In the following ways, Democracy has been able to reduce inequality and poverty: 1. Democracy gives equal rights to the people; it does not discriminate on the basis of sex, religion, color, caste etc.  2. Democracy promotes the redistributive mechanism for conveying financial benefits on the grounds of the necessity of any section of the community, this directs to a more equal division of privileges to under privilege which overcomes poverty. 3. Democracy provides a proper atmosphere for organizational activism which commences to the same opportunity to increase the interests of impoverished people. 4. In order to reduce poverty and inequality democracies made efforts to promote a more transparent form of government and thus provide people with rights such as Right to Information etc. 5. Governments can intervene to promote equity, and reduce inequality and poverty, through the tax and benefits system. This means employing a progressive tax and benefits system which takes proportionately more tax from those on higher levels of income, and redistributes welfare benefits to those on lower incomes.