Inequality in the ownership pattern of resources is one of the major causes of poverty. Discuss in the context of ‘paradox of poverty’.

Phases of economic development in India

• 1950s-60s : establishing fundamentals of economy
  • ↓
• 1970s-80s : low growth; high inflation; no increase in inequality
  • ↓
• 1990s-2000s : high growth; jobless growth; rapid rise in inequality
  • ↓
• Last 2 decades : focus on sustainable and INCLUSIVE GROWTH.

Arguments of high growth coinciding with rising inequality period

1. 1990s was a period of jobless growth.
2. Rising rural-urban divide in face of urbanisation.
3. In market economy (post 1991 reform), money begets money.
4. Green revolution - high rate of agri-growth but increasing regional disparity.
5. Obsession with growth in GDP, at the cost of larger idea of development.

Counter-view

(1) Economic Survey 2020-21 opines that given Kuznets curve, the focus should be on poverty alleviation and not inequality. (2) Economic Survey 2018's idea of precarious growth model.

Measures taken to address issue of inclusive growth

(1) The JAM trinity as enabling framework for leakage-free delivery of "products of good governance" like food rations using technological solutions. (2) PM Ayushman Bharat for healthcare for all. (3) MGNREGA for unemployment shock-absorber. (4) Mid Day Meal Scheme to provide nutritional basic requirements. (5) Right to Education to ensure that minimum equality of opportunity is ensured.

Further Steps worth considering

(1) Universal Basic Income (UBI) to ensure decent standard of living (eg. the Daron Acemoglu model). (2) A "super-rich tax" (as is becoming increasingly popular in USA). (3) Subsidising further higher education for the marginalised section.