 Forbes magazine comes out with its annual rich list and it also on its website has a real-time top 10 billionaires list Which gets updated every day now out of those 10 top billionaires in the world to our Indians Gautam Adani and family and Mukesh Ambani There are seven Americans one Frenchman and two Indians now Maybe many people are feel proud about that they've you made it Our people are amongst the richest in the world and that means that we are very prosperous as a country, but One would have probably believed that had it not been for the fact that around the same time Mahesh Vyas of CMI has come out with some stark data about unemployment in India Unemployment in March reached Probably the highest level it has since the second wave ended and by unemployment I don't mean the unemployment rate, but the number of people who don't have work Total number of employed right now is about thirty nine point six crore. That's the March 2022 data Which is lower than what it was in January and February 2022. Remember the second third wave Not second third wave of COVID actually hit us in January and February and by March Most restrictions were gone and there was talk that things are coming back to normal Everyone's out at work Construction is taking place all around me in Delhi NCR. I see construction taking place so there appeared to have been a lot of economic activity taking place and Especially if you hear about what is happening in the startup and the tech space You think that things are back to being extremely prosperous and positive But employment is lower in March than January and February and remind you that number would have been even worse Had it not been for the fact that employment in agriculture increased sharply, which is before the harvesting season actually Employment increased sharply before the harvesting season, which does not normally happen and as Mahesh was right This suggests that this is disguised unemployment where people really don't have work But because they don't have work they've gone back to their family homes in the village and they're helping out on the farm So when surveyors go they say we have farmers. We're working on the farm Now that is the two big contrasts that we see some of the richest people in the world and some of the poorest people in the world a handful of very rich people and billions of poor people in India Pundits call it the two Indians Right that there is one India which is prosperous and there's another India Which is lagged and not been able to catch up and it appears that as if these two Indians are like that because They operate in two different ways, but that's not true. It's the same policies same system Which has made this into two Indians. It's actually one India The rich a handful of rich are becoming richer and the rest are becoming poorer or staying where they are because of the same system which is causing it and the core of the system is what has been called the LPG reforms or liberalization privatization and globalization and you know that it is largely credited to the Rao Manmohan reforms of 1991 but it actually began earlier in 1982 the baby steps were taken by Indira Gandhi and then Radhiv Gandhi Accelerated things especially when it came to liberalization. Now. What is liberalization? Liberalization is essentially where the state which had restricted entry to private entrepreneurs in some core sectors Which had wanted to control which it thought was essential for the economy and for society and nation That was opened up to private companies and this happened largely from the 1986-87 period under Rajiv Gandhi and then of course accelerated in the 90s Another thing that is important part of liberalization is that earlier big companies were restricted when it came to having You know presence in allied sectors So if you have if you had a big company if you were a big company in one sector You had certain restrictions in another sector which would be allied so that you could not control Large parts or large sectors those restrictions were gradually lifted which meant that bigger companies actually became bigger And very soon we saw the emergence of monopolies and oligopolies or a few companies or a one or one company Controlling one sector or industry now the second thing that we talk about which is privatization Which is actually closely allied and a corollary of liberalization itself is this is the government withdrew the state withdrew and public resources public assets were sold to private entities and This is what is called privatization and that process is going on all the time that public sector companies Public assets like mines and all these things are being sold to private companies The government is raising money which it says that we have no business being in the in business And therefore we should hand it over to private sector and we will get money from them Which will spend on welfare and the final part of this LPG reforms is globalization Which is essentially earlier. There were restrictions for the entry of Foreign capital and foreign goods you couldn't import things so easily and foreign companies couldn't invest in India And from the 1990s those restrictions were gradually lifted foreign companies could invest and produce things here You could buy foreign goods import them very easily tariffs were brought down and finally Finance capital a portfolio capital could come and invest in Indian stock markets Which actually caused a massive boom in the stock markets itself So there are these three things LPG which was supposed to essentially unleash the entrepreneurial spirits of Indians, right and they were supposed to Make people Enable them to show their talents start new businesses without any restrictions make it easy for them to start new businesses And if they got rich if they made profits they would buy things They would employ people and in that process. They would set off a Virtuous demand and supply cycle. They would set off a virtuous employment cycle They would get richer and that would trickle down to others who would get prosperous as well And India would become a prosperous Nation like the developed world of course Unfortunately capitalism does not work in that fashion what happens is that those with capital always have a starting advantage They are able to price out smaller businesses with their holding power if a smaller business tries to enter a particular sector a Big company which has a lot of money and deep pockets can keep prices low and Ensure that the small business is unable to compete and that business either has to Vacate that space shut down or become a supplier or a vendor to this big client So that is how? privatization causes big companies to become even bigger that is a part of opening up the Sectors liberalization essentially liberalization and privatization causes the formation of Monopolies with a few companies control everything and they form these huge conglomerations If they're making Plastics they move into steel into textiles into telecom they cover the entire range a few companies Cover everything and we know that that has happened since the 1990s in India and the third prong which is globalization That too aids this process of bigger businesses becoming bigger. Why because when a global company Cut tries to come and do business in India. It chooses someone who knows the system who has Contacts who can make things easy for them as their domestic partner and also when they come in to Invest in the stock markets They choose big established companies because those are not going to fail what I call the blue chip stocks and in that process The blue chip stocks become even more valuable those companies become even more valuable And it becomes easier for them to raise money even for bands because they say look this is the value of my company Give me a loan. I'm not going to fail. I'm going to return it So they have that financial advantage in the market as well and finally globalization, especially after the emergence of China and imports from China also Basically wipes out competition from small unorganized sector players who produce small Small goods which now have been replaced especially over the last decade by Chinese product So that is another way in which the bigger companies Consolidate the market the smaller companies get wiped out by imports and finance capital goes and Puts in more money in the bigger companies In a sense money big gets money capital big gets capital money flows towards money and makes it even Bigger this is essentially the three-pronged thing that has caused Extreme inequality in India the poor as I've argued in the past have hardly gained through this process That started in the mid 80s and has continued now the poor have made gained very little There's been their income growth rate has been exactly the same what it was in the so-called socialist period Whereas the small minority of rich people entrepreneurs corporates They have just exploded in terms of the wealth and riches and income that they have the amount of income that they control today Yes, it has also benefited professionals white collar workers or in who have been employed with them government employees have also benefited because in competition with the private sector to retain government employees and to also not cause a lot of unrest amongst them Various pay commissions have actually increased government salaries significantly compared to what it used to be in the so-called socialist Period before privatization liberalization globalization came into play So middle-class a cream has been created, which is not more than one to two percent of Indians who can actually buy goods And that is the problem because India has increasingly become a country which produces goods and services for the richest people and For just about the upper middle-class maybe there's a amount beyond the there's a limit beyond which demand cannot increase So it is consistently constantly Constrained where it comes to demand and there is no reason why rich companies would want to expand production So big companies are simply taking over other areas looking for places to consolidate and that is causing even bigger discrepancy between the poor and the rich and things have become worse because of GST because what has happened? I talked about the LPG refunds with GST has actually made things even worse because earlier small unorganized Manufacturers small unorganized businesses could offer you cheaper prices because they often didn't pay full taxes So they would say if you don't take a PAKKA bill You don't you have to pay less and they could compete with the organized sector Not entirely, but still they had some hole But what GST has done is brought them under the tax net on the face of it That's a great thing But at the same time what has happened as these people can no longer compete in the process GST while expanding the tax net has made it Easier for big companies to control and dominate the market and increase their market share So that is another thing that has made the gap between the rich and the poor even wider in India over the last few years Now this is a huge danger for democracy. Why because when inequality increases the super rich are able to influence and control All institutions whether it's the media whether it's political parties whether it is neta's whether it is State institutions and even government policy The rich get richer they acquire influence and in the process the policies are Oriented to make them even richer. This is a vicious cycle which continues now This is a situation which is happening now in India some say that India is already a plutocracy State or a society which is run and governed by the rich Even if it isn't it is in grave danger of becoming one unless there is a Rethink unless there is a political movement to stop that and that the government Decides that it has to bring in policies which equalize things That's the only way in which democracy can continue to be a real democracy in India or else We will become a plutocracy. That's the show today. Keep watching news. Click subscribe to us share and like this video as well