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There are many reasons attributed to this unequal distribution of income and resources in India.
Poor policies by the government top the list of why there is high inequality in income
distribution in India. In the past decade, the government has reduced spending on important
sectors such as agriculture, health and education. The government has thus neglected these areas
and caused disparities between the levels of poverty in different regions in the country.
The government of India has been accused of concentrating on capital intensive industries such
as finance, insurance and real estate industries and hence created gaps in levels of income in
different industries. These capital intensive industries usually require employees who are more
skilled as compared to the labor intensive industries. This neglect has contributed largely towards
the disparities in income and earnings amongst skilled and unskilled laborers who make up
majority of Indias populace.
The high levels of corruption in India have also been blamed for the huge gap between the rich
and the poor. Even though in some instances, the government has set aside money for projects
for the poor, corruption is a huge barrier to the access of these funds. The people in charge of
steering such projects often consume more than half of it before it gets to the poorer regions.
Poor infrastructure has widened the gap between the rich and the poor. Most companies and
schools as well as essential social amenities have been located in areas with good infrastructure.
The poor regions have remained dilapidated.
Effects of income inequality in India
These income disparities have had many socio-economic impacts on Indias population. It is
estimated that 300 million Indians live in abject poverty. This is the largest number in the world
and is one of the major impacts of income inequalities in the country. India also has the highest
number of homeless people.
Additionally, the gap between the rich and the poor has created Club States with Gujarat,
Punjab and other rich states forming the richest clubs, whilst Madhya Pradesh, Orissa, Bihar and
other such states being left behind in terms of development.
Access to social amenities such as decent shelter, clean water, nutrition and food as well as
healthcare and education has become difficult for the poor in India. The situation is the exact
opposite in the rich regions. Healthcare access has worsened amongst the poor with high
maternal and infant mortality rates being experienced in the poorer regions.
The list above on causes and effects of income inequality in India is inexhaustible. With
changing conditions we cant say things will remain as they are but those are some of the major
reasons for the inequality in income distribution in the Asia subcontinent.
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References
http://blogs.lse.ac.uk/indiaatlse/2013/03/27/why-inequality-in-india-is-on-the-rise/
http://www.newindianexpress.com/columns/Reverse-EconomicInequality/2014/03/06/article2092672.ece
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