Halting growing rich-poor gap

Growing income inequality in Bangladesh society is so glaringly evident that it hardly requires any research to discover it. Even so, there is no denying the importance of a scientific approach to know exactly how income disparity is distributed among a population. Since the income pattern in a society is constantly in a state of flux, studies are conducted on a regular basis to keep an eye on the trend.
At a recent anniversary function of a research organisation held in the city, the issue of widening income gap in society again came under review where overall poverty situation in the country was shown to have improved to some extent over the past few decades. But as before, income gap between the rich and the poor has not narrowed. On the contrary, rich-poor income gap has widened further as the rich are becoming richer at a faster rate than before. Since the process of becoming rich always happens at the expense of the poor, it is not hard to imagine how such concentration of wealth in the hands of a small number of people is taking place in the country. Based on the Household Income and Expenditure Survey (HIES) 2022, consumption inequality, the basic indicator of inequality in a society, was shown on the so-called Gini scale, which ranges between zero (0) and one (1).
On this scale, 0 per cent indicates a perfectly equal society so far as incomes of the people are concerned, whereas at 1.0 per cent, it is a completely unequal society. That is, lower the Gini index the better the situation of income distribution among a people. So, going by the 2022's HIES, though national average of income distribution was 0.334 on the Gini scale, it was highly skewed considering that for the urban areas the value of the Gini coefficient was 0.356, while at the rural level it was 0.291. In other words, the rich-poor gap was far higher in the urban areas than in the rural context. What does it signify? First, cities, where the country's industrial production and commercial hubs are located, are getting more exploitative of the working class rendering them poorer. Second, the poor are migrating to the urban centres in greater numbers thereby skewing the income gap towards higher Gini indices there (in the urban areas). But this tipping of income scales further against the poor could not be covered by the existing government-run social security net programme for the poor and the vulnerable groups in society. Even access of the poor to the government-provided health, education and other facilities in the country has been shrinking as the rich and the powerful are gobbling those up as usual in larger proportions. Alongside this general rich-poor gap, the rural-urban divide is also widening. This calls for decentralising the industrial and commercial bases from urban centres to the semi-urban as well as rural areas. For instance, relocating some garment factories, a major driver of city-ward migration, to sites closer to the rural area can help slow down the trend to some extent.
Alongside this widening rich-poor gap, falling tax-GDP ratio is another concern for the economy. For instance, in FY 2011, tax-GDP ratio was 10.4 per cent, but in FY 2021, it was 9.6 per cent. Even so, in that year, the ratio of the government expenditure to GDP stood at 15.27 per cent signifying growing fiscal deficit to finance the social development activities. In fine, to manage these macroeconomic issues efficiently and sustainably, the government would be well advised to adopt short- and medium-term measures.