Inequality in India

INDIA’S impressive march as the world’s fastest-growing major economy is facing a big stumbling block — inequality. The wealth share of the top

1 per cent of the population was as high as 40.1 per cent in 2022-23, according to a working paper titled ‘Income and Wealth Inequality in India, 1922-2023: The Rise of the Billionaire Raj’. The paper has been authored by four economists working for the World Inequality Lab, a global research centre, and other institutions. According to the authors, India’s top

1 per cent population’s income share ‘appears to be among the highest in the world’.

The paper says that the rise of ‘top-end inequality’ has been particularly pronounced between 2014-15 and 2022-23 in terms of wealth concentration. In short, India’s rich are getting richer, and that too at an increasingly fast rate. This raises questions about the government’s much-touted slogan on all-round development and leaving no one behind — Sabka Saath, Sabka Vikas. The authors have rightly suggested that a restructuring of the tax system to account for both income and wealth, and broad-based public investments in health, education and nutrition are needed to enable the average Indian to meaningfully benefit from globalisation.

The creation of adequate remunerative jobs holds the key to reducing poverty and inequality. To this end, India needs to grow at 8 per cent on a sustained basis, as per Krishnamurthy Subramanian, executive director (India), International Monetary Fund. The country’s economy grew by a better-than-expected 8.4 per cent in the October-December quarter of 2023 — the fastest pace in a year and a half. Even as the NITI Aayog has claimed that 25 crore Indian citizens were lifted out of multidimensional poverty in nine years (2013-14 to 2022-23), a lot needs to be done to make India a less unequal country.