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Opinion: Challenging India's increasing inequality - NewsOxa | Economics and Financial Markets
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Opinion: Challenging India’s increasing inequality


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India is a country I visit frequently; I long ago fell for its charm, its rich culture and the warmth of its people. Now, there is a vibrancy to its economy to match its undeniable spirit. It is one of the fastest growing in the world with a GDP growth of 7.8 percent (The Economist, 2018) that, in spite of some slowing down, is projected to overtake both the UK and French economies in 2018 and become the fifth largest economy in the world. Latest estimates from the World Economic Forum in Davos indicate that India’s contribution to global growth will reach 8.6 percent by 2019, placing it third after China and the USA.

This economic leap has been the result of a programme of fundamental reform, and although the results have been mixed, both the stock market and foreign investment have boomed and the current account deficit reduced. Progress has been made in infrastructure, higher education, technological readiness and improvements in ICT indicators.

All seems wonderful – but unfortunately it’s not. India bears the weight of deep-rooted social problems that need to be addressed if it wants to harness its economic potential.

The poverty trap

Poverty is one of its biggest issues. India is still one of the poorest countries in the world with income inequality rising over the past 35 years. A GDP per head of $1,970 (The Economist, 2018) is among the lowest in the world and equates to close to the international poverty line of $1.90 per day, while 58 percent of the total population is living on less than $3.10 per day (World Bank, 2014).

Causes of poverty can be found in a high population growth rate, low literacy levels, the absence of good state education, poor healthcare facilities, lack of access to financial resources, prevalence of a caste system, and unequal distribution of income and resources. With economic liberalisation, income inequality continues to rise, as the richest one percent retains 73 percent of India’s total wealth – up from 58 percent in 2017 (Oxfam India Inequality Report, 2018).

Youth unemployment

India has the world’s largest youth population. The latest 2011 census indicated that around 41 percent of India’s population is below the age of 20 and more than 65 percent below the age of 35. According to the OECD Economic Survey 2017, more than 30 percent of Indians between 15 and 29 are not in any form of education, employment or training. India’s economy is still not securing enough jobs to employ the almost one million people who want to enter the job market every month.

Despite an improving economy, the country is failing to create opportunities for a workforce with the wrong skills. The government established a Skill India project to improve skills for 500 million people by 2022. In two years it succeeded in training 11.7 million people, although it modified its strategy from “supply driven to demand driven.”

Gender inequality

And where are the women of India? The World Economic Forum’s Global Gender Gap Report 2017 places India in 108th place out of 144 countries, slipping from 87th in 2016. Socio-cultural norms that favour boys over girls, patriarchal values that inhibit women’s mobility, and gender stereotypes that prevent women from joining the labour market all reinforce gender discrepancies.

India now has the second-lowest rate of female labour-force participation in South Asia after Pakistan. Instead of opportunities being created by the growing economy, women’s employment in India is going into reverse; in 2017, female labour force participation (15+) reached 27 percent (2017) dropping from 35 percent over the last two decades (ILO 2017). Women’s employment may even be undercounted as the proportion of unpaid work per day for women stands at 65.6 percent compared to 11.75 percent for men.

Additionally, “gender gaps in the labour market extend to differences in remuneration across all levels of occupations and sectors”. Female estimated earned income is $2,424 while for males it’s $10,428. Women form 60 percent of the lowest paid wage labour, but only 15 percent of the highest (ILO Global Wage Report, 2016-17).

Women are also more likely to be in vulnerable employment, clustered in specific industries and occupations such as sales, basic services, handicraft manufacturing and agriculture. The higher skilled share of labour force is controlled by men at 8.1 percent to women’s 1.8 percent. The glass ceiling prevents women from obtaining upper-level positions such as legislators, senior officials and managers.

At present, women contribute 17 percent to the country’s GDP, well below the global average of 37 percent.

The opportunity

According to the International Labour Organisation(ILO)Report (2017), closing the gender gap in jobs by 2025 can add $1tr to India’s economy. If India is to become an emerging superpower, it must overcome many of its economic/social challenges.

Women are a huge and valuable resource with a vital role to play in their country’s economy. Empowering women with knowledge and skills enables them to reach their full potential and increase their participation in the labour market. Investing in female education, opening up opportunities and creating business conditions to facilitate women’s entrepreneurship will boost India’s social and economic development, enhance gender equality and alleviate poverty.

However, gender equality in the workplace cannot be achieved without equality in society, and effective mechanisms are needed to tackle female social stigma and enlighten people about the vital role of women.

A huge number of girls and women are still subject to physical, sexual and psychological abuse inside and outside their homes, cutting across lines of class and income. Violence is the most extreme form of gender discrimination and an obstacle to the achievement of gender equality and development. Threats and acts of violence against women must be denounced and existing legislation must be implemented to international standards and enforced.

Women have always played an important role in Indian history, and in modern times, Indira Gandhi ruled India as its prime minister for a total of 15 years, and Pratibha Patil became the country’s first female president (2007-12). I have met in India highly educated, qualified and powerful women and was impressed by their achievements and determination to break gender stereotypes and bring positive change to society. I am sure that very soon, with education and empowerment, women will be the ones to make India shine again!

Dr Mona S AlMunajjed, sociologist, author and advisor on gender issues. (mona.almunajjed@gmail.com)


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