Increased national wealth did not result in equitable distribution of its benefits. It has created only some "enclaves of modernity and prosperity for a small minority at the cost of the majority." Justify.

Understanding ‘Enclaves of Modernity’

‘Enclaves of modernity’ refer to geographically concentrated areas or social groups that experience rapid economic development, technological advancement, and improved living standards, while the surrounding regions or larger population remain relatively underdeveloped. These enclaves are often characterized by high-skilled employment, access to quality infrastructure, and a consumerist lifestyle. They stand in stark contrast to the realities faced by the majority of the Indian population.

Drivers of Unequal Distribution

1. Liberalization and Market Forces:

The 1991 liberalization policies, while boosting economic growth, also led to increased competition and a focus on profit maximization. This resulted in a concentration of wealth in the hands of a few, particularly those involved in sectors like finance, technology, and real estate.

2. Skill Gap and Education Disparities:

The demand for skilled labor has increased with economic growth, but access to quality education and skill development remains unevenly distributed. This creates a gap between those who can benefit from new opportunities and those who are left behind. According to the Periodic Labour Force Survey (PLFS) 2022-23, the unemployment rate among graduates is higher than that of those with lower educational qualifications, indicating a skill mismatch.

3. Sectoral Imbalance:

Growth has been concentrated in certain sectors, such as IT and services, while agriculture, which employs a large proportion of the population, has lagged behind. This has led to rural distress and migration to urban areas, exacerbating existing inequalities.

4. Policy Biases:

Historically, policies have often favored capital over labor, leading to a decline in the share of labor income in national income. Tax policies have also been criticized for being regressive, benefiting the wealthy more than the poor.

5. Globalization and Technological Change:

Globalization has increased competition and led to job displacement in certain sectors. Automation and technological advancements have further exacerbated this trend, creating a demand for highly skilled workers and reducing the demand for low-skilled labor.

Consequences for the Majority

• Increased Poverty and Inequality: Despite economic growth, a significant portion of the population continues to live in poverty. According to the World Inequality Report 2022, the top 10% of Indians own nearly 77% of the total wealth in the country.
• Social Exclusion: The widening gap between the rich and the poor leads to social exclusion and marginalization of vulnerable groups.
• Regional Disparities: Economic growth has been unevenly distributed across regions, leading to widening regional disparities. States like Bihar and Uttar Pradesh continue to lag behind states like Maharashtra and Karnataka.
• Political Instability: Rising inequality can lead to social unrest and political instability.
• Limited Human Development: Lack of access to basic services like healthcare, education, and sanitation hinders human development and perpetuates the cycle of poverty.

Examples Illustrating the Disparity

Mumbai: The city showcases a stark contrast between the opulent lifestyles of residents in areas like Bandra and South Mumbai, and the sprawling slums where millions live in poverty.

Bangalore: Known as the ‘Silicon Valley of India’, Bangalore has witnessed rapid economic growth in the IT sector, but this has not translated into equitable benefits for all its residents. Many migrant workers and those in the informal sector struggle to make ends meet.

Gurgaon: A hub for multinational corporations, Gurgaon displays a similar pattern of concentrated wealth and widespread poverty.