Impact of Economic Inequality

Economic Inequality undermines the productivity and morale of working people, and limit the number of
people who could participate in the market and thus a country deprives itself of the contributions the
lower section of its society could make to its economic development.
Inequality of incomes leads to some other very serious economic and social consequences:
(i) Class-conflict & Political Abuse:
It has created two sections in society—the ‘haves’ and the ‘have-not’s—which are ever on the war path.
This has resulted in ever mounting social tensions and political discontent.
The rich dominate the political machinery, and they use it to promote their own exclusive interests.
Political equality is a myth without…show more content…
These powerful monopolies and industrial combines charge unfair prices from the consumer and crush the
small producers. This leads to a redistribution of income from consumers to the shareholders of
monopolies.
(iii) Suppression of Talent:
It is said that ‘slow rises merit by poverty depressed’. It is not easy for a poor man to make his way in life,
however brilliant he may be. It is a great social loss that brainy people without money are unable to make
their due contribution to social welfare. (iv) Economic Slowdown:
A widening income gap can impede the development of a country's consumer markets as purchasing
power becomes concentrated among a small elite. Higher income inequality can also result in non-income
disparities such as health and education, thus hindering a government's effort to invest in these areas…
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Robust and lasting growth requires reducing inequalities, which otherwise undermine the productivity and
morale of working people, and limit the number of people who could participate in the market. Indeed
public investments like in MNREGA not only extend social protection to India’s impoverished populations:
they also place more disposable income in millions of more hands which spurs growth, but equitably, from
below.
Mere leveling up will not bridge the gulf between the rich and the poor. It will also be necessary to raze to
the ground the high mountains of privilege. A lot has been done under the 20-Point Economic Programme
to help the poor and lift them economically, such as abolition of bonded labour, scaling down or writing off
of debts, provision of house sites, etc.