Sample Essay on Causes and effects of income inequality in India

Causes and effects of income inequality in India

India has the largest democracy in the world its population totaling over 1.2 billion. During the start of the 1990s, India introduced economic reforms that are marked based. However, despite this fact, the country still struggles under the weight of numerous problems such as inadequate infrastructure, poverty as well as economic inequality. To tackle poverty in the country, different progress strategies have been carried out but still, the future of millions in the country is uncertain.

Economic inequality has especially proved to be a thorn in the flesh and there are several factors that contribute to this state of things. Some of these are as highlighted below.


Government policy

There was a reduction of top band income tax from fifty to thirty percent. This means that the government shifted from progressive taxing to regressive.

Liberalism of policy

Inequality arises when the market is free as such the 1991 liberalism policy that was adopted by the government of Narasimha Rao and which has been adopted in 3 Congress governments has greatly contributed to the state of income inequality in the country.

Increased unemployment

India has witnesses little to no industrial growth within the last two or three decades. Massive unemployment cases have also been witnessed within service sector. This has led to insecurity, inequality as well as unemployment.

Increment of salaries for highly paid employees

The increment of salaries which was made before then after recommendations made by 5th pay commission increased the salaries of highly paid employees than those who are lowly paid. As a result, this has greatly contributed to cases of income inequality.


Income inequality has serious effects on the Indian population. Some of these are complex and dependent on a couple of factors. Note that most of these effects are especially notable among vulnerable populations such as children. Children from low income families are at high risk of disease and child mortality. It is facts such as these that don’t leave any doubts about the importance of solving the issue of income inequality in the country.

Another major effect is that young people who come from poor backgrounds become discouraged leading to cases of social unrest. Young minds need to prospects that can give them hope and a brighter economic status. If this is not achieved, it only means the richer will get richer while the poor get poorer thus creating a repetitive cycle. By alleviating unemployment among the youth, cases of income inequality will be addressed as well.

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