Inspire of the economy
growth in India, it is not able to reduce the growing inequalities of the
Indian society.
1.
Economic inequality is a
hindrance to the process of growth & development in India.
2.
Domestic & foreign
investments are not directed to backward regions of the country. This is
because our development strategies failed to reduce the extent of regional
& sectoral inequalities
3.
In India there are four
forms of inequalities. They are
·
Inequality of income
·
Inequality of consumption
expenditure.
·
Inequality of asset
holding.
·
Regional inequality.
4.
Inequality of income &
distribution of wealth refers to a situation in which small section of society
share large part of nation’s income whereas large sections of society are
devoid of income.
5.
Inequality in consumption
expenditure refers to a situation in which a large percentage of total
consumption expenditure is incurred by a small percentage of population. This
shows that a large percentage of kottom population has to struggle to survive,
whereas a small percentage of top population enjoys lavish lifestyle.
6.
Regional inequality refers
to inequality of growth process across various states in the country &
different regions with in a single state some states or regions are as more
prosperous than the others.
7.
In India inequality of
income is calculated based on the data on consumption distribution (provided by
NSSO) income tax data.
8.
To examine the
distribution of income in India, a committee was appointed by the government
under the chairmanship of prof.P.C.Mahalahobis. The committee submitted the
report in 1964.
9.
Besides this committee,
National Council of Applied Economic Research (NCAER), Reserve Bank of India,
World Bank & Many economists have undertaken research studies. Relating to
distribution of income.
10. Lorentz
curve is used to determine the inequality/equality higher Lorentz ratio or Gini
coefficient points to a great degree of inequality.
11. Causes
of inequality of income & wealth in India.
12. Inequality
in the ownership of assets.
13. Laws
of inheritance.
14. Cost
of professional training.
15. Inflation.
16. Unemployment
17. Tax
evasion
18. Corruption
& Smuggling
19. Great
Burden of indirect taxation or regressive tax structure.
Different measures taken
by the government to reduce inequalities are.
·
These have been introduced
to remove inequality in the ownership of land.
·
Land in excess of the
ceiling limit has been distributed among the tenant farmers, & among the
small & Marginal holders.
·
Government pursued a
policy of assigning a flagship-sole to the public sector.
·
Many commercial banks were
nationalised to 1966-68.
·
However, since 1991, there
has been reversal of the government policy.
·
Privatisation has become
the centre stage of growth-strategy. This is because public sector has only
yielded inefficiency & bankruptcy.
·
The Government is
providing support to develop small scale industry like MUDRA etc.
·
Monopolies &
restrictive trade practices Act, 1969 was passed to put a check on
concentration of economic process.
·
Government should to frame
poverty alleviate programmes particularly those which provide gainful
employment to the economically weaker section of the society.
·
Pricing & distribution
policies must be designed by the government to reduce the inequalities present
in the society. It should provide the basic amenities at lower price to the
weaker section of the society.
·
Measures taken to balance
the regional disparities.
·
Great share of central
pool of funds should to allocate to backward states.
·
Provision of grant in aid
by the central Government to the backward states.
·
Propagation use of
improved dry farming technology.
·
Launching of special area
programmes like desert development programme, drought prone area programme etc.
·
In order to develop hills
areas tribal areas drought prone areas, specific plan schemes have been
designed with full cultural assistance.
·
Income tax concession
scheme introduced in April 1974, & it was to be availed by an industrial
unit for a period of 10 years.
·
Tax holiday:
In order to give stimulus to new industries in backward regions, the 1993-94 budgets
introduced a system of tax holiday for new industrial units located in backward
regions i.e. in all states in the North eastern region, Jammu & Kashmir
etc.
·
Central Investment subsidy
scheme was introduced in 1970 which made provision for outright subsidy at the
flat rate of 10% subject to a maximum limit of Rs.5 lakh of fixed capital
investment like land, factory buildings, plant & machinery, Latu this rate
was raised to 15% & then to 25%.
·
Transport subsidy scheme
was introduced in July 1971, for those industrial units established in hilly,
inaccessible & remote areas of the country.
·
Establishment of Regional
Rural Development Bank (RRDB) for the North-Eastern region.
·
In order to attract
private sector investment in backward region the state Government has also been
offering incentives in different forms.
·
These incentives include
providing developed plots, with electricity & water connection on a no
profit no loss basis exemption from payments of water charges, sales tax,
interest free loans, exemption from payment of property taxes for initial
years, establishing industrial estates for setting up small industries etc.
·
Institutions that provide
concessional finance for setting up industrial project in the backward areas
are
·
Industrial Development
Bank of India (IDBI)
·
Industrial Finance
Corporation of India (IFCI)
·
Industrial Credit &
Investment Corporation of India (ICICI)
Economic growth with
social justice has been one of the most important objectives of the planning
commission B from the fifth five year plan.
·
Growth must be inclusive
of all segments of the society rather than exclusive of larger sections of the
society.
·
Keeping in mind the goal
of social equality, planning commission of India adopted different strategies
during different five year plans to achieve this goal.