India’s top 1 per cent owning 73 per cent of its wealth shows we are unequal by design
The annual reminders of India’s and indeed the world’s extreme wealth and extreme poverty come in the form of the Oxfam International inequality reports, mostly released to coincide with the World Economic Forum at Davos, the yearly meet in praise of global capital in the lap of the icy Swiss Alps.
While some find immense irony in this arrangement, others live in the hope that the annual warnings of Oxfam’s inequality reports, that follow a distinct pattern of becoming starker and starker every year, are taken up seriously by the global “elite”, and act as a moral, socioeconomic springboard for the wealth generators and inheritors and hoarders of the world to revise and reverse their ways.
This year too Oxfam International, in collaboration with YouGov and RIWI, undertook surveys in India, United Kingdom, United States, Nigeria, Mexico, South Africa, Spain, Morocco, Netherlands and Denmark, to arrive at expected, but nevertheless unimaginably terrifying conclusions on the exploding income and wealth disparity between the world’s richest and the poorest. While the richest one per cent in India bagged 73 per cent of the wealth created in 2017, the poorer half of India, roughly 67 crore people, received only one per cent of the income generated.
Toxic inequality, an alarming trend
The trend becomes clearer if we look at the two preceding years: in 2015, it was at 53 per cent, the share of wealth owned by the richest one per cent in India. In 2016-17, it was estimated that the income and wealthy gap had substantially widened, that too in merely one year.
It stood at 58 per cent of the wealth of the country, owned by just one per cent of the population, the billionaires and the corporate behemoths, essentially, many of whom are currently in Davos, attending the WEF 2018 along with Prime Minister Narendra Modi. That in 2017 the previous share of 58 per cent has increased to now stand at 73 per cent, is something most Indians are wincing at, while those at WEF, given their track record, are secretly taking pride in.
Oxfam’s report, titled “Reward work, not wealth”, is a scathing indictment of this inequality by design, in which systems and the global capital, as well as toxic levels of crony capitalism practised under national economic systems such as in India at the moment, tilt the balance so dangerously in favour of the wealthy that the disparity dwarfs the levels that existed during the most exploitative feudal regimes of pre-20th century world.
Worldwide, the figure is worse, with 82 per cent of the planetary wealth owned by the richest one per cent of the globe, making this difference not only stinking and inhuman, but also something that’s integral to how the global systems have been allowed to operate, in which free flow of capital is permitted at the expense of free movement of people, in which accumulation of extreme wealth is actively promoted at the expense of mass deprivation, displacement, disenfranchisement, discrimination, exploitation, malnutrition, sickness, indeed starvation and death.
Inequality creates unsustainable risks
While the World Economic Forum under the leadership of Klaus Schwab intends to address these unparalleled disparities staring us in the face, indeed the “annual meeting” is for Schwab a session to brainstorm how to mitigate the manmade disasters so, collectively, the bitter reality is that WEF has become a platform for the super-rich to hobnob and preserve their clique.
While the Global Risk Report 2018, released just one week before WEF commenced, had underlined wealth and income inequality now breaching sustainability levels, with extreme wealth driving the engines of extreme poverty and vice-versa, this planetary neocolonial regime is excluding the marginalised at unprecedented rates, creating entire populations of the have-nots, indeed entire countries of the poor ruled by an ever-thinning crust of super-wealthy elite.
In fact, India is a model country that is now actively promoting inequality of wealth and opacity of government-corporate decisions, while imposing unconstitutional transparency for the citizens and an income gap that’s not only extremely exploitative of the poorest half of 67 crore Indians, but also poisonous for the national discourse, policy-making, and indeed the economic indicators such as GDP, GDP growth rate, among others.
This is especially true since the top one per cent that hoards 73 per cent of the wealth created, is also responsible for the astronomical amounts of NPAs (non-performing assets) weighing the banking sector down, particularly the public sector banks that have been repeatedly writing off and waiving bad loans of (wilful) corporate defaulters. In fact. PSU banks wrote off Rs 55,356 crore in the last six months, instead of demanding that the big borrowers return the money they take from the public sector banks, which are funded ny tax-payers'money and recapitalised through coercive measures such as fining account holders over minimum balance, or turning fixed deposits beyond Rs one lakh to bank shares via legal and financial jugglery that's the imminent "bail-in"clause.
Wealth explosion for few, versus mass joblessness
As the Oxfam report underlines, the past 12 months, the top one per cent of Indians increased their wealth share to Rs 20,913 billion, which is roughly equivalent to the entire Union budget of the central government in the fiscal year 2017-18. While the wages have stagnated and unemployment has reached the highest point in decades, the average billionaire in India has seen his/her income rise by 13 per cent annually, a trend visible since 2010.
India added 17 new billionaires in 2017 and has 101 of them now, with only four women in the lot dominated by filthy rich men. This is also a system that’s rigged against the poorer women, with most of them earning less than their male counterparts, while putting in exactly the same work. That the concentration of wealth has occurred at a time when the twin economic shocks - of demonetisation and Goods and Services Tax - sent ripples of disruption across the Indian manufacturing and agricultural sector, shutting shops and robbing many thousands of their daily wages for days at end, throwing millions deeper into the wage uncertainty cycle, thus impoverishing many, many while enriching a handful, is something that hasn’t been missed by observers in India and abroad.
‘Indians are worse off under Modi’
Not just the conclusions of the Oxfam report, but a recent Forbes report also arrives at the same inference after studying India’s economic and sociopolitical performance under Prime Minister Narendra Modi. Forbes quotes the results of a Gallup survey that finds an enormous “decline in the percentage of Indians who rate their lives positively enough to rate it as 'thriving' since Modi assumed office”.
In fact, just 3 per cent of Indians consider themselves as “thriving” compared to 14 per cent in 2014, 7 per cent in 2015, and 4 per cent in 2016. The survey shows decline among urban Indians have been more gradual than their rural counterparts, which are seeing mutinous levels of unrest everywhere, even in PM Modi’s home state Gujarat, where the Opposition led by Congress gained most of the rural seats.
With monthly wages for low-skilled workers declining from 2016 to 2017 from Rs 13,300 to just Rs 10,300, a fallout of the utter economic mismanagement coupled with allowing the top one per cent to garner 73 per cent of the wealth assessed, even as the GDP growth rate shrunk by 2 per cent in 2016-17 mostly impacting the already poor, the difference couldn’t get any starker.
Yet, as PM Modi promotes his country with the catchphrase “India Means Business”, the underlying meaning for those who can read the signals is absolutely this: India means oligarchy; India means cartelisation, India means systemic, actively encouraged inequality.
In fact, PM Modi’s policies have not only added to the “economy of the one per cent”, they have done so at the expense of the poor and the middle classes, while parading “improved” rankings in “ease of doing business”, or “credit ratings”. Laughable as these rankings are, especially in the face of dipping GDP-to-investment ratio and the near flat-lining of PM’s pet scheme Make in India, that these come in the face of such glaring inequalities is not at all surprising.
Whither inclusive growth?
While PM Modi addresses the opening plenary session later at the World Economic Forum later today, fawning opeds would be written in praise of India joining the “Big League” of nations, shaping transnational policy. If actively creating and monetising inequality is contributing to India’s “soft and hard power” at Davos, if almost stalling the investment climate within India and favouring a handful of corporate behemoths (further emboldened via opacity of political funding) at the expense of the thousands of smaller entrepreneurs is adding to India’s heft at the high table, then, perhaps we can talk about Modi flexing muscles in Davos and courting the global CEOs.
However, if the report by the WEF released on January 22 on India’s performance in inclusive development is anything to go by, we are staring at as dismal a figure as the Oxfam report. India ranks below China and even Pakistan, Sri Lanka, Nepal, Bangladesh, Mali, Uganda, Rwanda, Burundi, Ghana, Ukraine, Serbia, Philippines, Indonesia, Iran, Macedonia, Mexico, Thailand and Malaysia, on this WEF index of inclusive growth, at a pitiable 60th among 79 developing economies.
So what’s the point in being the seventh largest economy in the world at 2.3 trillion US dollars and the fastest emerging economy globally, if the wealth generated is cornered by just the top one per cent?
This inequality by design, this encouragement of extreme poverty and extreme wealth, makes India a “kakistocracy”, rule of the worst, the least qualified and the most unethical. Sadly, PM Modi and his delegates will be avoiding questions on these matters that involve the bottom 99 per cent of Indian people.
Also read: Oxfam Davos report is a warning for Modi sarkar and India Inc