Monday, September 9, 2019

Income inequality and unrealistic growth rate

ECONOMISTS on Saturday unanimously admitted that the country's income inequality is near the danger mark. For highlighting the per capita income and high growth in gross domestic product, the government suppresses income inequality hovering at 0.48 in Gini coefficient to show prosperity. The successive governments became alienated from the spirit of the country's War of Independence because of wrong economic policies that helped 'crony capitalism' growing. Prof Mainul of Chittagong University said that the banking sector is being exploited by the loan defaulters and businessmen while corruption by politicians and bureaucrats is the main reason for increasing black money.
The crony capitalists are smuggling out money. Besides, the country's rich and ultra-rich population is expanding due to the unequal distribution of high economic growth for the decades. The presence of businessmen in the current parliament is 62 per cent showing that 'politics is a lucrative business'. Prof Mainul recommended 16 points including private sector participation in power, gas and water sectors, reform in agriculture, land and banking sectors, checking corruption, ensuring free and fair polls and free speech, preventing commercialisation of education and health sectors. On the other hand, Mohammad Farashuddin, former Bangladesh Bank governor, said that these private power generating groups would turn into 'foes' in future although they are now 'friends' to the government. A total of 120 power plants, at least 80 of them private, set up since 2009, have 17,840-megawatt power generation capacity against the demand for 9,000mw during the summer leading many private sector power plants to sit idle. The state-owned Power Development Board had to pay more than Tk 8,000 crore, out of its Tk 21,000 crore annual spending in 2018-19, to the idle power plants of the private sector as capacity payment under a legal provision, enacted in 2010 and extended thrice up to 2021.
The fatten economy is near to verge of collapse and wrapping by mesmerising "high growth rate" and "per capita income" could not face its growing inequality and vulnerability. Real development where people would be the centre of the development is imperative for the country. The government ought to cut the politicians lineage with the economy for gaining true development.