India is one of the most unequal countries in the world. Even worse, 25% of the poorest people in the world are Indians.
What can we do about this?
The two common tools used to address this problem are increasing incomes & re-distributing wealth. More & better-paying jobs increase incomes. Government schemes & taxes are used to re-distribute wealth. But the experience of the last few decades is these tools are of little help. The worrying fact is that income inequality is widening.
Its more critical for India to consider bold & innovative solutions, as we have a bigger problem to solve. It’s quite possible that, by following the well-trodden path, we might aggravate the problem.
When faced with a difficult problem, ‘Invert, always invert’ – a maxim made popular by the German Mathematician Jacob Jacobi.
Why not moderate the demand for goods & services, instead of just increasing incomes? Of course, we need to grow and growth is fueled by desire for goods, services & wealth. But we don’t have to grow like the west. We don’t need to pursue massive consumption-led growth which is typically accompanied by equally massive environmental destruction, chaos of urban migration, social upheaval, crime etc. We have not been successful in self-regulation to strike a balance. The consumption-led growth model we pursue today relies on Indians buying & consuming more and more. To sustain & increase the current 7% growth, we need to buy more cars, eat out more, holiday more, work more, earn more. More industries will be setup. More jobs will be created. More people will migrate to urban centers. More people will earn more and consume more. And this is exactly what the west did over the last few decades.
Higher incomes & GDP don’t automatically translate to a more equal society. Singapore, Japan, Sweden or Netherlands are exceptions, and even they are facing challenges today. Human greed & our incapability to regulate ourselves will ensure the problem of inequality aggravates. Further, pursuing this high-growth & high-consumption path in a hugely populated country like ours can be a massive political gamble & administrative nightmare. Even merely satisfactory results may take decades. Provided, of course, the associated problems of a consumption-led growth like environmental disasters & social upheavals don’t wreck havoc.
Can we invert our thinking?
- Why can’t we opt for a slower growth with moderate consumption?
- Why can’t we name & shame people who over-consume?
- Why can’t we have a high consumption tax to act as a deterrent?
- Why can’t we distribute growth & development evenly across the country, and avoid potentially unmanageable urban migration & chaos?
- Why can’t we celebrate all professions & vocations equitably?
- Why can’t we slow down and relish life?
Rather than just increasing incomes & re-distributing wealth, its time we figure out a different way to grow & reduce inequality.
We need a uniquely Indian approach to solve the biggest problem we face.
The western approach has been tried & tested, and it has failed.