Oxfam Davos report is a warning for Modi sarkar and India Inc

Economists ranging from Amartya Sen to Thomas Piketty, among others, have been warning of increasing poverty in a small island of stupendous wealth. Most economists put this down as part of the consequences of neoliberalism and a highly skewed network of financial institutions like the World Bank, the IMF and even BRICS. But there are gender biases in both the richest stratum and vast masses of the poor, as a consequence of the current economic policies and the political stranglehold of the plutocracy that effectively decides who rules the world.

Is this too strong a statement? Is this radical rhetoric? Let's look at the evidence.

The Oxfam Davos report published on January 19 shows that that the wealth of the poorest half of the world's population has fallen by a staggering trillion dollars since 2010, a drop of 41 percent in just five years. In the meantime, the wealth of the richest 62 has increased by more than half a trillion dollars to $1.76 trillion. Women are disproportionately affected by inequality. Of the current 62 people, 53 are men and just nine are women. Oxfam's prediction made before last year's Davos meeting, that the one per cent would soon own more than the rest of the world actually came true in 2015, a year earlier than expected.

This fabulous wealth has been earned by a different set of rules tailored for the super rich. Winnie Byanyima, Oxfam international executive director, who co-chaired last year's Davos meeting challenged "the governments, companies and elites at Davos to play their part in ending the era of tax havens, which is fuelling economic inequality and preventing hundreds of millions of people from lifting themselves out of poverty.

Multinational companies and wealthy elites are playing by different rules, refusing to pay the taxes that society needs in order to function. The fact that 188 of 201 leading companies have a presence in at least one tax haven shows it is time to act." But challenging the mighty is no easy task. It is time to recall that the NDA government in India promised to bring back thousands of crores of dollars of black money. Ram Jethmalani left the BJP on the ground that it refused to keep its promise, all the more galling since Amartya Sen and Jean Dreze had, in 2013, calculated that, in India, 68.7 per cent of the population was below the poverty line.

In this kind of economic climate poverty rarely decreases significantly. The Niti Aayog had to be created to abolish the Planning Commission, which had accumulated a vast bank of systematic data on poverty, the impact of poverty alleviation programmes and more ambitious egalitarian policies. This pro-corporate forces in all major parties did not want. Taxes are relatively low, and there are plenty of mechanisms as well as tax havens to avoid hefty amounts of taxes. Globally, if taxes were fully paid, without deposits in tax havens, an extra $190 billion would be available to governments every year.

Though the number of people living in extreme poverty halved between 1990 and 2010, the average annual income of the poorest 10 percent has risen by less than $3 a year in the past 25 years. Economists know well that a maldistribution of wealth reduces purchasing power and thus effective demand by the lower strata. This diminishes the markets, especially for wage goods required by the poor and middle strata. If there are not enough resources among the poor to survive, they will be desperate.

As P Sainath noted years ago, more than two lakh farmers have committed suicide. The Oxfam report is a warning. The policies of the Indian political and economic elite and their companies are made for a disaster. But are the elite prepared to listen? Unlikely. They are too busy making unachievable and profoundly elitist policies. They are the ruling classes.