WIDENING GAP BETWEEN INDIA’S RICH AND POOR STATES

Countries find it easier to become rich when their neighbors are already rich. The growth
model of East Asia has been equated with geese for decades, from Japan at the top to
latecomers like Myanmar in the background. In large countries the same pattern is often
observed. For example, in the past decade, China's poorest provinces have grown faster than
the richer ones. India is different. Far from falling apart, their states become increasingly
unequal. A renewed change in the tax system could aggravate the situation.
Inequality is a problem that Indians are always afraid of. We do not want to accept that here
economic reforms have expanded the area. While the definition of poverty, in the absence of
a singular measure, is rather amorphous, the inequalities due to the lack of data are even more
nebulous.
Although the practical observations show that the billionaires living in villas have little hope
from the poor, the official argument is that even the poor have cell phones that show that
there has been progress and inequalities have diminished.
The World Inequality Report 2018 provided data on inequality in different countries, which
makes the reading interesting. In addition to simple measures to eliminate inequality,
benchmarks can be used in different countries to understand India's position. Striking is the
inequality that usually exists around the world, where the rich have become relatively richer
over the past three decades than other groups. India seems a bit more biased in this regard.
From this data, two conclusions can be drawn. First, the degree of inequality in the country is
very high and cannot be denied. Second, the benefits of growth in favor of the rich were
highly biased. How did this happen?
The growth model follows since reforms have been geared to the productive sectors, with
liberalization involving less public and more private companies. This was the growth path
that had been taken, which is why the benefits of allowing the private sector room for
expansion were expected to have a downward impact on employment prospects and growth.
Life.
This did not happen according to the scenario, and the benefits benefited the higher levels. In
fact, this limited growth syndrome acts as a useful social buffer because it creates the illusion
of upward mobility, even though the pace is much slower than that of the upper levels. It is
therefore not surprising that 90% of the population accounts for only one third of the growth
recorded in the period 1980-2016.
The reforms focused on denationalization. Privatization meant that even public companies
belonged to private actors, which opened the process of increasing inequality. Governments
have been reluctant to subsidize and the elite are against subsidies. As a result, even
government activities tended toward road construction and urban development projects. It is
ironic because we wanted the government to cease all productive activities during
privatization.
Greater inequality hinders the creation of demand. Economic growth is sustainable as long as
the poor can also scale up the hierarchy and spend on goods and services. If these incomes do
not rise, the demand cycle is interrupted.
Therefore, it is important to keep your income at a reasonable level. The problem of lack of
demand today is due to inequality. The rich clash with a "demand saturation" cliff where
motor vehicles can not be changed every year or houses are bought at regular intervals. Other
income groups must also spend. If they do not have these funds, as has been the case over the
past three years, they tend to spend more on basic needs than on growth-sensitive consumer
goods.
India is pleased with a growing number of millionaires, whether from their own production or
from ancestors. In addition, as Piketty pointed out, some parts of the corporate world have
tended to add excessive rewards to the money cycle, involving huge stock options, without
leading to liability.
The fight against inequalities and the closing of the gap between citizens is, ironically, a
necessity for the economy to go further. In Western countries, the high wealth of citizens was
one of the reasons for the expansion of overseas markets. We have a large population that
needs to scale the ladder, otherwise we will continue to see wave growth rather than linear.
The gap between rich and poor is a big problem in India. It is on the list of the top priorities
of most major political parties in the country. Even now it is on the agenda. Unfortunately,
little progress has been made in this regard, although the government and some NGOs that
are actively involved in the activities are indeed very good at advancing the status of the
poor. In the economy, the term poor is the person with the lowest purchasing power and the
term rich is the person with the highest purchasing power. A person with less purchasing
power is deeply affected because they can not afford to buy goods and services that the rich
can afford, and they can safely say that otherwise they can not change their style of living and
living standards. The gap between rich and poor can take various forms. Some areas that fill
the gap are education, income, lifestyle, housing needs and food needs.
The only problem with money is that even the Indian government spends so much money on
the poor, and there are schemes like the Workplace Guarantee Program that give them the
guarantee of having 100 working days with them. best salaries available. Rice and other low
cost products for people living below the poverty line. So money is not the problem, and even
the policies it envisages will not be enough to solve this problem permanently. What is
missing is the motivation of the disadvantaged classes. People of the lower class are not
motivated. They are unable to maintain the motivation seal because they have not set a clear
target for their goal because they believe their financial situation is biased. Unless we
motivate people and provide them with all the basic facilities, it will be impossible to
eliminate this problem from society.The above description shows that most poor areas lag
behind. The government has long ignored the poor, but their demand is not the answer,
because poverty is affecting not only the poor, but also the country. Poverty is one of the
biggest obstacles to the Indian economy