According to a World Bank report, between 1990 and 2013, worldwide the number of people in extreme poverty fell by nearly 1.1 billion. In India, 133 million people were lifted out of poverty between 1994 and 2012. The reduction in the poverty levels is a propitious sign, but the worry is the growing income inequality.

According to World Inequality Report, 2018 the share in national income of India?s top 10% was around 56%. Globally, since 1980, richest 1% captured twice as much as poorest 50% of the world population.

Similarly, Oxfam Survey reported that India?s richest 1% garnered as much as 73% of the total wealth generated in the country in 2017.

Causes of rising inequality

1. Highly unequal asset distribution and flawed laws of inheritance.
2. Asymmetric quality education and employment opportunities.
3. Tax evasion, corruption and regressive taxes (e.g. high indirect taxes in India)..
4. Market monopoly by some large firms.
5. Gender inequality in wages.

Consequences of Inequality

• Citizens can lose confidence in institutions, eroding social cohesion and confidence in the future.
• High income inequality reduces incentives for quality work, affecting economic growth.
• Unequal societies have higher crime rates. Reasons may include resentment and hostility amongst the disadvantaged members of the society, competition over scarce jobs or resources, reduced law enforcement spending in low-income areas.
• The low income household can?t afford high cost healthcare which results from low paid menial work.
• In an economically unequal society, the society-wide average level of education decreases while the number of educational elites increases.
•  There is a strong relationship between high levels of income inequality and low levels of social mobility, resulting in social stratification.
• When wealth distribution becomes concentrated in a small number of hands, political power tends to become skewed in favor of that small wealthy group.
• Inequality breeds poverty, which in turn leads to issues such as poor sanitation and hygiene, indoor air pollution in poor households.
•  Isolation of poor slum dwellers and their ghettoisation. It further creates difficulties in assimilating and mainstreaming them in the society.

Way Forward
These consequences show that rising inequality needs to be tackled on war footing.

• Successful models from different countries may be adopted. For example, in South Korea, companies have taken upon themselves in providing skills and their upgradation.
• Extend quality education to all, associated with quality employment generation.
• Provide quality healthcare facilities, to ensure healthy workers.
• Ensure effective delivery of basic amenities associated with adequate social security.

It is imperative that an all inclusive growth approach be followed which doesn?t rely solely on trickle-down effect but includes redistributive justice principles of John Rawls, Gandhian trusteeship principles and a hybrid of Amartya Sen?s capability approach with Bhagwati?s growth led model.