India has ranked 132nd out of 152 countries on the inaugural “Commitment to Reducing Inequality Index” released by international NGO Oxfam in association with Developmental Finance International.
Highlights of Commitment to Reducing Inequality Index:
Sweden topped the index while Nigeria took the bottom most spot. Sweden is followed by Belgium, Denmark, Norway and Germany.
- Among India’s neighbouring countries, China’s rank is 87; Pakistan fared worse than India at 146 while Bangladesh ranked at 148.
- While countries such as Sweden, Chile, Namibia and Uruguay have taken strong steps to reduce inequality, countries such as India and Nigeria do very badly overall.
- The report also noted that some middle-income countries are spending significantly less than nations that are rich today did at a similar point in their economic development.
- Oxfam’s research has shown that since the turn of the century, the poorest half of the world’s population has received just 1% of the total increase in global wealth, while the top 1% received 50% of the increase.
Commitment to Reducing Inequality Index – Top 10:
India’s Performance on Main Indicators:
India managed to secure a lowly 149th position on the health, education and social protection spending indicator, ranking below nations like Yemen, Senegal, Congo and Serbia.
- The report highlights that India’s less-than adequate spending on welfare measures is on account of its low tax to gross domestic product (GDP) ratio compared to that of some other nations. Tax collection in India is just 16.7% of GDP.
- India secured the 91st rank among nations on the progressive structure and incidence of tax indicator. The report outlined that the tax structure in India looks reasonably progressive on paper, but in practice, much of the progressive tax is not collected.
- On indicator of labour market policies, India ranked 86th. On labour rights and respect for women in the workplace, India fares poorly, reflecting that the majority of the labour force is employed in the agricultural and informal sectors, which lack union organisation.
- Gender norms and existing discrimination against working women have now manifested in the form of lower pay for women, often for doing the same job and despite longer working hours. In India, the wage gap is 32.6%.
About Commitment to Reducing Inequality Index:
The index measures efforts of Governments of countries which pledged to reduce inequality (gap between rich and poor) in 2015 as part of the Sustainable Development Goals.
- The index is based on three main indicators –welfare spending, progressive nature of tax system and prevailing wage inequality in the labour market.
- The overall rank (Change Readiness Index Rank) for a country is calculated as an average of their scores on each of the main indicators.
- Welfare spending is measured by expenditure on health, education and social protection.
- In a progressive tax system, the tax burden on corporations and individuals goes up progressively as per rise in income levels.