Economic inequality on rise since liberation: Prabhat Patnaik

Renowned economist Prabhat Patnaik speaks on alarming increase in economic inequality & need for universal pension scheme in India.

The benefit of economic growth is not flowing to large sections of the population, and as a result, economic inequality, which had reduced between 1950 and 1980, is showing an alarming increase post-liberalisation, said Prabhat Patnaik, renowned economist and political commentator.

For instance, in 1980, the share of the top 1% of the population in national income was 6%, and today it is 22%, he said while speaking at a State-level seminar on Universal Pension Scheme organised by a group of workers’ unions here on Saturday.

“India does not have a social security scheme. The country should have right-based securities such as right to old age pension, right to education, right to employment and right to health. These are possible when the country’s GDP is 7%,’‘ the economist said. Mr. Patnaik said the unions’ demand for an old age pension of ₹3,000 per month was truly justified and the government could easily raise resources required through additional taxes and levies.

“Required resources can be raised through levying two taxes on the top 1% of the population. These taxes could be a wealth tax and a 33% inheritance tax. Inheritance tax is around 40% in Japan, the U.S, and in other developed countries,’‘ he noted.

He was also of the opinion that if a large number of poor and deserving senior citizens received a ₹3,000 pension per month, these ordinary people would spend this money in the market, and this, in turn, would trigger economic growth in the country.

Later speaking on the occasion, Amanulla Khan, former President, All India Insurance Employees Association, said only 1.3 crore people are currently receiving government pensions, while the vast majority of the elderly have no social security cover. “What often we see is the government trying to pitch unorganised workers against the organised workers to promote its own agenda and carry out its policies,’‘ he commented. Indian society was the most unequal society in the entire world; the country recently overtook the U.S on this front, according to him.

Pension for all should be made a national agenda of the Union government, and the general election manifesto for all political parties in the country should also press for pension for all, insisted several workers union representatives who spoke at the seminar.