by Elton Gomes
India occupied a dismal 147th position out of 157 countries in terms of its commitment to reducing inequality, a report said on Tuesday.
According to the Commitment to Reducing Inequality Index developed by Oxfam and Development Finance International, Nigeria, Singapore, India, and Argentina are among a group of governments that are fuelling inequality.
The Oxfam inequality index ranks 157 countries based on their policies on social spending, tax, and labour rights. According to the report, countries such as South Korea, Namibia, and Uruguay have made commendable efforts towards reducing inequality. However, India and Nigeria fared poorly. The index noted that USA displayed a lack of commitment towards closing the inequality gap.
What does the index say about India
Oxfam’s inequality index ranks India 147th among 157 countries analysed, and it described the country’s commitment to reducing inequality as “a very worrying situation” given that it Indian is home to 1.3 billion people, many of whom live in extreme poverty.
“Oxfam has calculated that if India were to reduce inequality by a third, more than 170 million people would no longer be poor,” the index noted. “Government spending on health, education and social protection is woefully low and often subsidises the private sector. Civil society has consistently campaigned for increased spending,” it said further, PTI reported.
The index further said that although India’s tax structure looks progressive on paper, it seems like progressive taxation on the incomes of the rich is not conducted.
India also performed poorly in terms of respect for women at the workplace. This reflects the fact that majority of the labour force is employed in the agricultural and informal sectors, which are devoid of unions and gender rights.
Which countries are taking strong steps to reduce inequality
Oxfam’s inequality index found out that countries such as South Korea, Namibia, and Uruguay took strong steps towards reducing inequality.
Denmark topped the index, due to its high and progressive taxation, high social spending, and effective protection of workers. Other countries in the top ten include Germany (2nd), Finland (3rd), Austria (4th), Norway (5th), Belgium (6th), Sweden (7th), France (8th), Iceland (9th), and Luxembourg (10th).
The report lauded South Korean President Moon Jae-in for displaying commitment in tackling inequality in the country by raising tax on the richest earners, boosting spending for the poor, and dramatically raising the minimum wage. South Korea finished at 56th position overall.
The report also took note of other countries that made substantial efforts in reducing inequality – an example being Ethiopia. Although Ethiopia was ranked 131st overall, it now has the sixth highest level of education spending in the world.
Among the emerging economies, China was ranked 81st, Brazil 39th, and Russia 50th. In terms of China, the report said it “spends more than twice as much of its budget on health than India, and almost four times as much on welfare spending, showing a much greater commitment to tackle the gap between rich and poor”, as per a PTI report.
How can India tackle inequality
India can tackle inequality by investing in women. The presence of women is necessary and urgent today to reduce inequality and increase India’s gross domestic product (GDP). Helping women stay active in the workplace while raising a family is important while achieving a growth in the GDP.
In addition, inequality in India can be reduced by introducing reforms in workers’ laws. Minimum wages and universal basic income are two popular ways through which workplace laws can be reformed. Both measures have the same aim — raising incomes of the least fortunate to reduce the income gap, and they could significantly help India in closing the inequality gap.
Elton Gomes is a staff writer at Qrius