Income inequalities are not feasible under the system of parliamentary democracy and the political climatic prevailing in such countries. The policy of raising profits to increase savings for capital formation may lead to social unrest and may even fail to produce socially desirable investment since the profit making classes are not necessarily increased in the welfare of the masses. Thus income inequalities may hamper economic development. On the other hand, the perpetuation of income inequalities brings more harm to the economy. Inequalities retard development.
