UNIVERSITY INSTITUTE OF LEGAL STUDIES, PANJAB UNIVERSITY,
CHANDIGARH
CONSTITUTIONAL ASPECT OF ELIMINATION OF
CONCENTRATION OF WEALTH AND
DISTRIBUTION OF RESOURCES UNDER ARTICLE
39 (b)(c) OF THE INDIAN CONSTITUTION
A project report submitted as a part of internal assessment of the course BA LLB {hons} in
the subject of BUSINESS LAW.
SUBMITTED TO: SUBMITTED BY:
Prof. Neha Dhawan Kalpana 157/20
Sec C, 8th Semester
[Link].B. (Hons.)
ACKNOWLEDGEMENT
I would like to express my sincere gratitude to my teacher Prof. Neha Dhawan for her
enthusiasm, patience, insightful comments, helpful information, practical advice and
unceasing ideas that have helped me tremendously at all times in my research and writing of
this assignment. Her immense knowledge, profound experience and professional expertise in
the subject has enabled me to complete this research successfully. Without her support and
guidance, this project would not have been possible.
Secondly, I would also like to thank my parents and friends who helped me a lot in the
making of this project .
~Kalpana
INDEX
• INTRODUCTION
• DIRECTIVES BASED ON SOCIALIST PRINCIPLES
• CONCENTRATION OF WEALTH
• DISTRIBUTION OF RESOURCES
• ARTICLE 39 OF THE INDIAN CONSTITUTION
• GOVERRNMENT SCHEMES ADOPTED FOR THE WELFARE OF
SOCIETY
• IMPORTANCE OF BUSINESS LAW FOR ELIMINATION OF
CONCENTRATION OF WEALTH AND DISTRIBUTION OF
RESOURCES
• CONCLUSION
• BIBLIOGRAPHY
INTRODUCTION
The Directive Principles of the State Policy (DPSP) has been enumerated under Part IV of the
Indian Constitution from Articles 36 to 51. The drafters/ framers of the Indian Constitution
have taken this concept of the Directive Principle of the State Policy (DPSP) from the Irish
Constitution, 1937 which has further borrowed the said concept from the Spanish
Constitution. As rightly said by Dr. B.R Ambedkar, these Directive Principles of the State
Policy (DPSP) form the novel feature of the Indian Constitution. The Fundamental Rights
along with the Directive Principles are the heart and soul of the Indian Constitution.
DIRECTIVE PRINCIPLES BASED ON SOCIALIST PRINCIPLES
Article 38: The State shall strive to promote the welfare of the people by securing and
protecting a social order by ensuring social, economic and political justice and by minimising
inequalities in income, status, facilities and opportunities.
Articles 39: The State shall in particular, direct its policies towards securing:
* Right to an adequate means of livelihood to all the citizens.
* The ownership and control of material resources shall be organised in a manner to serve the
common good.
* The State shall avoid concentration of wealth in a few hands.
* Equal pay for equal work for both men and women.
* The protection of the strength and health of the workers.
* Childhood and youth shall not be exploited.
Article 41: To secure the right to work, to education and to public assistance in cases of
unemployment, old age, sickness and disability.
Article 42: The State shall make provisions for securing just and humane conditions of work
and for maternity relief.
Article 43: The State shall endeavour to secure to all workers a living wage and a decent
standard of life.
Article 43A: The State shall take steps to secure the participation of workers in the
management of industries.
Article 47: To raise the level of nutrition and the standard of living of people and to improve
public health.
CONCENTRATION OF WEALTH
Concentration of wealth means income inequality per se (i.e., the gap between the rich and
the poor), but rather is based on the World Bank's measure of 'shared prosperity' -the share of
the bottom 40 percent of the income distribution increasing faster than the average. wealth
inequality goes overlooked despite being one of the major drivers of disparities across the
world.
Many studies have shown that wealth inequality is even deeper and more pernicious than
income inequality. According to estimates by the Credit Suisse Research Institute, the bottom
half of the global population own less than 1 percent of total wealth. In sharp contrast, the
richest 10 percent hold 88 percent of the world's wealth, and the top 1 percent alone account
for 50 percent of global assets.
Credit Suisse (2017), p. 110, figures for 2017. As Branko Milanovic writes, "wealth
inequality is even more extreme [than income inequality] for every country for which we
have reliable data". Milanovic (2018). These disparities also reinforce each other, as wealth
typically generates income: in 2014, 67.4 percent of the pretax income of the top 0.1 percent
in the USA was income from wealth (capital gains, interest, dividends, etc.). In most
emerging and rich countries the wealth share of the top 1 percent has been rising steadily
over the last two to three decades
DISTRIBUTION OF RESOURCES
Resource allocation is the process of assigning and managing assets in a manner that supports
an organization's strategic planning goals.
Apportionment of productive assets among different uses. Resource allocation arises as an
issue because the resources of a society are in limited supply, whereas human wants are
usually unlimited, and because any given resource can have many alternative uses.
In free-enterprise systems, the price system is the primary mechanism through which
resources are distributed among the uses most desired by consumers. In planned economies
and in the public sectors of mixed economies, the decisions regarding resource distribution
are political. Within the limits of existing technology, the aim of any economizing agency is
to allocate resources in a manner that obtains the maximum possible output from a given
combination of resources.
ARTICLE 39 OF THE INDIAN CONSTITUION
Article 39 of the Indian Constitution, specifically deals with the provisions or principles of
policy that shall be undertaken by the state. Article 39 contains six sub-clauses, that are:
1. That all the citizens irrespective of their sex whether men or women shall equally have the
right to adequate means of livelihood. Article 39(a)
2. That the resources and the ownership of those resources and materials shall be distributed
in such a way that it fulfils the common goal. Article 39(b)
3. That the economic system shall be executed in such a way that the concentration of wealth
and means of production shall not result in a common detriment. Article 39(c)
4. That equal pay for equal work shall be promoted. Article 39(d)
5. That the health and strength of workers irrespective of whether men, women or children
shall not be abused or manipulated. Further, economic necessity/condition shall not be the
reason for entering such avocation that is unsuitable for specific age or strength. Article 39(e)
6. That appropriate opportunities shall be given to children that would help them in building
in a healthy manner, and in the condition of freedom and dignity. Further, childhood and
youth shall be protected from any kind of exploitation and against moral and material
abandonment. Article 39(f)
The sole purpose of this Article is to ensure that the people or the citizens of India are
provided with adequate means of livelihood, fair distribution of wealth, equal pay for equal
work, protection of children and labour. The responsibility of ensuring all this is upon the
[Link] expression 'material resources' in Article 39 (b) means all things which are capable
of producing wealth for the community. Everything of value or use in the material world is
material resource and the individual being a member of the community, his resources are part
of those of the community. 11 It is wide enough to cover not only natural or physical
resources, but also movable or immovable property, such as land, building, workshop,
vehicles, etc.2
1. State of Karnataka v. Ranganatha Reddy, AIR 1978 SC 215
2. State of Tamil Nadu v. Abu Kavur Bai, AIR 1984 SC 326
'Material Resources' under Article 39 (b) covers the land held by private owners also. Such
private land can be acquired by Government for public purposes such as for developing,
constructing houses, and providing public amenities like shopping complexes, parks, roads,
drains, playgrounds etc.3
The essence of Article 39 has been enumerated under sub-clauses (b) and (c).
Article 39(b) and (c) deals with ensuring a welfare society and the promotion of an
egalitarian society. In Kesavananda Bharati v. The State of Kerala4 the Supreme Court of
India stated that in the process of development in any field like social, economic, and
political, then such development shall not be in contravention to the individual's right to
dignity. Hence, here the Supreme Court observed that even the framers of the Indian
Constitution were of the opinion that to not have such a society where the individuals have
not ensured any sort of dignity.
In a landmark Supreme Court judgement of The State of Bihar v. Kameshwar Singh5 the
Hon'ble Court explicitly held that any legislation that aims at doing away with the
concentration of wealth/land in the hands of a few and promotes an egalitarian approach
would be beneficial for the society as a whole and this would encourage an inclusive
development that would further the cause as enumerated under the Article 39(b) and (c) of
the Indian Constitution.
The Hon'ble Court under the Assam Sillimanite Ltd. v. Union of India6 explained what is
"material resources of the community" that has been mentioned under Article 39(b) of the
Indian Constitution. The Court said, the above-mentioned term means and includes all those
things that are apt of creating wealth for the community as a whole.
In the above-mentioned case, the Supreme Court held that any Act, legislation, etc. which
aims at expanding the production and supply of the refractories in order to meet the crucial
demand of the iron and steel industry is well protected under Article 39(b) of the Indian
Constitution.
Moreover, the "material resources of the community" subsume not only those resources
which are already vested in the hands of the state rather also those which are in the hands of
private individuals as laid down in the case of Sanjeev Coke Mfg.
3. State of Maharashtra v. Basantibai M. Khetan, (1986) 2SCC 516
4. AIR 1973
5. AIR 1952
6. AIR 1992 SC 938
Co. v. Bharat Coking Coal Ltd. (1982) and again reiterated in Tinsukhia Electric Supply Co.
Ltd. v. State of Assam (1989).
State of Tamil Nadu v. Abu Kavur Bai7, the court upheld the validity of a law enacted for the
nationalisation of transport services in the State on the ground that it was for giving effect to
the directive principles contained in Article 39 (b) and (c). A nationalisation scheme meant
for the purpose of distribution or preventing concentration of wealth; as in the instant case,
must have sufficient nexus to attract the operation of Article 39 (b) and (c). The Tamil Nadu
Act is valid as it subserves nationalisation policy.
Taxation of capital and wealth has been held to be an appropriate method for preventing the
concentration of wealth as envisaged by Article 39(c).8 Legislation for agrarian reforms and
abolition of Zamindari system have been held to be covered by Articles 39(b) and 39(c). 9
GOVERNMENT SCHEMES ADOPTED FOR THE WELFARE OF
SOCIETY
Hence, over the years, various schemes and policies have been adopted by the government
for ensuring inclusivity, welfare society, etc., some of them are:
1. Pradhan Mantri Shram Yogi Maan-Dhan Yojana
The abovementioned Yojana aims at providing social security to employees who are engaged
as street vendors, agriculture-related aspects, construction workers, rickshaws, auto wheelers,
rag pickers, etc. the aim is to promote inclusivity in the society.
2. Pradhan Mantri Rozgar Protsahan Yojana
The Yojana aims at encouraging employment in society for the unskilled and semiskilled
workers by providing incentives to the employers.
3. Aam Aami Bima Yojana
It is a social security scheme that aims at providing insurance cover to all those workers who
fall under rural landless households.
4. Atal Beemit Vyakti Kalyan Yojana
The Yojana furnishes monetary support to all those employees who for any reason have got
unemployed.
5. Central Sector Scheme for Rehabilitation of Bonded Labourer, 2016
This central scheme aims at identifying and rehabilitating the bonded labour under which the
7.( 1984) 1 SCC 516
8. Asstt. Commissioner v. B & Co., AIR 1970, SC 169
[Link] of Bihar v. Kameshwar Singh, AIR 1952, SC 252
central government would provide monetary assistance.
6. Gatidhara Scheme for Self-Employment
This is a state-specific scheme launched in the State of West Bengal. This scheme aims at
providing employment to all those youths who have got unemployed.
7. Grant in Aid Scheme to NGOs for Welfare of Women Labour
This scheme aims at educating women about their rights. The scheme will furnish funds in
favour of all those NGOs, institutions and organisations that are established for the welfare of
women.
8. Rashtriya Swasthya Bima Yojana
The scheme will provide socio-economic security to Below Poverty Line (BPL)
workers.
9. Revised Integrated Housing Scheme
This is an integrated housing scheme that aids workers working in mines like iron, mica,
limestone, etc. with housing facilities. The only condition for availing of this scheme is that
the beneficiary must not be having any pucca house already.
10. Garib Kalyan Rozgar Yojana
This scheme was an outcome of the COVID-19 pandemic under which the government aims
at promoting employment opportunities to all those migrant workers who have got displaced
and further providing them the funds to re-establish their ventures.
11. Deen Dayal Upadhyaya Antodaya Yojana
The purpose of Deen Dayal Upadhyaya Antodaya Yojana (DAY) is to skill and train people
residing in rural as well as urban areas. The chief purpose of the scheme is to expand and
generate more and more employment and further provide funds to people so that they can set
up their ventures.
Why Is Business Law so Important for elimination of concentration of
wealth and distribution of resources
Business law is an important topic to understand due to how intertwined business transactions
are with society. What are the ways how we reduce the income disparity and how the
resources are distributed among different sections of the society. Any regulation or legal
rights that affect employers, employees, and consumers, as well as how businesses interact
internationally, are considered topics of business law. Concepts like employment and
property rights fall under business law. That knowledge can help find which laws and
regulations are the most effective at accomplishing an intended goal, as laws change per
state.
Taxation and income transfers to the poorest segment of society are the most direct way to
keep inequality in check and reduce poverty in the short term. These instruments are
particularly appropriate when the benefits of growth fail to reach the poor.
Income redistribution will lower poverty by reducing inequality, if done properly.
But it may not accelerate growth in any major way, except perhaps by reducing social
tensions arising from inequality and allowing poor people to devote more resources to human
and physical asset accumulation. Directly investing in opportunities for poor people is
essential. Transfers to the poor should not consist merely of cash; they should also boost
people's capacity to generate income, today and in the future. Education and training as well
as access to health care, micro-credit, water, energy, and transportation are powerful
instruments. Social assistance is critical to prevent people from falling into poverty traps
when adverse shocks hit. Programs such as India's Mahatma Gandhi National Rural
Employment Guarantee, in which the state acts as the employer of last resort, do precisely
that.
Research shows that higher wages for the lowest-paid workers has the potential to help nearly
4.6 million people out of poverty and add approximately $2 billion to the nation's overall real
income. Additionally, increasing the minimum wage does not hurt employment nor does it
retard economic growth.
Policies that encourage higher savings rates and lower the cost of building assets for
working- and middle-class households can provide better economic security for struggling
families. New programs that automatically enrol workers in retirement plans and provide a
savings credit or a federal match for retirement savings accounts could help lower-income
households build wealth. Access to fair, low-cost financial services and home ownership are
also important pathways to wealth.
Conclusion
Article 39 of the Indian Constitution make sure that the state while or before framing the
policies, regulations, etc. shall put due consideration on ensuring adequate means of
livelihood to every person irrespective of the fact that such person is a male or female, equal
pay for equal work shall be promoted that aims at curbing the stereotype behaviour of the
society towards the women, the employees shall be protected or safeguarded from any kind
of exploitation, due consideration shall be made on the health of children and further ensuring
enough opportunity to the youths for their development.
The only loophole that can be mentioned here is the non-inclusivity of other genders within
the scope of Article 39 of the Indian Constitution as it includes only
males and females.
REFERENCES
• Constitutional Law of India by DR. J. N. Pandey
• Constitutional Law of India by Narender Kumar
• [Link]
ate_policy/articles
• [Link]
dpsp
• [Link]
• [Link]
