In India, money is making money while the worker is left with a third-- explaining the gaping income inequality in the world’s fastest growing economy
- Of the total income generated in the economy, only a third went to labour. The balance went to capital and the owners of the capital
- The divide is worse with those engaged in farming as its labour received 15.3% of the total income from it
- Household maids and other hands are amongst the worst affected as they recorded the slowest wage growth.
- Private sector corporations are also keeping the wealth amidst the owners, as only 31.2% of its income went in wages.
Of the total income generated in the economy, only a third went to labour. The balance went to capital and the owners of the capital, according to a study between 2011 to 2017 conducted by India Ratings and Research.
This confirms the rising inequality in India, as the fortune of
This could be a contentious issue that Finance Minister Nirmala Sitharaman may keep in her mind ahead of her first Union Budget presentation on July 5, 2019. World over, billionaires like George Soros and Abigail Disney are asking governments to tax them, to bridge the chasm between rich and poor.
While no such distress call has come from 119 Indian billionaires, the Prime Minister Narendra Modi who has spoken of ‘removing poverty’ during the election campaign might have a chance to proceed this month.
Farm hands work towards poverty
The worst affected of this income gulf are the over 144 million people working on farms.
As per the report, the divide is even worse in agriculture as its labour received 15.3% of the total income, while a staggering 84.7% went to owners! Agriculture is one of the largest employers in the country.
The annual average wage of an agricultural worker is ₹21,060 per annum
“This is even lower than the official poverty line. Cultivators are relatively better-off than agricultural labourers, with an average annual income of ₹141,500,” India Ratings said.
Not helping The Help
AdvertisementAlso, it isn’t just landowners and corporations who are taking income away from workers. Households too are contributing to this.
Household maids and other help are amongst the worst affected as they recorded the slowest wage growth. And, their salaries are low to start with.
Homes and other unorganised workers are worse paid, and due to their large numbers affect the widening income gap.
“The plight of wage earners in unorganized and unregistered enterprises, who account for 44.5% of the income in the economy but receive only 26.4% of the total wages, is quite similar to that of agricultural wage earners,” the report said.
Private sector wage growth was the fastest as it grew 16% in the five financial years ending March 2017. But private sector corporations are also keeping the wealth amidst the owners, as only 31.2% of its income went in wages.
AdvertisementInterestingly, this exact percentage at 32% is what public sector kept for owners, while giving 68% to its employees ---proving to be better distributors of their wealth!
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