Cause of economic inequality in India or the inequalities of income exist in our society because of the following reasons:
- Lack of educational opportunities: Illiteracy is one of the single factor that has kept our people idle and ignorant for centuries. So, such people have not been able to earn just sufficient livelihood for themselves.
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- Gap between rich and poor: There exists an increasing gap between rich and poor. Rich people are able to increase their resources by earning huge profits while income of poor people has not increased. This has widened gap between them.
- Law of inheritance. Some people inherit their parental property, business, etc. They remain economically strong though out while poor people inherit family debt and increased family burden. This increases the inequality.
- The unequal and unjust land holdings in agriculture is an important reason for rural inequality of income. Rich farmers have big land holdings while some farmers have uneconomic land holdings.
- Increasing unemployment, underemployment and disguised unemployment are responsible for inequalities of income.