Hindu Editorial Analysis : 30-October-2023

The rapid evolution of digital technologies, unchecked globalization, and escalating inequality have significantly impacted our political and economic systems, leading to widespread socio-political unrest. In this essay, we will delve into the data depicting rising global inequality, particularly focusing on India, and explore the implications of economic disparities on democracy. Furthermore, we will discuss potential solutions to mitigate this issue, emphasizing rightful policies, redefining wealth, embracing Universal Basic Income (UBI), adopting a multipronged strategy, and utilizing digital tools.

Rising Inequality: A Global Perspective
  • Historical Trends:
    • Economic inequality increased steadily between 1820 and 1910 globally.
    • Fluctuations in inequality post-1910, influenced by varying research methods.
    • The wealthiest 1% gained 38% of global wealth increase (1995-2021), while the bottom 50% gained only 2%.
  • India’s Alarming Wealth Gap:
    • Indian billionaires increased from 102 to 142 amidst the pandemic.
    • India ranks third in the world in the number of billionaires, surpassing France, Sweden, and Switzerland combined.
    • Collective wealth of India’s top 100 richest individuals reached Rs 57.3 lakh crore in 2021, contrasting sharply with the meager 6% share of the bottom 50% of the population.
Economic Inequality Challenging Democracy
  • Globalization’s Impact:
    • Globalization allows powerful nations to influence distant populations’ well-being.
    • Concentrated decisions of wealthy countries affect citizens worldwide, eroding global democracy.
  • Concentration of Wealth:
    • Extreme wealth translates into political power, undermining democratic principles.
    • Big Tech magnates wield disproportionate influence, shaping public discourse and political narratives.
Suggestions to Reduce Economic Inequality
  • Rightful Policies:
    • Thoughtfully designed policies, combining moral intentions and practicality, are crucial.
    • Ill-conceived interventions may backfire, reinforcing skepticism towards government interventions.
  • Redefining ‘Relative’ Rich:
    • Implement significant taxes on the rich without affecting their relative standings.
    • Taxation policies should maintain billionaires’ incentives to increase earnings.
  • Embracing Universal Basic Income (UBI):
    • UBI ensures unconditional income for all citizens, irrespective of other income sources.
    • Redistributes wealth, placing everyone on the state’s payroll, addressing economic disparities directly.
  • Multipronged Strategy:
    • Government initiatives to reduce income gaps should focus on job creation, higher wages, and improved education and healthcare.
    • Enhancing work opportunities for women, boosting agriculture, and implementing gender budgeting are vital steps.
  • Utilizing Digital Tools:
    • Digital tools enhance tax collection efficiency and transparency, boosting domestic revenue.
    • Reducing corruption in the system enhances trust in government institutions.
Why In News

The rapid advance of digital technologies, unchecked globalization, and rising inequality have transformed our political and economic systems, fueling socio-political unrest; amidst these challenges, there is a growing urgency for global collaboration and innovative solutions to address the root causes of these issues and foster a more equitable and stable future for all.

MCQs about Economic Inequality

  1. What is the primary focus of the essay “Addressing Global Economic Inequality: Challenges, Implications, and Solutions”?
    A. Climate Change Solutions
    B. Healthcare Reforms
    C. Economic Disparities and Solutions
    D. Historical Events
    Correct Answer: C. Economic Disparities and Solutions
    Explanation: The rising global economic inequality, its implications on democracy, and suggests various solutions to address the issue.
  2. According to the essay, which country ranks third in the world in the number of billionaires?
    A. France
    B. India
    C. China
    D. United States
    Correct Answer: B. India
    Explanation: India ranks third globally in the number of billionaires, surpassing France, Sweden, and Switzerland combined.
  3. What is Universal Basic Income (UBI) ?
    A. Conditional income granted to specific groups
    B. Income granted to all citizens without any means test or work requirement
    C. A tax imposed on the wealthy
    D. A form of corporate subsidy
    Correct Answer: B. Income granted to all citizens without any means test or work requirement
    Explanation: UBI as an unconditional income granted to all citizens on an individual basis.
  4. How do digital tools contribute to reducing economic inequality?
    A. Enhancing tax collection efficiency and transparency
    B. Increasing political power concentration
    C. Expanding income disparities
    D. Encouraging corruption
    Correct Answer: A. Enhancing tax collection efficiency and transparency
    Explanation: The utilizing digital tools can boost domestic revenue by improving tax collection efficiency and transparency, thus reducing economic inequality.

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