In popular perception, most often poverty and inequality are synonymous. The cliché, ‘Rich are getting richer, poor are getting poorer’ sounds like poor are poor because the rich are growing their wealth at their expense. This may not be wholly true.
Complex Relationship Between Poverty And Inequality
There is a lot of literature on poverty and inequality and I will not spend time defining them. Let’s look at USA. It does not have the levels of abject poverty witnessed in Sub-Saharan regions or many parts of Asia. However, it is one of the most unequal major countries in the world. Back home in India,the difference between poverty and inequality cannot get more stark than this. As per Gini- coefficient, Kerala is one of the most unequal states in India while Bihar is one of the most equal states. Per capita GDSP (Gross Domestic State Product) of Kerala for 2015-2016 stood at INR 1,55,516 while that of Bihar for the same period was INR 63,200. Kerala’s per capita income was about two and a half times that of Bihar. Simply, this means that majority of the people are equally poor in Bihar while majority of people in Kerala have a decent standard of living.
According to Arvind Panagariya,
“Inequality is complex as well as multi-dimensional and in developing countries like India, poverty reduction should take precedence over inequality removal.”
On the other hand calculations made by Oxfam reveal that if India were to reduce inequalities by just one-third, more than 170 million people would no longer be poor. Most experts agree that economic growth is necessary to reducing poverty. However fast economic growth also brings with itself rising inequality since not all sections of the society are equally competent or have equal opportunities to take advantage of this growth. So, what should we be more concerned about- Poverty Or Inequality.
Attack Poverty, Inequality Will Get Corrected
We as a nation need to direct our resources towards raising the absolute incomes of the people at the bottom of the pyramid. In my article, #economyforall: Understanding Inequality In India, I argue that people in the bottom part of the income distribution pyramid were to be empowered and uplifted with concerted efforts by the government and social entrepreneurs, they could rise to the mid income level bracket (become middle class) thereby reducing the gap between the spread of nation’s wealth and wiping out extreme poverty.
New World Wealth said that the ideal percentage of wealth in the hands of millionaires should be less than 30%, so that it can have a powerful and significant middle class. Japan has only 22% of its total wealth owned by millionaires.
Ideal income distribution
Social Entrepreneurs Are Antidote To Poverty And Inequality
Government is without doubt the biggest change agent in our country. According to an article in Economic Times, government policy has been seeking to achieve participation of the less well-off in growth through financial inclusion, better schooling and healthcare, skill development and enabling broadband. However it further adds that more needs to be done, both to accelerate growth and broaden participation. I think this is where the social entrepreneurs fit in. In my article, Social Entrepreneurship Can Reduce Inequality. Here’s How. I have pointed out 3 basic reasons why social entrepreneurs are best poised to address poverty and inequality. While government policy works top down, social entrepreneurs innovate grassroots solutions sharply focused on various problems faced by target communities across water & sanitation, education, healthcare, clean fuel and livelihood creation. Thus they are agents of inclusive growth and sustainable development.
Sustainable development through social entrepreneurship
Hear Directly From Some Social Entrepreneurs
Sathya Raghu V Mokkapati, Co-Founder Of Agriculture Startups Kheyti & Cosmos Green
Sathya is a passionate and an experienced agriculture entrepreneur. He loves spending his time thinking, innovating, adapting and implementing solutions which can increase the incomes and climate resilience of ultra poor farmers in India.
In this Hangout Sathya explains the fundamental problems of agriculture in India, why farmers’ kids don’t want to continue with agriculture and how govt and startups can change that.
Vikash Das, Founder, Vat Vrikshya
Vikash forsake his conventional corporate career to dive right into tribal areas of Odisha to improve the lives of tribal communities. Through his social enterprise, Vat Vrikshya he aims to provide sustainable livelihood opportunities to them and bringing about a positive change in their lives.
In this Hangout Vikash talks about some classic problems of tribal people, his experience of working in Naxalite areas and shares his views on social entrepreneurship and its ability to bring about social change.
Arun Agarwal, Founder, Janitri Innovations
Janitri has developed an affordable, easy to use and portable uterine contraction monitoring device for intra-partum period which can be placed on the abdomen of a pregnant woman to measure frequency, duration and intensity of the uterine contraction.
In this Hangout I asked Arun about the larger social problem he is addressing through his product, how the product works, how he intends to reach his target users and the way ahead for his venture.
Clementine & Amit, Co-founders of Oorja, A Clean Energy Startup
Clementine Chambon and Amit Saraogi are co-founders of Oorja, an interesting social good startup that has dual goals of providing access to clean energy to rural households while facilitating their socio-economic development through micro entrepreneurship.
In this Live Hangout, I tried to understand the problem they are tying to solve through Oorja, asked them about their experiences from the field, their operational model and their vision for Oorja.
Problems of poverty and inequality have a complex correlation between them. While governmental policy is the biggest change agent, we need social entrepreneurs to effectively address these problems at the grassroots.