The Vice President of India, Shri M. Hamid Ansari
has said that the inequality is the number one risk because it is associated
with a rise in populism and threatens the cohesiveness of countries. He was
delivering the inaugural address at the First Edition of the Huddle, A
Three-day Conclave organised by The Hindu newspaper, here today. The Governor
of Karnataka, Shri Vajubhai Vala and other dignitaries were present on the
The Vice President said that to enjoy the ‘freedom
of,’ there is a requirement first for certain ‘freedom from’. To survive with
dignity, humans require both ‘freedom from want’ and ‘freedom from fear’, he
The Vice President said that the improving living
standards, in segments, have perhaps masked a dramatic concentration of income
and wealth over the last 30 years. He further said that the Richest 1% in India
owned nearly 60% of the country’s total wealth, with the top 20% commanding
80%. The bottom half of Indians by contrast, collectively own only 2% of the
national wealth, he added.
The Vice President said that rising inequality can
lead to conflict, both at social and at national level and the growing threat
of left extremism, which has been repeatedly acknowledged as the gravest
security threat to Indian state, has its roots in economic deprivation and
inequality in access to resources. He further said that the time has come to
move the development discourse of inequality beyond the current discussion of outcomes
and opportunities. The concepts of justice and fairness are tied to the idea of
equity in development, he added.
The Vice President said that to view rising inequity
as merely an inconvenient truth in the saga of India’s shining future would therefore
be a folly and without equality, there is unlikely to be much of a future, let
alone a shining one. In conclusion, the Vice President raised some
uncomfortable questions about inequity, failure of trickle-down growth,
environmental damage, conflicts, intolerance and improving Investments in
Following is the text of Vice
I was first told about this conclave, an odd thought came to my mind. I
wondered if the theme was a verb or a noun; the definite article however
recall the tablet that was affixed to the pedestal of the Statue of Liberty in
the early years of the last century, and that reads:
me your tired, your poor,
huddled masses yearning to breathe free,
wretched refuge of your teeming shore,
these, the homeless, tempest- tossed, to me:
lift my lamp besides the golden door.
do not propose to dilate on the context of these lines. I do nevertheless wish
to draw the attention of this gathering to the second line: the quest for
freedom by humankind, and to the response patterns we have witnessed in our
in the dictionary meaning of the term, signifies ‘the power to act, speak
and think freely’. It implies unhampered liberty to think freely, to
question anything, to be able to speak frankly, to be free to explore
freedom or liberty in itself would be quite meaningless. To enjoy these ‘freedom
of,’ there is a requirement first for certain ‘freedom from’.
survive with dignity, humans require both ‘freedom from want’ and
‘freedom from fear’. Human development is
understood as the continuing expansion of human freedom and humans flourishing
beyond these freedoms.
our case, the Preamble of the Constitution specifies what ‘We the People of
India’ set out to attain: Justice (social, economic and political); Liberty
(of thought, expression, belief, faith and worship); and the Equality
(of status and of opportunity), and Fraternity (to assure dignity of
individual and unity of the nation).
liberty or freedom is anchored between justice and equality; also Inter-spersed
is a Hegelian construct on appreciation of necessity that circumscribes this
freedom. Furthermore, while equality is the premise of Citizenship, the latter
by itself does not guarantee substantive equality.
advance of the world’s financial and economic elite going to Davos for their
annual meeting, the World Economic Forum publishes its Global Risks Report. The
2017 edition highlights some risks facing the global system and places the
issue of income inequality as the number one risk because it is associated with
a rise in populism and threatens the cohesiveness of countries. It describes
the present as ‘a febrile time for the world.’
earlier annual editions of the Report had similarly identified rising
inequality among the top four global risks. It is therefore not surprising that
reducing inequality is one of the UN Sustainable Development Goals.
still – in this age of ‘post-truths’ and ‘alternate facts’ –
deceptive appearances can be made to prevail.
improving living standards, in segments, have perhaps masked a dramatic
concentration of income and wealth over the last 30 years. A number of studies
have come to the distressing conclusion that despite the increase in the number
of people coming out of abject poverty, the majority of people on the planet
today live in countries where economic disparities are bigger than they were a
generation ago. Please consider the following:
capital gains, the Share of national income going to the richest 1% has
doubled since 1980. Within it, the largest share going to the top 0.01% –
some 16,000 families- who now control almost 5% of the global wealth.
we divide the whole income of the world into two halves, we find that the
richest 8% get half, while the other half would be distributed in the
remaining 92% of the Population.
almost all countries, the mean wealth of the Wealthiest 10% is more than
10 times the median wealth. For the wealthiest 1%, mean wealth exceeds 100
times the median wealth in many countries and can approach 1000 times the
median in the most unequal nations.
developing economies like India and China, despite the fact that incomes have
risen for many, inequality, in both wealth and income have also risen
richest 1% in India owned nearly 60% of the country’s total wealth, with the
top 20% commanding 80%. The bottom half of Indians by contrast, collectively
own only 2% of the national wealth.
is a reversal in sight. Rates may vary, but since the financial crisis of 2007,
inequality has shown more increases than decreases in the world’s nations.
Twentieth century history shows that this can be ominous.
the economists may continue to debate the extent and causes of inequality,
there can be little doubt about its implications for the political, social and
economic fabric of society.
years earlier, Joseph Stiglitz had written about the price of inequality in the
context of the United States. More recently, Kate Pickett and Richard Wilkinson
have describe the “pernicious effects that inequality has on societies and
provide evidence for a strong correlation between higher levels of national
inequality and a wide range of health and social problems.
worryingly, rising inequality is seen as a contributing cause for the rise of
authoritarian leaders, often with a divisive agenda fuelled by sectarianism,
xenophobia and nationalism.
inequality can lead to conflict, both at social and at national level.
Research has shown that in contrast to oligarchic regimes; democracies avoid
serious political turbulence only so long as they ensure that the relative
level of inequality between the rich and the poor does not become excessively
studies, similarly, indicate that social conflicts are indeed likely to break
out in situations where there are large inequalities between different groups.
Some studies have concluded that ethnic groups with incomes much lower than a
country’s average per capita income are more likely to engage in civil war.
protest movements have broken out around the world, many arguably rooted in the
burgeoning inequality. The Occupy Movement and the Arab Spring were both
fuelled by growing public despair at the sharp inequalities and growing
unemployment and the perceived inability of the existing governance structures
to redress the situation.
India, the growing threat of left extremism, which has been repeatedly
acknowledged as the gravest security threat to Indian state, has its roots in
economic deprivation and inequality in access to resources.
has also been recognised that growing social inequality corrodes social cohesion
and can destabilise states. Some recent research has found that the likelihood
of a country remaining mired in poverty or achieving sustainable growth has a
strong relation to the average life expectancy of the citizenry. There, it is
argued, that a shorter average lifespan leaves less time to reap the returns on
investment in Human Capital.
also breeds economic inefficiencies and limits productivity. Research by IMF
has shown that income inequality slows growth, causes Financial Crisis and
weakens demand. In a recent report, the Asian Development Bank has similarly
argued that if emerging Asia’s income distribution had not worsened over the
past 20 years, the region’s rapid growth would have lifted an additional 140
million people out of extreme poverty.
the time has come to move the development discourse of inequality beyond the
current discussion of outcomes and opportunities. A conceptual framework is
provided by Amartya Sen and some others who see human capabilities as the
capacity and freedom to choose and to act; and calls for the opportunities that
give individuals the freedom to pursue a life of their own choosing to be
concepts of justice and fairness are tied to the idea of equity in
development. Equity has an intrinsic value since some groups face consistently
inferior opportunities – economic, social and political – than their fellow
citizens. Specifically, it translates into the need for equal opportunity and
avoidance extreme deprivation in outcomes.
To view rising inequity
as merely an inconvenient truth in the saga of India’s shining future would
therefore be a folly. Without equality, there is unlikely to be much of a
future, let alone a shining one.
There is a need to
revisit our commitment to investing in social goods. We
have to move beyond seeing corporate social activity and government welfare
schemes as merely minimum relief for the misery of the masses aimed mostly at
neutralising the more aggressive antagonism of those who have lost income and
wealth or those whose upward mobility seems permanently blocked.
We need to ask
ourselves some uncomfortable questions:
we ignore the great inequity as merely a by-product of progress?
the trickle-down model of growth failed us?
we paid too high a cost in terms of environmental damage for our material
conflicts and human suffering the new normal? To what extent are they
induced by failed ventures in quest for unrealizable utopias?
we just accept the growing insularity, intolerance and discrimination?
we made sufficient investments in improving our human capital and public
goods, like education and health-care?
with growing global violence, poverty, and injustice, it may be difficult to
retain hope for an equitable future. Yet, if the reality of global inequality
inspires what Antonio Gramsci called “pessimism of the intellect,” work
must nevertheless begin with what he termed “optimism of the will”—the
undaunted commitment that drives radical change.
I have raised
questions. I hope this Huddle will bring forth some answers.