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Inequality and Growth?

Let me start with a short story. Once upon a time there were two friends Raman and Karan. Both were very good friends during their school days. They were neighbors and their family are very close to each other. Both were equally good in study. Only difference was Raman family was richer than Karan. Thus Raman could afford to an expensive coaching for JEE and got into the IIT while Karan joined a UPTU college HBTI.

Both after completing their graduation joined job. Given Raman went to IIT he got a very good paying job but Karan got an average salary job. Now it was time for getting married. Given Raman was from a conservative family he married a girl who was from same caste but less educated and unemployed. However Karan married a girl who was as much educated as Karan was and earn almost as much as Karan.

Thus Raman was earning more but his wife was not earning anything. At the same time Karan and his wife both were earning. Thus total earning of Karan’s family became higher than that of Raman’s family. Now Karan could afford better housing and better car than Raman. Some people found it strange that how suddenly Karan was doing better than Raman.

Most of you now have understood my point. This difference between Raman’s and Karan’s family came because there was less or no inequality between Karan and his wife while same was not true in case of Raman’s. So by minimizing inequality Karan’s family started doing better than Raman’s family. Think if Raman would have married a working woman then inequality in his family would have been lesser and his family would have beaten Karan’s family.

Thus for a better growth its important to minimize the inequality. This can be achieved by social securities provided by government and by curbing the corruption.


One response to “Inequality and Growth?

  1. Pingback: Why Reservation? | iSpeak

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