| Learning to be equal
The beginning determines the rest of the journey. The less fortunate ones, who are born in the gutters, live, grow, work, breed and die in them, leaving a similar road map for their offspring. Their fortunate counterparts go to school. They learn the states of the art and depending on luck and ability, excel or remain commonplace, but are always able to provide the same or even better opportunities to their progeny as they had once enjoyed when young. Social scientists call this by various names: lack of social mobility, path dependence, non-ergodicity. But whatever name it is called by, there is little scope to dispute that the absence of opportunities for the poor or the phenomenon of an entire life being decided by the environment where a person is born happens to be the worst form of inequality.
In common parlance, however, socio-economic inequality is understood and approached in a different manner. The usual practice is to represent inequality by some measure of the average dispersion of income or consumption levels across individuals living in a society at any given point in time. These measures typically tell us to what extent disparity in living conditions actually exists among the citizens and are often used to rank countries according to their degrees of inequality. The measures are also employed to compare inequality levels of a single country over different points in time. Various measures of actual inequality are used in practice, and perhaps the most notable among them is the Gini index to which we shall turn in due course.
The first type of inequality — inequality of opportunities — tells us how inequality is going to shape up in future. It also guarantees that inequality breeds inequality and that disparity has a nagging tendency to persist. The second type of inequality is actual and consequential. It is less important than the first for at least a couple of reasons. First, one can argue that some actual inequality is desirable for the well-being of society because it provides the right incentive structure. If everyone were to earn the same income irrespective of how much effort he puts in, then no one would have the incentive to work hard and the consequent loser would be society at large.
So the ideal environment would be one where every one gets the same chance to perform, but only the actual performers are rewarded. This ideal set-up would entail complete equality of opportunities, but some inequality in the actual distribution of income. Secondly, if inequality of opportunities were reduced, over time, actual inequality would automatically fall, irrespective of whatever actual income distribution one starts with. Therefore, in the long run, while equality of opportunities is crucial, actual inequality at present would matter only if opportunities are not equally distributed.
Unfortunately, estimates of inequality in social and economic opportunities are enormously more difficult to come by than estimates of inequality in income or consumption. For instance, the World Development Report 2006, published recently by the World Bank, provides several estimates of consumption or income inequalities of countries all over the globe. If one focuses on India and concentrates on the Gini index as a measure of inequality, one finds that India, with a Gini index of 0.33, is the 44th most equal nation in a list of 127 countries.
In other words, if we group the countries into four quarters, India would lie in the second highest quarter in terms of equality of income distribution. It may be mentioned that the Gini index takes on values between 0 and 1, with 0 interpreted as perfect equality and 1 as perfect inequality. It may also be mentioned that in the set of 120 Gini indices for as many countries, the value of the index has been as high as 0.7 (Namibia) and as low as 0.25 (Czech Republic).
Should we then rejoice in the fact that India is not so ill-placed among the countries of the world in terms of income inequality' For two good reasons we ought not. First, a careful glance through the list of Gini indices reveal that, on an average, the value of the index is low for low-income countries, high for middle-income ones and again low for high-income nations. Indeed, it is hardly a privilege to be clubbed together with low-income nations.
Secondly, in India, as in other low-income countries, the value of the Gini is low simply because there are not that many rich people around. The long tail of income distribution consisting of the less affluent probably starts right after the top two-three per cent income earners. This talks poorly of the state of economic development in the country, in particular, about the possibility of the currently underprivileged to make a dent in the iron wall separating them from the privileged. This, in turn, brings us back to the problem of inequality of opportunities.
Though no direct evidence is available, the World Development Report 2006 provides an important information from which it is possible to get an idea of social mobility indirectly. It is well understood that for the underprivileged, the principal means of climbing up the social ladder are to acquire education. So information on the distribution of educational attainment can give us a fairly good idea as to how actual inequality is likely to shape up in future. The World Development Report 2006, apart from providing data on income distribution, furnishes information on the distribution of the population in each country according to its educational attainment, measured by the years spent in school. Based on these distributions, the report also presents a set of educational Gini indices representing inequalities in educational attainments. These indices, with just a little stretch of the imagination, can be used as reasonably good proxies for indicators of inequality of opportunities.
If one goes by the educational Gini, India, which has an educational Gini index of 0.56, is ranked as the 104th most equal nation in terms of equality in educational attainment in a set of 125 countries. In other words, educational inequality is considerably more acute in India, both absolutely and relatively, than income or consumption inequality. This, in turn, reveals that as far as the equality of opportunity goes, India is in a particularly shameful state of affairs.
The government of India is trying to expunge this shame by increasing reservations for the backward castes and tribes in the highest seats of learning in the country like the AIIMS, the IITs and the IIMs. Nothing can be as perfunctory, misdirected and mindless as the present emphasis on reservations. A recent National Sample Survey report reveals that only a little more than 4 per cent of the underprivileged castes, scheduled castes and scheduled tribes combined, of age seven years and above, can cross the hurdle of high school. If reservations in higher seats of learning is aimed at this privileged 4 per cent, what about the rest'
Recently, the government has passed the rural employment bill in parliament, guaranteeing at least 100 days of work in a year for one family member chosen from each rural family. We propose that a similar piece of legislature be introduced for primary and secondary education. Let one person from each family be chosen and let the government assume the responsibility of putting him or her through primary, middle, secondary and high school. Let residential schools be built for this purpose so that the students can get all the help they need from within the school.
This education guarantee scheme will have at least three advantages. It will improve the real opportunities for the underprivileged and reduce inequality in the long run. It will provide at least one educated and informed person in each family who can take better decisions. Finally, it will increase and improve the stock of human capital of the country, which is crucial for sustained economic growth and development.