The Roots of Appearance and Persistence of Income Inequality: A case study of India

Income inequality among various forms of inequality, these days has attracted the serious attention of policymakers, rulers and thinkers. Each of these three groups has tried to identify the causes of occurrence and continuity through their views and, of course, provide solutions to mitigate it. The beginning of the third millennium was accompanied by an intensification of income inequalities within countries, so that the efforts of the international community, which had previously been able to reduce poverty and absolute hunger in the framework of documents such as the Millennium Development Goals, to reduce it, so far has failed to alleviate it. Identifying the causes of the emergence and perpetuation of income inequality in different economies is very significant at a time when the threats posed by income inequality are estimated in important documents such as the Global Threat Report as significant as terrorism. The subject of this article is to examine the textual, institutional and global causes of the continuing income inequality in India, which has recorded a remarkable economic growth rate these days. In India, a set of factors including the roots of social system deficiencies, economic growth, globalization and its tools such as privatization and trade liberalization are among the main causes of continuing inequality in Indian society today, which seems to be a continuous process due to the priority of economic growth against the reduction of income inequality for different governments in this country.


Introduction
Over the past few years, India has consistently experienced high growth rates. With the world's greatest democracy, this country is trying to reach the world's top three economies, and with its ambitious goal for many years, it has also made its goal to be a permanent member of the Security Council.
The developments in India today are such that if one day its name had been tied to poverty, the economic and scientific developments of the country have now attracted universal attention. For a long time, the vast majority of foreign countries in the country are commonplace, and the sales of Indian goods on the world markets have increased sharply (Nazem and Eslami: 2010:154).
What is seen today in the transformed economy of India can be seen as a result of accelerated measures taken since the mid -1970s by transforming the tax system and implementing new economic policy programmes to reduce the role of government and encourage entrepreneurship as well as foreign investments. However, the landmark economic transformation point in India dates back to 1991 and the implementation of broad economic reforms in the country.
In this year, the pace of change of policies rose and coincided with the adoption of neoliberal reform programmes, a period of intense economic liberalization and change of attitude towards government intervention in the economy stated, which is a beginning to increase the large disparities of income that continue so far. The per capita consumption rate of the poor is evidence of this, despite the growing interest rate in rich-class consumption (Seida & Hashemi, 2016:8).
The persistence of income inequality in the Indian community, despite all the economic progress of the last three decades, has raised a big question about its causes in the minds of researchers. Review of existing literature suggests that pundits regard the role of factors such as the government, social fabric and global factors as the main reasons behind the persistence of inequality. The first category highlights the role of the government, which can be referred to in the article, the "Linkage between Financial Development and Income Inequality in India" by Rajesh Sharma, and Suman Dahiya. In this paper, the authors criticize the transfer of opportunities and revenues from the rich to the poor in an efficient way to moderate-income inequality and criticize the Indian government as the main responsible for this measure. From the eyes of the writers without government intervention, income inequality is not avoidable, and it is the government that can and must create more job opportunities for the poor through economic (financial and monetary policies (Sharma & Dahiya, 2019).
In other words, the persistence of income inequality in India is the result of the tasks that have not practically implemented which are solely at the disposal of the state, and it can be concluded that the government will either urge or inadvertently beat the drum of persistence income inequality.
The second category considers the caste system and social fabric and ethnicity of India effective on the continuity of inequality. The article "Examination of the roots of the Caste system in India" by Dr Heshmatossadat Moeini is in this category. By explaining the characteristics of the Caste system, the author has paid attention to the lower classes' effort to get rid of the dominance of the dominant classes.
He believes that despite reforming the constitution of India in order to alleviate the effects of the Caste system, 90 % of the ordinary classes living in the countryside is dominated by businessmen and owners and are still economically dependent on higher classes. (Moeinfar, 2012:99) The third group believes that the development process and economic growth in the framework of adaptability with global rules are the main contributing factor to the persistence of income inequality in the Indian community. Examples of such works can be referred to the article "social development and inequalities in India" by Mohamad Mazloum Khurasani and Mojgan Azimi Hashemi. In this paper, with comparative historical method, the conditions of income inequality and welfare in the Indian community have been studied. The paper examines how the bridge between development and democracy in the growing society of India affects the role of the interaction of the two factors in the mitigation or reduction of social and income inequalities. (Mazloum and Azimi, 2011, 12) Along with these works, there are reports that, although have not paid particular attention to the causes of the persistence of income inequality, they provide accurate facts. The Indian inequality report, which was published in 2018 thanks to the French famous economist Thomas Piketty, is of this category. According to the report, income inequality has been significant in India, with a share of 1 % of the country's high income in 2018 to its highest rate, 22 % (Piketty & Saez, 2017: 29).
The review of existing works shows that each of them simply has paid attention to a certain view of the causes of the persistence of income inequality in India, while the present article intends to point out some factors by using the sample research method and using historical analytical techniques that influence the process of reproducing income inequality in India, both independently and by influencing the will of the government and putting aside the prioritization of income equality by the government.
What attracts more attention today in India is its high gear for economic growth. Figure 1 shows that India's economic growth by 2021 is 12.6 %, according to the Organisation for Economic Co-operation and Development (OECD) and at the top of G-20 member states, representing the high capacity of the country to recover its economic power after the Corona crisis. Statistics from previous years also show India's high economic growth rate. The country's fastestgrowing economic growth in the first quarter of 2017 confirms this claim. (Kaveh and Mohammadi, 2018: 179) Despite this remarkable performance, the Indian community has always been struggling with the phenomenon of income inequality in its chronic form. The roots of income inequality can be searched in the underlying factors like the Caste culture or global and economic factors. What is certain is to examine an important element, such as income inequality which poses a potential danger to the growing society of India, for a country that has an impact on its surrounding environment, particularly South Asia and the Indian Ocean (Shafiei, 2017:108).

Caste system and regenerating income inequality in India
Ethnic and racial diversity, as one of the elements of difference in societies, play an important role in creating and reproducing inequality. Most of the world's indigenous people have less social bases than they have seen in India or ignored in the United States. Indigenous peoples in many parts of the world usually have less social standing, as evidenced by the Caste system of India or the disregard for Indian rights in the United States. Undoubtedly, since the social standing of the people of any society is born of the same society, it can play a leading or harmful role in the development of the labor market and the income of the people. Ethnic or racial inequality, meanwhile, makes that those who belong to certain ethnic and racial groups have less economic and political ability in their society.
Their racial and ethnic traits always apply them to a competitive position on the market, based on which discrimination is bred in employment, promotion and income. Due to their financial position, they lack the ability to participate in training courses that affect their job skills, so they always lag behind when they compete in the job market (Kamali, 2013:303).
In particular, one is born in India with its most important standing, namely belonging to his/her social class, which is theoretically immutable. This tradition applies equally to rural environments, where virtually no one can conceal his origin and to make a living, one has to deal with occupations that have been determined by their classes.
The main base in this system accurately comes from devolution and inheritance, and not through acquisition. Not acting on any of the tasks, such as addressing the traditional profession allowed for any classes, marriage within the social caste class, eating prescribed foods, and avoiding contact with lower classes' individuals would be the exclusion of one from his/her classes. (Melvin Tamin, 2015: 82).
Naturally, eternal belonging to a class deprived of opportunity, the sand possibility of promotion, training and skill acquisition automatically causes income differences. The continuation of these differences, due to its structural acceptance, has also provided the ground for the continuation of its results.
Therefore, it can be said that the classification of society is one of the key elements of maintaining income inequality in India. The conditions in the Indian community are such that over the centuries and significant social and cultural developments, the castes have become fully adapted to their social status, and this makes it impossible to see a struggle to change the caste between individuals and classes of society. Unlike many other societies that try to disrupt the existing distributional situation, Indian society is reluctant to change such a situation (Weber, 2005:468).
The role of Hinduism in defining this social classification is also considered important, so that it can be said that in general among the world's religions, Hinduism is unique in terms of belief in the social caste system. The notion of the caste system in colonial times remained unchanged, and the social system remained the basis of class inequalities in society. Another important thing to keep in mind was the influence of the caste system to prevent the convergence of worker communities in India and the establishment of corporate systems to pursue civil rights. In a clearer expression, the Indian community is deprived of the formation of social capacities for collective demand and to protest the income differences and multi-dimensional disparities, and this led to the reproduction of class and inequality process, especially in the income area. The revival of caste with the multi-dimensional aspects, however, is a new phenomenon in the post-independence period of India. In the eyes of those who describe class relationships as part of class analysis, the class alone is not created as a result of new changes. Changes in traditional caste-class relations have occurred not only in caste but have paved the way for the emergence of class relations. Thus, classes, as part of the social stratification system, are found in the same way that caste is rooted in Indian society, and this has an impact on issues such as income inequality.

Ensuring the continuation of the Caste system and the continuity of inequalities in India
As mentioned, in India, there are strong formal and informal guarantees to maintain and persist the fundamental distinctions between and within the castes. As an example, with the collaboration of the law and the procedures that the Pariahs (untouchables) have not the right to work in some of the jobs and the right to worship at certain times in the public, and the right to have representatives in the Indian parliament has been granted them since the 1960s. To perpetuate this classification, there is also a guarantee that usually seeks to make a person who has stepped out of their standing and violated the rules of a higher caste return to the rules and regulations of their caste. (Melvin Tamin, 2015: 86). The disproportionate distribution of opportunity, wealth and income will be the natural outcome of such a cultural environment. Statistics also confirm the unequal distribution of income and its continuous course in terms of caste, despite all the significant economic and technological advances in today's Indian society. The According to the above table, there is a gross distance to increase the income share of one higher percentage of income in the group called the upper class (FC). In a clearer way, the highest-earned people in India have doubled their share of national income compared with other caste members from 2002 to 2012, indicating a significant income gap in the Indian community today. Overall, it can be concluded that social inequality, which is historically linked to the culture and class system and caste in India, continues to play a significant role in the unequal distribution of income.

Economic growth and the regeneration of income inequality in India
India's relief from colonialism, made India's leaders and decision-makers pay attention to new serious issues and problems that had never been unaware of before. To address these problems, achieving economic growth and development topped the agenda of Indian governments.

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Other Backward Castes 4 Scheduled Castes 5 Scheduled Tribes 6 Farwarded Caste However, as in many countries, the distribution of income is also a victim of economic growth in India. This is because, as in the national accounts of countries, economic growth statistics are recorded more reliable than income inequality, and the performance of governments is generally measured by economic growth, usually, governments set their policies with the priority of economic growth (Khalesi, Piraee, 2014:156). That's exactly what is seen in India these days. While with implementing economic development programs in India, the per capita income has increased by about five times between 2000 and 2019, this increase is still a bit focused on the hands of certain individuals (www.downtoearth.org.in, 2021(. What is clear, the most important concern of Indian politicians since independence in 1947, is how to achieve economic growth and development. Ten economic development programs in the country were carried out from 1951 to 2007 to meet the dreams of Indian policymakers. In the first plan (1956 -1951), agriculture and social services, in the second and third plan (1966 -1956), heavy and infrastructure industries, in the fourth and fifth plan (1979 -1969) promotion of living conditions, in the Sixth and 7th plan (1990 -1989), agriculture and rural development were given priority (Akhavan Kazemi and Azizi, 2013: 10).
The 1990s was regarded as a turning point in India. Trade liberalization, the privatization of industries and government factories, the annual growth experience of about 7 %, and the people-based economy began directly in the form of quick and short-term plans and even the implementation of grand plans from this time onwards started with the effort of the "architect of the Indian economy, "Manmohan Singh".
India's GDP growth of 1.2 percent from 1950 to 1970 reached 8.9 percent in 2006, making it the world's second-largest economy (World Bank, 2013).
The multi-dimensional poverty has witnessed a rapid decline thanks to the combination of rapid economic growth and social policies, and the number of poor people in India has dropped by more than 271 million in India between 2005-2006and 2015-2015(Conceicao, 2019. However, many believe that the Indian development model has a lower velocity for the balanced distribution of opportunities despite the serious determination to achieve balanced development along with rapid economic growth; while the model has more depth and expansion (Bahl, 2012).
The table below shows India in the third place among the top ten host economies in the world, which indicates the security of attractive investment for large international and foreign companies. With an introduction for the economic growth process and India's economic development plans, we examine the positive and negative effects of this factor on income inequality. In general, it can be said that one of the most important economic factors affecting income inequality is economic growth.
According to Kuznets theory, although it is possible that with rising incomes and economic growth, the income equality situation will worsen in the short run, in the long run, there is always an inverse relationship between economic growth and income inequality. (Sadeghi et al., 2009: 42) According to the Kuznets theory, it can be said that it is not long since India's economic growth and this trend continues, in the short term it has shown itself as an increase in income inequality and it is hoped that in the long term, that the development of the early stages and the workforce will acquire the necessary expertise, India will become a country with a fair distribution of income. But how economic growth and development has led to the creation and perpetuation of income inequality in India is a topic that is addressed here. As mentioned earlier, paying attention to the share of income as a symbol of individual and group participation in the economy has been an important part of India's five-year economic plans since the 1950s. The economic reforms that began in the 1950s were based on the idea that the lower classes should enjoy the benefits of economic development (Alam, 2016: 115).
The designers of the five-year, consider the balanced development as a guarantee for economic growth and assume that the main cause of income inequality is unemployment and underemployment. During the years of economic reform, the Indian government has been trying to socialize the country's economy since 1956 so that the policymakers can show their determination to eliminate inequality. The impact of unemployment and underemployment on uneven income distribution or income inequality prompted members of the Indian Planning Commission (PC) to pursue development through heavy and infrastructure industries.
Slogans such as Garibi Hatao (Remove poverty) and Growth with Justice have been institutionalized on this basis in later programs during the first two decades of the development program when designers focused specifically on economic growth; their premise was that underdevelopment and poverty could not be cured without economic growth. The failure of the Trickle-down theory convinced Indian policymakers that the idea of development and growth could not bring justice to the poor, and that it was therefore necessary for the government to intervene to distribute the fruits of economic growth among the poor. To this end, the government presented a number of economic relief plans to alleviate poverty and improve employment. An examination of the rate of change in India's economic growth rate shows that between 1950 and 1994, the country witnessed upward economic growth. Comparing it with the distribution of income and wealth in terms of Gini coefficient shows that economic growth in most cases and not in all years has not helped to reduce income inequality and the unbalanced income distribution rate is still high. The relationship between economic growth and income inequality in India must be seen in part. For example, the growth of the agricultural sector had an impact on income distribution between 1988 and 1981, when economic growth grew to 5.28 percent. In the 1980s, when the rate of economic growth in rural areas was higher than the average rate of economic growth in India, favorable results were obtained in the field of income distribution. This led to record lowest Gini coefficient in India in the first years of the next decade and from 1990 to 1991, economic growth of 5.6% in India, which was largely due to the growth of the agricultural sector.
India's new economic policy, which began in 1991, included three packages of "globalization", "liberalization" and "privatization", each of which in some way had an impact on increasing inequality. However, with the introduction of the economic reform plan, the increase in inequalities in income distribution was evident, so that the Gini coefficient reached 29.88 percent in 1992 to 1993. Statistics show that despite a significant increase of about 6% in income inequality in terms of Gini coefficient, its upward trend continued until 1998. Thus, it can be said that the reduction of income inequality in rural areas after the approval of the new economic reform plan was considered a failure.
After two years, between 1999 and 2000, the Gini coefficient decreased and the distribution of income and wealth improved, but subsequent studies in 2005 show an increase in inequality and the Gini coefficient. India had already experienced massive economic growth in 1983, but that growth of 7.5 percent had no effect on reducing the income gap in urban areas, and the Gini coefficient rose to 33.7 percent. At the same time, the gap between rich and poor in urban areas was still evident, and the decline in economic growth to 4.3 percent in 1986 and 1987 also had an impact on income commitment (Alam, 2016: 119).
During these years, something else happened that deserves attention; the growth of the financial and services sectors to double the growth rate of the manufacturing sector was a new issue that can be attributed to the stagnation of the level of inequality between 1986 and 1990. During these years, income distribution in India was very unfair and the Gini coefficient increased to an average of 35.5% in different parts of the country. Of course, the role of economic growth cannot be seriously assessed, because in the same period, annual economic growth reached 6.25 percent and the gap between the growth rate of the production sector on the one hand and finance and services on the other was not deep.
A year later, while India experienced a growth rate of 5.6 percent, the shares of manufacturing and finance and services came close to 7.7. The latter may be seen as a reason for reducing inequalities, as the share of the two sectors is approaching, providing equal growth in the manufacturing sector and there has been an opportunity for unskilled and semi-skilled workers in urban areas to increase their incomes.
However, in those years, the growing financial deficit exerted pressure on the country's budget, so much so that reform packages had a negative impact on economic growth in 1991 and 1992. Over the next two years, the gap between rich and poor in urban areas widened between 1992 and 1993, despite an overall growth rate of 5.36 percent. Also, some healing policies were implemented to improve the distribution of income, which were successful, resulting in a growth rate of nearly 6 percent. During these years, the Gini coefficient fell to 33.4, but again in 1995 and 1996, the Gini coefficient increased by 2%, and despite the significant growth of 7.3% in the economy as a whole and 12.3% in the manufacturing sector, the gap between the poor and rich continued to rise.
During these years, the sharp growth of the financial sector and services again reached almost three times the growth of the production sector, and this caused the deterioration of income distribution so that economic growth of 4.3 percent could not contribute to income growth in urban areas. A study and comparison of factors affecting economic growth in India and its significant relationship with changes in income inequality shows that economic reform programs in this country have had a positive and direct impact on increasing income inequality.
However, this negative effect on income distribution may be due to changes in the composition of GDP growth, as we have seen, with the increase in the share of services in the overall economic growth of the country, income inequality has increased.

Land reform in India and its impact on income inequality
Another factor in the economic reform in India to distribute income equally and reduce income inequality was the land reform project launched by the Government of India in 1950. The project was implemented with the aim of benefiting small farmers and marginal income from agricultural land. Until then, the land system was considered as one of the factors affecting the unequal distribution of income and wealth, especially in rural areas. With the outbreak of the Green Revolution in the 1960s and the dramatic increase in agricultural productivity and income, new developments in income distribution were achieved and income inequality in rural areas was reduced. But a constant variable in the persistence of income disparities in rural areas continued to emerge. In the harvest season, the supply of agricultural products in the villages will increase and naturally the supply will be in bulk. Due to the fact that the rural population usually does not have the capacity to maintain and store their products, intermediaries and some large landowners buy their products at a very low price and after a while sell them at a higher price and when they are less in the market. This continuous trend over the years has caused the revenue share of the two sides to differ significantly from this production.
In other words, the transfer of these products from the rural market to the urban market will provide much more profit for intermediaries and the poor farmers will not benefit from it (Alam, 2016, 123).
On the other hand, the theory of individualism paved the way for the legitimation of private property in India. As a result, the capitalists were able to acquire vast assets in the industrial, commercial, and construction sectors, and to consolidate their control over the distribution flow, with a large volume of facilities. The greater volume of this advantage caused the capitalist class to have more access to all facilities and to acquire more property through special privileges and fraud. This in itself became another serious factor in perpetuating and widening the gap between rich and poor .
All in all, it can be said that for more than half a century, the actions of different Indian governments in the direction of economic development in the form of projects such as land reform and various programs have contributed to income inequality and the current situation in the country in terms of income inequality is the same as in the 1960s and 1970s.
The pattern of inequality has not changed after 60 years of Indian independence. The level of inequality in income distribution in rural areas is also low compared to urban areas, and various service, agricultural, industrial and financial sectors have an effective role in unequal income distribution.
But what is evident in the general trend of India's economic growth, especially after 1991, has no clear sign of an improvement in income distribution in different regions, and the pattern seems to be the same as before. Of course, to some extent, the rising and falling rate of growth of the agricultural sector affects the unequal distribution of income in rural areas, while the trend of income inequality continues to increase. It can be concluded that despite India's economic growth, the country has not been successful in distributing income and we are still witnessing the reproduction of income inequality in this country.

Globalization and the Reproduction of Income Inequality in India
Globalization means a form of global behavior that can bring positive results through some collective cooperation between countries (Bhatia& Panneer, 2019:02).
Proponents of this trend see the development of international cooperation, especially in the economy, and the reduction of differences and the source of differences as other advantages. Opponents also consider the destruction of the economic infrastructure of weaker countries in favor of increasing the income of developed countries as one of its most important disadvantages.
With the emergence of this phenomenon, the ground was prepared for India's presence in this field and various Indian governments considered it as a tool for economic growth and increasing GDP. However, there are several reasons why New Delhi's use of globalization and its use of tools such as privatization and trade liberalization have contributed to income inequality in the country.
In India, although there have been claims of reduced inequality in the post-privatization period, reforms have increased income inequality. Although the wealthy were able to increase their wealth in the post-liberation period, the poor were severely affected and the majority suffered a stagnant income.
In addition, in the process of trade liberalization, the inflow of foreign direct investment into India has only increased the gross domestic capital, which was poured into a small number of pockets that were also limited in terms of geographical dispersion. This increased interstate and cross-sectoral inequalities in the country (Seida &Hashemi, 2016 : 13) .
The 1991 economic crisis accelerated the process of financial liberalization adopted by the Government of India in the mid-1980s. The worst effect of this financial liberalization on inequality was the decision-making that facilitated lending rules for "prioritized sectors" for national banks. By the end of the decade, national banks were required to lend to these target sectors; but the definition of a prioritized sector expanded after the post-liberalization period, which included more activities and an emphasis on banking change.
As a result of this change of approach, most banks refused to lend to smallholder farmers and smallscale industries because they considered these groups to be low value and unreliable customers. It is clear that this has a great impact on the survival and promotion of small businesses and in many cases it is very vital for them. This issue becomes even more important when we know that such groups constitute the largest group of entrepreneurs in the country and to what extent such policies in the context of privatization, although indirectly, affect income distribution and poverty reduction (Seida & Hashemi, 2016:9). Undoubtedly, from a theoretical point of view, globalization with tools such as trade liberalization has benefits in growth, employment and income distribution. But as reforms to facilitate globalization have taken place only in limited sectors, trade and economic liberalization have widened the gap between the rich and the poor. In fact, the risk of neglecting the equitable distribution of income for Indian society is so great that it may in the future undermine the significant economic growth of the country in recent years (Ganguly, 2003: 1).

Conclusion
Rising income inequality within and between countries, despite the high rate of economic growth and the reduction of problems such as absolute poverty and hunger, has caused concern in societies. Meanwhile, India is experiencing unprecedented income inequality despite its very high economic growth rate. The findings of the article show that this income inequality is due to three types of causes. First, the textual and cultural causes of which the class or caste system of India are the most important symbol. Second, the reasons for the role of the government, the most important of which are economic development programs and land reform. And third, the global causes that have crystallized in the process of globalization and its tools, namely privatization, trade liberalization, and the development of foreign investment. What is certain is that despite the deep historical caste roots of the Indian society and the serious determination of the Indian government to take advantage of the capacity of globalization to achieve high economic growth, reducing income inequality in this country will largely fall victim to development and high economic growth.
More importantly, these influencing factors have effectively reduced income inequality from being marginalized by the national government in India.