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Q.How can you reduce inequalities in the distribution of income and wealth?

Telangana TsbieTSBIE Telangana Intermediate (2nd Year) Commerce Board 2020Subjective· 10mImportance★★★★★est
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Inequality in income and wealth is reduced by taxing the rich more and spending on the poor, by redistributing productive assets (land reforms), by generating employment, and by providing social security, subsidised food, education and health so that the poor can earn and spend more.

Why reduce inequality

Extreme inequality lowers overall welfare, weakens demand and creates social tension, so reducing it is a key objective of Indian planning and of NITI Aayog's inclusive-growth agenda.

Measures to reduce inequality

  1. Progressive direct taxes: Higher income tax, wealth and gift taxes on the rich, with exemptions for the poor.
  2. Land reforms: Abolition of intermediaries, tenancy reform and land ceilings to redistribute land to the landless.
  3. Control of monopolies: Competition law and regulation to prevent concentration of economic power.
  4. Employment-generation programmes: Schemes such as MGNREGA guarantee wage work and raise rural incomes.
  5. Poverty-alleviation and self-employment schemes that help the poor create assets.
  6. Social security: Pensions, insurance and welfare schemes for the old, disabled and weaker sections.
  7. Public Distribution System (PDS): Subsidised food grains protect the real income of the poor.
  8. Minimum wages and fair wages to protect unorganised workers. …

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