Gini is.” The Gini coefficient is a measure of income inequalities. Panagariya argues that inequality is a necessary outcome on the road to prosperity. In November, India pledged to feed over 80 crore of its population survival rations, as mandated by the National Food Security Act, 2013, extending the scheme of extra rations too for five more years.
Also read: India’s Inequality at Historic High; Wealth Concentration Shot Up Sharpest Between 2014-5 and 2022-3
The defence of crony billionaires, whose speedy rise is apiece with those falling off survival levels, he writes of “a villager in India” who would hardly be concerned “if Mukesh Ambani added another five billion to his wealth in a given year, but would be worried if “her neighbour’s wealth rises sharply while she struggles.”
Terming those concerned about sharply rising inequality as “inequality alarmists” and being out of touch as “this form of inequality elicits little opprobrium from the masses”, Panagariya’s case rests on neighbourhood inequality pinching those left behind, not those living away.
Panagariya may wish to look at photographic imagery locating Mukesh Ambani’s residence in the middle of Mumbai, providing a glimpse of Ambani’s neighbours.
10. Palazzo Antilla, Mumbai, India
AdvertisementPalazzo Antilla, Mumbai, India with an estimated net worth of $2 billion is the residence of Mukesh Ambani and his family who started living there in 2012. Antilia’s architectural design is 27 stories and is inspired by the lotus and the sun pic.twitter.com/RchRrJTASn
— Grace (@0xSisa) March 2, 2023
There has been extensive pictographic work citing how bad inequality looks and feels, precisely mapping neighbourhoods reflecting it. Johnny Miller has been particulary noted for its ability to sharply draw focus to it.
A drone image which shows the Bandra Kurla Complex standing in sharp contrast to the dense conglomeration of shanties. Photo: Instagram/johnny_miller_photography
Some time ago, the chief economic advisor, V Ananth Nageswaran had shrugged his shoulders about rising unemployment among the youth and said there was little that the Modi government could do about it.
