According to the recently released World Inequality Report 2022, India is now among the most unequal countries in the world.

India has emerged as a poor and “very unequal” country, according to the latest report released by the World Inequality Lab. The bottom half of the Indian population owns “almost zero” of the national wealth, claimed the report authored by senior economists including France’s Thomas Piketty.

what report says globally

The report finds that global inequality today is back to where it was in the early 20th century. The richest 10% of the global population takes home 52% of the global income, whereas the poorest 50% got only 8.5% of it. Global wealth inequities are worse than income inequalities. While the poorest 50% own just 2% of the global wealth, the richest 10% own 76% of all the wealth. While Europe was the region with the least amount of inequality (the income share of the top 10% was 36%), inequality was highest in the MENA (Middle East and North Africa (MENA) region, where the share of the top 10% was 58%.

what report says for India

The report has found India to be one of the world’s most unequal regions, with the top 1% getting 21.7% of the national income. Top 10% of Indians capture 57% of the national income, while the share of the bottom 50% is only 13%. While the average national income of the bottom 50% stood at ₹53,610, the top 10% earned more than 20 times more, ₹11,66,520. For comparison, this ratio in the case of France and Germany was 7 and 10 respectively.

The report reveals that income inequality in India today is worse than it was under British rule. Under the British (1858-1947), the top 10% got about 50% of the national income (lower than today’s 57%). In the decades after India got independence, socialistic economic policies reduced income inequality, bringing the share of the top 10% to 35-40%. But starting from the 1980s, the report states, “deregulation and liberalization policies have led to one of the most extreme increases in income and wealth inequality observed in the world.

What report says about wealth inequality and gender?

NOTE :Income refers to the money received or earned on a continuous basis, as a return for work or investments
Wealth implies money or valuable possession accumulated by a person during the course of his life.

Wealth inequality in India is even worse than income inequality. The bottom 50% own “almost noth”, with an average wealth of ₹66,280, while the middle class was also “relatively poor”, with an average wealth of ₹7,23,930. However, the top 10% and 1% owned on average ₹63,54,070 and ₹3,24,49,360 respectively. The top 1% owned 33% of national wealth in India.

The report also notes that the female labour income share in India is 18%, one of the lowest in the world. This is lower than both the Asian average (21%) and barely above the average in the Middle East (15%), pointing to high gender inequality in India.

Suggestions :

• The report suggested levying a reasonable progressive wealth tax on multimillionaires.
• Given the large volume of wealth concentration, modest progressive taxes can generate significant revenues for governments.

World Inequality Lab
It is a research laboratory focusing on the study of inequality worldwide. The WIL hosts the World Inequality Database, the most extensive public database on global inequality dynamics.
It gathers social scientists committed to helping everyone understand the drivers of inequality worldwide through evidence-based research.

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