The Economic Divide in India: How the Gap Between The Rich And The Poor Affects A Nation’s Progress
With nominal GDP, India is the fifth-largest economy in the world. It has witnessed an extraordinary growth story in recent decades. Nevertheless, this growth has always been juxtaposed with an ever-widening gap between the rich and the poor—this economic divide denotes severe differentiation in income and wealth but is also a cause of concern regarding sustainable development and social integrity in the long run for India.
The Growing Economic Divide
The economic growth story of India stems from the service sector boom, quick urbanization, and the advancement of technology. Yet, this growth benefitted only to some degree and some have held back. As stated in the World Inequality Report, the top 1% of India’s population holds more than 20% of the total wealth of India while the bottom 50% holds merely 13% of it. All these mean a concentration of wealth induced by a few and give rise to glaring issues that have perpetuated inequalities.
Niti Aayog estimates that the disparity between India‘s urban population and rural citizens is evident. Urban centers are thriving with development in infrastructure, education, and health care, but rural India is far behind, with facilities lacking for almost 69% of India’s population residing in rural areas. This disparity brought forth a series of differences resulting in uneven patterns of growth.
How the Wealth Gap Hurdles Progress
Income inequality is a numerical fact, but it can have immense consequences for the nation’s progress on many fronts. Economically, most develop into poverty and restrict access to education, healthcare, and skill development. This stunts the workforce’s full potential, making it harder for the nation to realize its full economic potential.
One of the most significant losers in economic disparity is education. According to National Statistical Office (NSO), over twenty percent of children in the age group of 6-14 in the rural part of India are out of school while only six percent are city children. With no proper education, these children will remain within poverty’s four walls and will never be able to secure a well-paying job.
Health inequality is one of the most important issues. According to data collected in the National Family Health Survey (NFHS-5), child malnutrition has indeed been an age-old issue for the poorer population, wherein the underweight proportion is more among rural children than urban children. Poor healthcare access in rural areas clubbed with poor household income end up having a negative effect on life expectancy at the same time increasing the rate of avoidable morbidity and mortality.
Regional Disparities in Development
Of course, regional inequalities play a major role in the overall economic divide in India. While on the one hand, states like Maharashtra, Gujarat, and Delhi, thrive with explosive growth, on the other, states like Uttar Pradesh, Bihar, and Odisha are still grappling with the issues of poverty and lack of infrastructure. According to the Economic Survey 2023-24 the per capita income of Delhi is around ₹ 4,25,000 against that of Bihar which is a meager ₹ 60,000 per person. This regional imbalance prevents several regions from accessing the same prosperity levels.
This regional gap also displays the myriad ways in which employment, resource access, and overall quality of life could change from one region to another. It is that when wealth concentrates in certain geographical sites, a cycle of underachievement results in other places, which continues perpetuating inequality.
Impact on Social Cohesion
The chasm separating riches from poverty adversely affects the social fabric of India. When a large group is made to feel marginalized, social unrests can ensue. Economic division heightens frustration that may spur protests, general dissatisfaction with the political system, and a sense of injustice. In the long run, unrest coming from frustration can threaten social stability, particularly when unchecked disparities start to expand.
Consequently, inequality creates a fertile ground for social polarization. While access to social amenities, like education and healthcare and even the criminal justice system, becomes a privilege of the few rich, the less privileged are left in a vicious circle even to earn a pittance to meet their basic needs. This divide therefore serves to deepen class and caste-based divisions that hinder the progress of society as a whole.
Steps toward Bridging the Divide
Bridging the economic divide in India requires a thorough overhaul of current policies and programs in favor of an equitable distribution of resources. The government of India has initiated certain steps toward this goal by launching the Pradhan Mantri Jan Dhan Yojana opening 45 crore bank accounts for impoverished people and the PMAY or Pradhan Mantri Awas Yojana that seeks to provide housing for millions.
These programs, however, must be expanded, with complementary programs in education, health care, and the creation of jobs. A serious commitment toward achieving inclusive development in which areas that are rural and underdeveloped receive the benefits of economic growth is very much called for. The Digital India initiative, which seeks to empower the masses with technology, can give a fillip in bridging the divide by paving avenues for education, employment, and entrepreneurship for those in remote pockets.
A further strengthening of public distribution systems or cash transfers, as well as the upgrading of social safety nets, will go a long way toward lifting this burden off the economically distressed in India. Simultaneously, the government can work toward strengthening its progressive taxation policies so that the richest 1% pay their share toward welfare schemes that benefit all sections of society.
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