Why Caste Should Inform Debates on Inequality in the Country

Why in News?

• A recent working paper from the World Inequality Lab has rekindled discussions on the persistent and widening gap between the rich and poor globally.
• Utilising metrics such as the Gini coefficient and percentile ratios, an examination of consumption inequality for the years 2017-18 and 2022-23 reveals critical insights into the socioeconomic landscape of India.
• Therefore, it is important to study and focus on the disparities among different social groups, namely the Scheduled Tribes (ST), Scheduled Castes (SC), Other Backward Classes (OBC), and the General category.

An Analysis of Consumption Patterns, Caste Disparities and Changes in Gini Coefficient

• Consumption Patterns, Caste Disparities
  • In 2022-23, the STs, accounting for 9% of the population, had a consumption share of only 7%. SCs, comprising 20% of the population, held a 16% consumption share.
  • OBCs, representing 43% of the population, had a consumption share of 41%, indicating a more conservative consumption pattern within this group.
  • Conversely, the General category, despite constituting 28% of the population, commanded a consumption share of 36%.
  • These figures highlight persistent disparities in consumption distribution across various social groups, with SCs and STs consistently lagging the General and OBC categories.
• Changes in the Gini Coefficient
  • The overall Gini coefficient, a measure of income inequality, decreased from 0.359 in 2017-18 to 0.309 in 2022-23, signifying a reduction in income inequality by 0.050.
  • Among the STs, the Gini coefficient fell from 0.322 to 0.268, a 0.054-point drop, indicating improved equitable consumption distribution within this community.
  • The SC category saw a decrease from 0.312 to 0.273, while the OBC category's Gini coefficient declined from 0.336 to 0.288, a 0.048-point decrease.
  • The General category experienced the most significant reduction, from 0.379 to 0.306, amounting to a 0.073-point drop.
  • This substantial decrease may reflect various socioeconomic changes, including social mobility and effective policy interventions.

Persistent Economic Disparities

• Consumption Inequality Among Different Deciles
  • An examination of the consumption levels among the bottom 20% decile of various social groups from 2017-18 to 2022-23 reveals marginal decreases for the ST, SC, and OBC
  • This slight decline indicates that these communities have not experienced significant improvements in their economic conditions despite broader economic growth.
  • For the ST and SC communities, this trend is particularly concerning as it underscores their continued vulnerability and marginalisation within the Indian economy.
  • In stark contrast, the General category witnessed a more pronounced decline in consumption levels among its poorest segment.
  • This indicates that while there might be a general reduction in inequality, the poorest individuals within the General category are experiencing relative economic declines.
  • This could be due to several factors, including the lack of targeted welfare schemes that effectively reach the most disadvantaged in this group, or broader economic policies that disproportionately benefit the already affluent.
• Disproportionate Wealth Accumulation
  • Conversely, consumption patterns among the top 20% decile of all social groups show slight increases, with the General category experiencing a significant 10-percentage-point surge.
  • This substantial rise among the wealthiest segment of the General category suggests a concentration of wealth and resources among high-caste elites.
  • Such a trend implies that economic gains in the country are not evenly distributed but are instead disproportionately accruing to those already at the top of the socioeconomic hierarchy.
  • The substantial increase in consumption among the top decile of the General category highlights the potential for wealth accumulation and the perpetuation of economic advantages within this group.
  • This phenomenon can be attributed to several factors, including access to better educational and employment opportunities, social networks that facilitate economic advancement, and policies that, while ostensibly universal, effectively favour those with existing advantages.
• Caste-Based Economic Exclusion
  • The economic exclusion of the ST and SC communities is further evidenced by their lower consumption shares relative to their population proportions.
  • Despite constituting 9% of the population, the STs account for only 7% of total consumption.
  • Similarly, the SCs, making up 20% of the population, have a consumption share of just 16%.
  • This discrepancy is indicative of systemic barriers that limit the economic opportunities available to these groups.
  • Factors such as limited access to quality education, employment discrimination, and geographical marginalisation (many ST communities reside in remote, less developed areas) contribute to these ongoing disparities.
• Intergenerational Transmission of Inequality
  • The persistence of these disparities also highlights the intergenerational transmission of inequality.
  • Economic disadvantages faced by one generation in the ST and SC communities are often passed down to the next, creating a cycle of poverty and marginalisation.
  • This cycle is reinforced by limited social mobility and the lack of effective affirmative action in practice, despite constitutional guarantees.

Impact of Policy Interventions to Mitigate Economic Disparity and Implications of Persisting Disparity

• Impact of Policy Interventions
  • While various policy interventions have aimed to address these disparities, their impact has been uneven.
  • For instance, reservation policies in education and employment have provided some upward mobility for members of the SC and ST communities.
  • However, these policies have not sufficiently addressed the broader economic inequities that affect daily consumption and living standards.
  • Additionally, rural development initiatives and direct benefit transfers, while beneficial, have not fully reached the most disadvantaged due to implementation challenges and inefficiencies.
• Implications of Economic Disparities on Social Stability
  • The underlying economic disparities among India's social groups have broader implications for social stability and cohesion.
  • Persistent inequality can lead to social unrest, as marginalised communities become increasingly aware of the gaps in wealth and opportunity.
  • This can undermine the broader goals of economic development and social harmony.
  • Therefore, addressing these disparities is not only a matter of economic policy but also one of social justice and national stability.

Strategies for Addressing Economic Disparities

• To effectively address these disparities, it is essential to implement comprehensive and targeted strategies.
• This includes enhancing access to quality education and healthcare for marginalised communities, creating economic opportunities through skill development and employment programs, and ensuring that welfare schemes are effectively reaching those in need.
• Additionally, there should be a focus on creating an inclusive economic environment that enables social mobility and reduces systemic barriers to economic participation for all social groups.

Conclusion

• While India has made significant strides in reducing overall income inequality and lifting millions out of poverty, the persistent caste-based disparities in consumption and economic status underscore the need for continued and focused policy interventions.
• By addressing the unique challenges faced by different social groups, particularly the ST and SC communities, India can move closer to achieving a more equitable and harmonious society.

The reduction in the Gini coefficient and improvements in consumption patterns are promising, but sustained efforts are necessary to ensure that these gains are broadly shared across all segments of society. 

Q) What are the primary indicators of economic disparities among different caste groups in India, and what do they reveal about consumption patterns?

The primary indicators of economic disparities among different caste groups in India include the Gini coefficient and consumption shares relative to population proportions. For example, in 2022-23, Scheduled Tribes (STs) constituted 9% of the population but only accounted for 7% of total consumption, while the Scheduled Castes (SCs) made up 20% of the population but had a consumption share of just 16%. Conversely, the General category, which represents 28% of the population, commanded a 36% consumption share. 

Q) How do the underlying economic disparities among caste groups impact social stability in India, and what strategies are recommended to address these issues?

The underlying economic disparities among caste groups significantly impact social stability in India by perpetuating cycles of poverty and marginalisation, particularly within the ST and SC communities. These disparities can lead to social unrest as marginalised groups become increasingly aware of the inequities in wealth and opportunities. To address these issues, it is recommended to enhance access to quality education and healthcare for marginalised communities, create economic opportunities through skill development and employment programs, and ensure effective implementation of welfare schemes.

Source:The Indian Express