Wealth distribution as means to oust inequality is problematic: India's ex chief statistician

At a time when Congress leader Rahul Gandhi has been speaking of wealth survey and redistribution of wealth from his campaign platforms for the Lok Sabha elections, The Sunday Guardian caught up with Pronab Sen, noted economist with PhD in Economics from Johns Hopkins University and former chief statistician of India, to find out how feasible such redistribution is.

- NIVEDITA MUKHERJEE

Q: There is a storm brewing in the country over the issues of stark wealth inequality and concentration of wealth. Do you support the idea of ascertaining who is in possession of the wealth of the country and redistributing the same?

A: Well, up to a point. This makes a lot more sense when you are talking about poverty. You want to get people up to a minimum. But purely distribution as a means of want

ing to get inequality out, is more problematic. The real answer to that is not a tax and transfer. That’s not the real solution. The real solution is what your development strategy is. What is your growth strategy? Are you creating conditions whereby those segments of the economy which give rise to a more equal income? Are they being encouraged on that? That is the appropriate question to address.

Q: There have been several reforms in the Modi 2.0 which government says have taken the economy to big heights and put money in hands of the people. But there is a perception in the middle class that wealth disparity has exacerbated.

A: Not really. The middle class has not thought like that, particularly the upper middle class. The middle class hasn’t done badly. The real issue is the lower middle class, which is really politically the most dynamic and volatile. In their case, a lot of their well-being really depends upon the MSMEs. And there is really no strategy, no real diagnosis about the nature of their problems. And, therefore, the strategies that have been employed, like working capital guarantees and things like that, they only address it at the margin. It doesn’t do anything substantial.