Causes of Rising Inequality

Source- The Hindu

Syllabus- GS 2 – Social Issues

Synopsis – The COVID-19 pandemic has sharply increased the economic inequality in all countries.


  • The Inequality Virus report released on the opening day of the World Economic Forum’s Davos Agenda.
  • The report states that the COVID pandemic has increased economic inequality in almost every country.

Read Moreinequality in India Oxfam report |ForumIAS Blog

Pandemic impacts on Rich vis-à-vis Poor –

The economic impacts of COVID pandemic are not the same for the rich and poor. The following facts of the Oxfam report provide a glimpse of sharp difference:

  1. 1000 richest people in the world regain their COVID-19 losses within just nine months. But it could take more than a decade for the world’s poorest to recover from the economic impacts of the pandemic.
  2. The increase in income of the top 100 billionaires since the March lockdown is enough to give each of the 138 million poorest Indians a cheque of Rs.94045.
  3. It will take up to 3 years for unskilled labor in India to earn what the richest earned in one second last year.

Some sections are disproportionately affected by the increasing disparities in income and opportunities due to discrimination based on gender, caste, and other variables.

What are the causes behind rising inequality?

Policymakers have accepted inequality as one of the impacts of economic growth.  While they are happy with the reduction in absolute poverty, inequality kept on rising.

The criticism of capitalism has never been taken seriously. Moreover, capitalism has been linked with the existence of democracies.

While the debates ‘the Great Reset’ are ongoing on WEF, states are continuously implementing discriminatory labour policies.

Now, economists are agreed that the divide of new wealth between capital and labour is one-sided.  While the wealthy are getting wealthier, workers are continually being forced into poverty.

Way forward-

The government needs to take specific and concrete action to build a better, more equal future.


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