The pandemic provided an opportunity to correct social inequities, yet indications are that we may have squandered it, according to Reetika Khera, Associate Professor, IIT-Delhi.
“Public awareness is first step towards remedying the situation,” she said while delivering the third foundation day lecture in honour of Prof MA Oommen at the Dr John Mathai Centre, Aranattukara, Thrissur, on Thursday.
Mandated disclosures
Welfare transfers have historically been important in reducing inequalities, but they require government revenues. But the discussion on government spending on the poor is often stifled by limiting it to the need to contain fiscal deficit by lower spending. For instance, in the public discussion around the budget, ‘fiscal deficit’ is a frequently occurring term, she noted.
Less discussion on revenue side
There is much less discussion of the revenue side. When tax revenues do not grow, the ‘fiscal space’ gets reduced and balancing the budget necessarily implies a reduction in expenditures, Reetika Khera said.
For successive governments, the most obvious candidate for any expenditure squeeze is social sector spending.
Available data on pay ratios sheds light on how the demands of the corporate sector should raise some questions. The same corporate houses that were begging for relief from government to ‘save’ their businesses during the lockdown were simultaneously paying out unimaginably high salaries to their CEOs.
Massive pay inequality
Even within these companies, there is massive inequality in pay. The highest pay ratio is 1:752 - which means the highest paid person gets 752 times the salary of the median earning employee. The annual remuneration in this case was ₹84.6 crore - that of Pawan Munjal at Hero Motocorp.
The lowest pay ratio was at Maruti Suzuki, at 1:39. The average of these pay ratios is 1:259. So, on average, the top-paid person gets nearly 260 times the median employee. These inequalities can only be termed obscene because data from National Sample Survey for 2017-18 suggest that only 17 per cent of male workers earn more than ₹10,000 per month, Reetika Khera noted.
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