In­dia at bot­tom of Ox­fam world in­equal­ity in­dex

Financial Chronicle - - PLAN, POLICY - ADITI KHANNA

IN­DIA has been ranked among the bot­tom 11 coun­tries in a new world­wide in­dex on the com­mit­ment of dif­fer­ent na­tions to re­duce in­equal­i­ties in their pop­u­la­tions.

UK-based char­ity Ox­fam In­ter­na­tional’s ‘Com­mit­ment to re­duc­ing in­equal­ity (CRI) in­dex’, re­leased on Tues­day, ranks In­dia 147th among 157 coun­tries an­a­lysed, de­scrib­ing the coun­try’s com­mit­ment to re­duc­ing in­equal­ity as a “a very wor­ry­ing sit­u­a­tion” given that it 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 notes.

“The govern­ment spend­ing on health, ed­u­ca­tion and so­cial pro­tec­tion is woe­fully low and of­ten sub­sidises the pri­vate sec­tor. The civil so­ci­ety has con­sis­tently cam­paigned for in­creased spend­ing,” it adds.

The sec­ond edi­tion of the an­nual in­dex finds that coun­tries such as South Korea, Namibia and Uruguay are tak­ing strong steps to re­duce in­equal­ity. How­ever, coun­tries such as In­dia and Nige­ria “do very badly” over­all, as does the US among rich coun­tries, show­ing what Ox­fam de­scribes as a lack of com­mit­ment to clos­ing the in­equal­ity gap.

In ref­er­ence to In­dia, the in­dex finds that while the tax struc­ture looks rea­son­ably pro­gres­sive on pa­per, in prac­tice much of the pro­gres­sive tax­a­tion, like that on the in­comes of the rich­est, is not col­lected.

In­dia also fares poorly on labour rights and re­spect for women in the work­place, re­flect­ing the fact that the ma­jor­ity of the labour force is em­ployed in the agri­cul­tural and in­for­mal sec­tors, which lack union or­gan­i­sa­tion and en­force­ment of gen­der rights.

The in­dex is based on a new data­base of in­di­ca­tors, now cov­er­ing 157 coun­tries, which mea­sures govern­ment ac­tion on so­cial spend­ing, tax and labour rights – three ar­eas found to be crit­i­cal to re­duc­ing the gap.

The in­dex is topped by Den­mark, based on its high and pro­gres­sive tax­a­tion, high so­cial spend­ing and good pro­tec­tion of work­ers.

“How­ever, re­cent Dan­ish govern­ments have fo­cused on re­vers­ing all three of th­ese to some ex­tent, with a view to lib­er­al­is­ing the econ­omy, and re­cent re­search re­veals that the re­forms of the past 15 years have led to a rapid in­crease in in­equal­ity of nearly 20 per cent be­tween 2005 and 2015,” it warns.

Ja­pan, the top-rank­ing Asian coun­try, came in at 11th on the in­dex. The re­port lauded pres­i­dent Moon Jae-in of South Korea, which came in 56th over­all, for show­ing com­mit­ment to tack­ling in­equal­ity in the coun­try in the past year by rais­ing tax on the rich­est earn­ers, boost­ing spend­ing for the poor and dra­mat­i­cally rais­ing the min­i­mum wage.

It also cited other coun­tries that have taken strong steps to tackle in­equal­ity in the past year. Ethiopia, although at the 131st place, now has the sixth high­est level of ed­u­ca­tion spend­ing in the world.

Chile, at 35th, in­creased its rate of cor­po­ra­tion tax and In­done­sia, at 90th, has in­creased its min­i­mum wage and spend­ing on health, the re­port noted.

The anal­y­sis, by Ox­fam and non-profit re­search group De­vel­op­ment Fi­nance In­ter­na­tional (DFI), rec­om­mends that all coun­tries should de­velop na­tional in­equal­ity ac­tion plans to achieve the UN’s Sus­tain­able De­vel­op­ment Goals (SDGs) on re­duc­ing in­equal­ity.

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