Time for India to Reduce Inequality

Inequality is relative, depending on how it is measured. Most countries tend to have greater inequality in terms of income rather than consumption – because the citizens of any one country must eat and buy basic necessities, while the wealthy tend to save more. Citizens with more education may have less wealth, yet can better weather economic changes that may eliminate specific jobs. India, largely because of its traditional caste system, has social inequality. Social diversity combined with economic inequality tend to make long-term reform more challenging, argues economist Pranab Bardhan, with governments tending to rely on short-term handouts and subsidies to solve problems. Economic reform in India – as well as other nations – tends to focus on fiscal and trade policy and financial markets. Corporate success is only one small part of any economy, and citizens would embrace long-term reform that focuses on social and infrastructure services, along with transparency and accountability. – YaleGlobal