Income inequality

Final Draft Submitted In Partial Fulfillment Of Course Titled Legal

Methods and Research Methodology For Completion Of B.A.L.L.B. (Hons.)
In Academic Year 2020-21

Submitted to- Submitted by –

MR. VIJAYANT SINHA Kumar Utsav
Faculty of Legal Methods and Roll no. - 2123
Research Methodology 4th Semester, B.A.LL.B.(Hons.)

FEBRUARY 2021

Chanakya National Law University

Nyaya Nagar, Mithapur, Patna
(Bihar)

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 DECLARATION
I, Kumar Utsav, hereby declare that the work reported in B.A. LL.B (Hons.) project report titled
“INCOME INEQUALITY” submitted at Chanakya National Law University, Patna is an
authentic record of my work carried out under the supervision of MR. VIJAYANT SINHA. I
have not submitted this work from elsewhere and I am fully responsible for the contents of my
project report.

KUMAR UTSAV
B.A. LL.B.(Hons.)
4th Semester

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 ACKNOWLEDGEMENT

The researcher takes this opportunity to express his profound gratitude and deep regards to his
guide MR. VIJAYANT SINHA, for his exemplary guidance, monitoring and constant
encouragement throughout the course of this project. The blessing, help and guidance given by
him time to time shall carry the researcher a long way in the journey of life on which the
researcher is about to embark.
The success and final outcome of this project required a lot of guidance and assistance from
many people and I am extremely privileged to have got this all along the completion of this
project. Last, but not the least, I am thankful to all the members of my family, friends and
teachers without whose assistance and encouragements I could not have completed my thesis.

KUMAR UTSAV

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 TABLE OF CONTENTS
INTRODUCTION........................................................................................................................ 5

RESEARCH METHODOLOGY................................................................................................. 7

AIMS & OBJECTIVES ………………………………………………………….7

RESEARCH QUESTIONS ………………………………………………………7

HYPOTHESIS................................................................................................................................ 8

SCOPE OF STUDY....................................................................................................................... 8

2. RISING INCOME INEQUALITY AROUND THE WORLD...........................................9

2.1. Why is Income Inequality rising?...........................................................................10

3. INEQUALITY.......................................................................................................................... 12

3.1. The Growing Gap between Rich and Poor...........................................................14

4. CONSEQUENCES OF EXTREME INEQUALITY........................................................15

5. RISING WEALTH INEQUALITY IN INDIA.................................................................19

CONCLUSION............................................................................................................................ 23

BIBLIOGRAPHY........................................................................................................................ 25

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 1. INTRODUCTION

DR. Bhim Rao Ambedkar in his prophetic speech on November 25, 1949 in the Constitutional
Speech gave three warnings. He stated that in politics we will have equality and in social and
economic life we will have inequality, he further went on to add that in politics we will be here
cognizing the principle of one man one vote and one vote one value but in our social and
economic structure, we shall, by reason of our social and economic structure we will have
inequality he further asked that for how long shall we continue to deny equality in our social and
economic life?1 And sadly after 73 years of independence we still don’t have any answer for it.
Majority of the political parties in India has achieved their political equality but still the people in
the country are facing economic inequalities, and it’s not like only India is the country where
there is wealth disparity and the incomes of only rich people are rising but according to a report
of World Bank half of the World Population is richer than before. With change of time the
income of people has increased but it has also led to rise in Inequality.2

The gap between the super rich and the rest of the world is widening as wealth continued to be
owned by a small minority as claimed by Oxfam. 3 As per the report by Oxfam some 82% of
money generated in 2018 went to the richest 1% of the global population while the poorest half
saw no increase at all.

Oxfam has produced similar reports for the past five years. In 2017 it calculated that the world’s
eight richest individuals had as much wealth as the poorest half of the world. This year, it said 42
people now had as much wealth as the poorest half, but it revised last year’s figure to 61. Oxfam
said the revision was due to improved data and said the trend of widening inequality. As
inequality is on rise all around the globe, India is no different and according to a survey India’s

1
http://mumbaimirror.indiatimes.com/opinions/columnists/ajit-ranade/ambedkars-warning-on-
inequality/articleshow/45391676.cms
2
http://www.worldbank.org/en/news/feature/2019/10/23/yes-global-inequality-has-fallen-mo-we-shouldnt-be-
complacent#:~text=%E2%80%9%COur%20data%20suggest%20a%20modest,no%20guarantee%20it%will%20cont

6
inue.

richest 1% corner 73% of wealth generation. Besides, 67 crore Indians comprising the
population’s poorest half saw their wealth rise by just 1% as per the survey released by the
International rights group Oxfam. Last year’s survey had showed that India’s richest 1% held a
huge 58% of country’s total wealth- higher than the global figure of about 50%. The situation
appears even grimmer globally, where 82% of the wealth generated last year worldwide went to
the 1%, while 3.7 billion people that account for the poorest half of population saw no increase in
their wealth.

Inequality has been on the rise across the globe for several decades. Some countries have
reduced the number of people living in extreme poverty. But economics gaps have continued to
grow as the very richest amass unprecedented levels of wealth. Among industrial nations, the
United States is by far the most top-heavy, with much greater shares of national wealth income
going to the richest 1% than any other country.

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 RESEARCH METHODOLOGY

The researcher will be relying on doctrinal method of research to complete the project and the
researcher will be relying on both primary and secondary sources to complete the project.

This study has been designed keeping in view the objectives, scope as well as hypothesis of the study.
The methodology of research differs according to the subject and problem under study.

I. Primary Sources : Articles and reports related to the topic.

II. Secondary sources: Books and e-library sources, websites.

AIMS & OBJECTIVES

The researcher tends to emphasize on the study of:

 To analyze the rising income around the world with special emphasis on India.
 To analyze the rising wealth inequalities around the globe with special emphasis on India.
 To analyze the increasing inequalities in India.

RESEARCH QUESTIONS

1. What is Income Inequality?

2. Why is the income inequality continuously rising around the globe?
3. What are the possible solutions to combat Inequality?

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 HYPOTHESIS

The researcher presumes that –

 There is rise in income of people around the globe but the poor are not getting richer.
 There is economic Inequality.
 The income inequality is rising around the world.
 The income inequality is rising in India

SCOPE OF STUDY
1. This study would pave the way for the growth of similar studies in the area of “Income
Inequality around the World”
2. It would create awareness among the people on the income distributed to them.
3. This Study will also be helpful in analyzing the Consequences and reasons of inequality.

And finally it can be used as a basic for numerous scientific and innovative studies on the
performance of Rising Income and Wealth Disparity in the days ahead.

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 2. RISING INCOME INEQUALITY AROUND
THE GLOBE

According to the World Social Report 2020, published by the UN Department of Economic and
Social affairs (DESA), “Income inequality has increased in most developed countries, and even
in some middle-income countries- including China and India who are the World’s fastest
growing economies.4 In the foreword, Antonio Guteress states that the world is confronting the
harsh reality of a deeply unequal global landscape, in which economic woes and inequalities in
both developed and developing countries. Income disparities and a lack of opportunities are
creating a vicious cycle of inequality, frustration and kind of a discontent across the generations.

The Study5 further showed that the richest one percent of the population are the biggest winners
in changing the global economy and they have increased their share of income between 1990 and
2015, and while at the other end, the bottom 40% earned less than a quarter of income in almost
all countries.

The consequences of these rising income inequalities are corrosive for everyone. Extreme
inequality corrupts politics, hinders economic growth and stifles social mobility. It leads to crime
and even violent conflict. It sqanders talent, thwarts potential and in a way undermines the

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foundations of the society.

4
https://news.un.org/en/story/2020/01/1055681
5
UN (2020), World Social Report 2020: Inequality in a Rapidly Changing World, UN, New York,
http://doi.org/10.18356/7f5d0efc-en

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Crusically we can see that the rapid rise of economic inequality is standing in the way of
eliminating global poverty. Today thousands of millions of people are living without access to
clean drinking water, and without food to feed their families. We cannot improve the lives of
these people unless and until we tackle the extreme concentration of wealth and power in the
hand of the elites.

The world’s poorest countries have taught us that inequalities are not inevitable or accidental but
the result of deliberate policy choices and the most impressive point is that Inequality can be
reversed and all we need is an action to build a fairer economic and political system that values
everyone. The rules and systems that have led to today’s inequality explosion must chance and
that has to be changed. We need urgent actions to level the playing field by implementing
policies that redistribute money and power from wealthy elites to the majority.

2.1. Why is income inequality rising?

The rise of the 1% is the most visible face of income inequalities. Many factors explain the rise of income
inequality such as economic factors, role of technology in globalizing economy, social factors, factors
related to rising income of top earners.

The most important of all the above mentioned factors is globalization or the process through which the
global economy has become more integrated through a complex series of “flows”, Including
technology and information, trade and investment. Just as it has in the past, technology is
destroying old jobs and creating new Ones. This is making high-skilled workers even more
valuable and Killing off the jobs of some middle and low-skilled workers. It’s also helping to
shift the balance between labour vs. Capital, delivering a Larger share of income to the owners of
capital, such as Entrepreneurs, and a smaller share to the people who work for them.

Inequality has also been affected by changes in our societies, Such as the growing tendency for
people to marry people from very similar social and education backgrounds, and by changes in
the Workplace, such as the rise in part-time working and the decline in Union membership.
Through the taxes it collects and the benefits it pays out, the State plays a major role in reducing

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inequality. But the state’s role has been evolving, with a general trend towards policies that
redistribute less.

Other economic policies, such as a move to reduce regulation, have also probably helped to
increase inequality. Some of these factors have also contributed to the rise of “the 1%”. But a
range of special factors have also been involved in boosting top incomes. These include the
emergence of a “superstar” Labour market, the growing use of stock options and performance
Pay and the “financialisation” of economies.

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 3. INEQUALITY

Inequality has many different dimensions, including race, gender, geography and economy
which rarely work in isolation.6 Income inequality means unequal access to wealth and income.
This brief mostly deals with income. In most developed countries, market income is mainly from
wages and salaries, but also from returns on capital such as shares and rents. People’s market
income is then reduced by taxation and/or increased by government transfers such as pensions
and child payments.

Inequality has been on the rise across the globe for several decades. Some countries have
reduced the number of people living in extreme poverty like India and many other developing
nations but the economic gap have continued to grow as the very richest amass unprecedented
levels of wealth. Among the developed nations, the US is by far the most top-heavy, with much
greater shares of national wealth and income going to the richest 1 percent than any other
countries.7

The Rise of private capital and the fall of public capital in rich countries, 1976-201

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This project is primarily concerned with the concentration of financial resources and wealth in the hand of few,
which can or which affect political, social, and cultural processes to the deteriment of the most vulnerable. So in this
project, I will be using the term “inequality” to refer to extreme economic inequality.
7
Suisse Global Wealth Report, 2019
8
World Inequality Report 2018- Executive Summary, p.11
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When one is very poor, increasing income or wealth is related to increasing well being as we all
know that greater access to money usually equates to increased food security, increased access to
healthcare, education and so on. However we have to understand that the direct relationship
between income or total wealth and well being breaks down at higher level of income. In other
words, income or wealth are not in themselves adequate metrics for assessing societal
development or human well being.

Wealth Inequality is largely driven by the unequal ownership of capital in its many forms, not
just financial capital but also human, natural, physical, and social capital all of which contribute
to human opportunity and well-being. There’s been a general increase in net private wealth in
recent decades. On the other hand, net public wealth that is public assets minus public debts has
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declined in nearly all countries since the 1980s. In other words, wealth has become more
concentrated in private hands in recent decades than it was earlier. Not only has wealth and
income become more concentrated in private hands, but it is also now concentrated in fewer
hands than it was a few decades ago.10

Top 10% income share across the world, 1980-2016

Here, in this graph we can see the percentage of national income that was earned by the

9
World Inequality Report 2018- Executive Summary. p. 11
10
World Inequality Report 2018- Executive Summary, p.6
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wealthiest 10 percent of the population in various countries since 1980. If we take the USA and
Canada as an example, we see that in 1980, the richest 10 percent of the population received 34
percent of national income. In 2016, the wealthiest 10 percent received 47 percent. The pattern is
the same in most countries although the rate of change in terms of income and wealth inequality
differs from country to country.

When we look at the distribution of wealth globally, we see that the wealthiest one percent of
the humanity owns about half of all households’ wealth in the world and that the poorest 70
percent owns less than three percent of the total wealth. Income inequality has important
implications for society.

3.1. THE GROWING GAP BETWEEN RICH AND POOR

Trends in income and wealth tell us a clear story that the gap between the rich and poor has
reached new extremes and is still growing, while power increasingly lies in the hands of elites.
Between 1980 and 2002, inequality between countries rose rapidly and reached a very high
level.11 It has since fallen slightly due to growth in emerging countries, especially in China. But it
is inequality within countries that matters, most to people, as the poorest struggle to get by while
their neighbors prospers, and this is in a way rising rapidly in majority of the countries and
according to reports 7 out of 10 people live in countries where the gap between the rich and poor
is greater than it was 30 years ago. 12 In Countries around the world 13
wealthy minorities are
taking an ever increasing share of their nation’s income and this is quite prevalent in majority of
the countries.

11
B. Milanovic (2009) ‘Global Inequality and the global Inequality Extraction Ratio: The Story of the Past Two
Centuries’ Policy Researching Working Paper 5044, Washington, D.C: World Bank,
http://elibrary.worldbank.org/doi/book/10.1596/1813-9450-5044
12
Calculated based on B. Milanovic (2013) ‘All the Ginies Dataset (Updated June 2013)’,
http://econ.worldbank.org/WBSITE/EXTERNAL/0,,CONTENTmdk:22301380-pagePK:64214943-
theSitePK:469382,00.HTML
13
F. Alvaredo, A.B. Atkinson, T. Piketty and E. Saez (2013) “ The World Top Income Database”,
http://topincomes.g-mond.parisschoolofeconomics.eu

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 4. CONSEQUENCES OF EXTREME INEQUALITY

 Extreme inequality: A barrier to poverty reduction

The rapid rise of extreme economic inequality is significantly hindering the Fight against
poverty. New research from Oxfam has shown that in Kenya, Indonesia and India, millions more
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people could be lifted out of poverty if Income inequality were reduced. If India stops
inequality from rising, it could end extreme poverty for 90 million people by 2019. If it goes
further and reduces Inequality by 36 percent, it could virtually eliminate extreme poverty. 15 The
Brookings Institution has also developed scenarios that demonstrate how Inequality is preventing
poverty eradication at the global level. In a scenario Where inequality is reduced, 463 million
more people are lifted out of poverty Compared with a scenario where inequality increases. 16
Income distribution within a country has a significant impact on the life Chances of its people.
Bangladesh and Nigeria, for instance, have similar Average incomes. Nigeria is only slightly
richer, but it is far less equal. The Result is that a child born in Nigeria is three times more likely
to die before Their fifth birthday than a child born in Bangladesh. Leaders around the world are
debating new global goals to end extreme poverty by 2030. But unless they set a goal to tackle
economic inequality they cannot succeed – and countless lives will be lost.

 Extreme inequality undermines economic growth that helps The many:

There is a commonly held assumption that tackling inequality will damage Economic growth. In
fact, a strong body of recent evidence shows extremes of Inequality are bad for growth. In

14
http://brookings.edu/blogs/up-front/posts/2014/05/05-data-extreme-poverty-chandy-kharas
15
Ibid
16
http://brookings.edu/~/media/Research/Files/Reports/2013/04/ending%20extreme%20poverty%20chandy/The_Fin
al_Countdown.pdf

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countries with extreme economic inequality, Growth does not last as long and future growth is
undermined.18 IMF economists Have recently documented how economic inequality helped to
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cause the global Financial crisis. The ‘growth’ case against tackling economic inequality
clearly No longer holds water Extreme inequality also diminishes the poverty-reducing impact of
growth. In many countries, economic growth already amounts to a ‘winner takes all’ Windfall
for the wealthiest in society. For example, in Zambia, GDP per capita Growth averaged three
percent every year between 2004 and 2013, pushing Zambia into the World Bank’s lower-middle
income category. Despite this Growth, the number of people living below the $1.25 poverty line
grew from 65 percent in 2003 to 74 percent in 2010. 20 Research by Oxfam21 and the World Bank
suggests that inequality is the missing link explaining how the same Rate of growth can lead to
different rates of poverty reduction.

 Economic inequality compounds inequalities between Women and men

One of the most pervasive – and oldest – forms of inequality is that between Men and women.
There is a very strong link between gender inequality and Economic inequality. Men are over-
represented at the top of the income ladder and hold more Positions of power as ministers and
business leaders. Only 23 chief executives Of Fortune 500 companies and only three of the 30
richest people in the world Are women. Meanwhile, women make up the vast majority of the
lowest-paid Workers and those in the most precarious jobs. In Bangladesh, for instance, Women
account for almost 85 percent of workers in the garment industry. These jobs, while often better

18
See, for example, A. Berg and D. Ostry (2011) ‘Warning!Inequality May Be Hazardous to Your Growth’,
http://blog-imfdirect.imf.org/2011/04/08/inequalityand-growth;
T. Persson and G. Tabellini (1994) ‘Is InequalityHarmful for Growth?’, American Economic Review 84(3):600–
621; A. Alesina and D. Rodrik (1994) ‘Distributive Politicsand Economic Growth’, The Quarterly Journal of
Economics(1994) 109 (2): 465–90.
19
M. Kumhof and R. Rancière (2010) ‘Inequality,Leverage and Crises’, IMF Working Paper, IMF,
http://imf.org/external/pubs/ft/wp/2010/wp10268.pdf
20
Data based on World Bank, ‘World Development Indicators’, http://data.worldbank.org/data-
catalog/worlddevelopment-indicators
21
E. Stuart (2011) ‘Making Growth Inclusive’, Oxford: Oxfam International, http://oxf.am/RHG;
R. Gower, C. Pearce and K. Raworth (2012) ‘Left Behind By the G20? How inequality and environmental
degradation threaten to exclude poor people from the benefits of economic growth’, Oxford: Oxfam,
http://oxf.am/oQa

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for women than subsistence farming, offer Minimal job security or physical safety: most of those
killed by the collapse Of the Rana Plaza garment factory in April 2013 were women. Studies
show that in more economically unequal societies, fewer women Complete higher education,
fewer women are represented in the legislature, And the pay gap between women and men is
wider.22 The recent rapid rise in Economic inequality in most countries is, therefore, a serious
blow to efforts to achieve gender equality.

 Economic inequality drives inequalities in health, education And life

chances

Gender, caste, race, religion, ethnicity and a range of the other identities that are ascribed to
people from birth also play a significant role in creating the division between the haves and the
have-nots. In Mexico, the maternal Mortality rate for indigenous women is six times the national
average and is As high as many countries in Africa. 23 In Australia, Aboriginal and Torres Strait
Islander Peoples are disproportionately affected by poverty, unemployment, Chronic illness and
disability; they are more likely to die young and to spend Time in prison. Economic inequality
also leads to huge differences in life chances: the poorest People have the odds stacked against
them in terms of education and life Expectancy. The latest national Demographic and Health
Surveys24 demonstrate how poverty interacts with economic and other inequalities to create
‘traps of disadvantage’ that push the poorest and most marginalized people to the Bottom – and
keep them there. The poorest 20 percent of Ethiopians are three times more likely to miss out on
School than the wealthiest 20 percent. When we consider the impact of gender Inequality
alongside urban/rural economic inequality, a much greater wedge Is driven between the haves
and the have-nots. The poorest rural women Are almost six times more likely than the richest
urban men to never attend School.25 Without a deliberate effort to address this injustice, the same

23
E. Godoy (2010) ‘Millennium Goals Far Off for Mexico’s Indigenous Population’, Inter Press Service, 18
October, http://ipsnews.net/2010/10/millennium-goals-far-off-formexicos- indigenous-population/
24
The Demographic and Health Surveys Program, http://dhsprogram.com/Data
25
The Demographic and Health Surveys Program (2011)‘Ethiopia: Standard DHS, 2011’,
http://dhsprogram.com/what-we-do/survey/survey-display-359.cfm

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will be true for their daughters and granddaughters.

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 5. RISING WEALTH INEQUALITY IN INDIA

Widening Income inequality is the defining challenge of our time. In advanced economies, the
gap between the rich and poor is at its highest level in decades. Economic Inequality is the
skewed distribution of income and wealth that has reached extremest levels and it’s still rising.
According to a report by World Bank 7 out of 10 people live in a country where economic
inequality is worse than it was 25 years ago. Measures of Inequality based on Gini coefficients of
gross and net incomes have increased substantially since 1990 in most of the developed nation.

India’s income inequality problems are well-acknowledged and many believe that the roots of
his income were laid down by the British Raj. The institutional and commercial policies of
British India made the rich richer and poor poorer during Colonial rule, according to this popular
view.

However, a new research by economic historian Tirthankar Roy of the London School of
Economics finds that the role of the British in worsening income inequality may be overstated.
The British rule transformed India’s economy, shifting the nation from an exporter of
manufactured Goods (such as textiles) into an exporter of agricultural goods, according to Roy.
Most economic historians claim that this increased inequality between those owning property
and the Property-less because of capitalist exploitation and colonial intervention, favouring
landlords, traders and money-lenders over peasants, artisans and landless labourers.
Reclassifying historical national income data from around 90% of the workforce compiled by
Statistician F.J. Atkinson into broad occupation classes and looking at the income shares of the
top and Bottom end of the distribution, Roy finds inconclusive evidence for this claim. His
research finds that the fortunes of the core propertied group, the rentier-landlords, actually fell
Propertied classes also include the land-owning peasants, who experienced a rise in income share
in the Pre-war decades between 1875 and 1895 followed by a decline. This, according to Roy, is
because the Open economy of the 19th century affected land- and trade-dependent occupations
differently. Low and stagnant land yields in India limited average incomes of those engaged in
land-dependent Occupations. Despite the limited growth, Roy finds that the distance between

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average income and the Poverty line did not change significantly, suggesting that the poorest did
not become poorer under British rule. By contrast, trade-dependent occupations could escape this
land-yield constraint and saw incomes Grow. Roy concludes that this caused the emergence of a
middle class with no other significant effect On income distribution. This rising inequality
contrasts to the 30 years following the country’s Independence, when income. Inequality was
widely reduced and the incomes of the bottom 50% grew at a faster rate than the National average.
According to the report, since 1980, the richest 1% captured twice as much as the poorest 50% of
World population. In other words, since 1980, 27% of all new income worldwide was captured by
the Richest 1%, while the poorest 50% captured only 13% of growth. The report was coordinated
by Economists FacundoAlvaredo, Lucas Chancel, Thomas Piketty, Emmanuel Saez and Gabriel
Zucman. These figures are brought into sharp contrast considering the top 1% currently represents
75 million Individuals while the bottom 50% represents 3.7 billion individuals,” it said, adding
that there have been large shifts in the ownership of capital.

Analysis of India’s Performance on some of the indicators of Equality:

 India has fared dismally in a two-year study on income inequality conducted by the
World Economic Forum (WEF). The report, titled Inclusive Growth and Development
Report 2015, ranked India 37th out of 38 lower-Middle-income countries in fiscal
transfers. Another area to prioritize improvement for India is “Asset Building and
entrepreneurship”, in particular the sub-pillar “Small business ownership”, where it ranks
at the Bottom (38th) among its peers.
 Educational enrollment rates are relatively low across all levels, and quality varies
greatly, leading to notable differences in educational performance among students from
different socio-economic backgrounds.
 While unemployment is not as high as in some other countries, the labor force
participation rate is low, the Informal economy is large, and many workers are in
vulnerable employment situations with little room for social mobility.
 India under-exploits the use of fiscal transfers. Its income tax is regressive and social
spending remains low, Which limits accessibility of healthcare and other basic services.
Sanitation continues to be a problem across the board.

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  India performed well in terms of access to finance for business development and real
economy investment, Yet new business creation continues to be held back by the large
administrative burden of starting and Running companies, corruption, and
underdeveloped infrastructure.

STEPS TAKEN BY THE GOVERNMENT OF INDIA:

1. JAN DHAN YOJANA: The IMF paper on income inequality notes that governments in
emerging market Economies need to push such efforts at inclusion to make a dent in
inequality. Country experiences suggest that policies such as granting exemptions from
onerous documentation requirements, requiring banks to Offer basic accounts, and
allowing correspondent banking are useful in fostering inclusion. Jan Dhan Yojana seeks
to bring banking services to the poor, including landless labourers, and offer them easy
credit. However, the IMF warns against offering too much credit “without sufficient
regard for financial Stability”.

2. LABOUR REFORMS: States like Rajasthan and Maharashtra have begun to loosen
rules for hiring of labour.Cross-country evidence shows easing of market regulations and
technological progress reduce the chances of the less-educated labour force rising in life.
Labour market policies should attempt to avoid both excessive regulation and extreme
disregard for labor conditions.

3. TAX REFORMS: The IMF paper is clear that tax rates need to be far more progressive
across most of the world. It uses data from non-official sources to show that the income
share of the middle 20% in BRICS countries has shrunk even more than for developed
countries in the period 1990-2009. “The redistributive role of fiscal policy could be
reinforced by greater reliance on wealth and property taxes, more progressive income
taxation, removing opportunities for tax avoidance and evasion, better targeting of social
benefits while also minimizing efficiency costs, in terms of incentives to work and save.”

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4. BUDGET 2015-16: has announced a timeline to ease corporate tax rates to 25% in the
next four years, but plans to erase most tax exemptions. .
5. SKILL DEVELOPMENT: Improving education quality, eliminating financial barriers
to higher education, and providing support for apprenticeship programmes are all key to
boosting skill levels in both tradable and non-tradable sectors. These policies can also
help improve income prospects of future generations as educated individuals are better
able to cope with technological and other changes.

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 CONCLUSION

Today’s extremes of inequality are bad for everyone. For the poorest people in society, whether
they live in Africa or the richest country in the world, the opportunity to emerge from poverty
and live a dignified life is fundamentally blocked by extreme inequality.

We all should call for concerted action to build a fairer economic and political system that values
every citizen. Governments, institutions and corporations have a responsibility to tackle extreme
inequality. They must address the factors that have led to today’s inequality explosion, and
implement policies that redistribute money and power from the few to the many.

We all should work to make governments work for citizens and tackle extreme inequality Public
interest and tackling extreme inequality should be the guiding principle of all global agreements
and national policies and strategies. It must go hand in hand with effective governance that
represents the will of the people rather than the interests of big business. We must also ensure
that Specific commitments must be include agreement of a post-2015 goal to eradicate extreme
inequality by 2030; national inequality commissions; public disclosure of lobbying activities;
freedom of expression and a free press.

We must promote women’s economic equality and women’s rights Economic policy must tackle
economic inequality and gender discrimination together. There should be Specific commitments
and that must include: compensation for unpaid care; an end to the gender pay gap; equal
inheritance and land rights for women; data collection to assess how women and girls are
affected by economic policy. And we must ensure that we pay workers a living wage and close
the gap with skyrocketing executive reward Corporations are earning record profits worldwide
and executive rewards are skyrocketing, whilst too many people lack a living wage and decent
working conditions and this must change. The Specific commitments must include: increasing
minimum wages towards living wages; moving towards a highest-to-median pay ratio of 20:1;
transparency on pay ratios; protection of worker’s rights to unionize and strike.

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We must Share the tax burden fairly to level the playing field too much wealth is concentrated in
the hands of the few. The tax burden is falling on ordinary people, while the richest companies
and individuals pay too little. Governments must act together to correct this imbalance. And the
Specific commitments must include: shifting the tax burden away from labour and consumption
and towards wealth, capital and income from these assets; transparency on tax incentives;
national wealth taxes and exploration of a global wealth tax.

We must also work to close international tax loopholes and fill holes in tax governance today’s
economic system is set up to facilitate tax dodging by multinationals and wealthy individuals.
Until the rules are changed and there is a fairer global governance of tax matters, tax dodging
will continue to drain public budgets and undermine the ability of governments to tackle
inequality. And the Specific commitments must include: a reform process where developing
countries participate on an equal footing, and a new global governance body for tax matters;
public country-by-country reporting; public registries of beneficial ownership; multilateral
automatic exchange of tax information including with developing countries that can’t
reciprocate; stopping the use of tax havens, including through a black list and sanctions; making
companies pay based on their real economic activity.

We must work to implement a universal social protection floor Social protection reduces
inequality and ensures that there is a safety net for the poorest and most vulnerable people. Such
safety nets must be universal and permanent. And Specific commitments must include: universal
child and elderly care services; basic income security through universal child benefits,
unemployment benefits and pensions. We must also work to target development finance at
reducing inequality and poverty, and strengthening the compact between citizens and their
government development finance can help reduce inequality when it is targeted to support
government spending on public goods, and can also improve the accountability of governments
to their citizens. And Specific commitments must include: increased investment from donors in
free public services and domestic resources mobilization; assessing the effectiveness of
programmes in terms of how they support citizens to challenge inequality and promote
democratic participation.

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 BIBLIOGRAPHY

BOOKS AND JORNALS REFERRED:

1. UN (2020), World Social Report 2020: Inequality in a Rapidly Changing World, UN,
New York
2. Even it Up “Time to End Inequality” Published by Oxfam GB for Oxfam International
under ISBN 978-1-78077-721-4 in October 2014.

WEBSITES REFERRED:

1. www.drishtiias.com/daily-updates/daily-news-analysis/global-inequality-crisis-report-
oxfam-international
2. www.cnn.com
3. www.forbesrichestpersonslist.com
4. www.timesofindia.com
5. www.thehindu.com

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