The Growing Income and Wealth Inequality in India: 22 Mar 2024

Why in News:

• A new paper from the World Inequality Lab has highlighted a significant increase in the income and wealth shares of India’s top 1%, marking historical highs in 2022-23.

World Inequality Lab:

• Affiliation: Paris School of Economics.
• Objective: To foster research on global inequality dynamics.
• Network: Collaborates with over a hundred researchers worldwide, focusing on nearly seventy countries.

Key Insights:

• Dubbed “The Billionaire Raj,” the paper suggests that India’s inequality now surpasses that of the British Raj era.
• Income and Wealth Shares: In 2022-23, the top 1% of Indians held 22.6% of income and 40.1% of wealth, the highest levels ever recorded.
• Global Comparison: India’s top 1% income share is now among the world’s highest, surpassing South Africa, Brazil, and the US. However, India’s top 1% wealth share is lower than that of South Africa and Brazil.

Disparity Levels:

• Top 1%: Holds an average wealth of Rs 5.4 crore, 40 times the national average.
• Bottom 50%: Holds an average wealth of Rs 1.7 lakh, significantly below the national average.
• Middle 40%: Holds an average wealth of Rs 9.6 lakh, below the national average.
• Top ∼10,000 Individuals: Own an average of Rs 2,260 crore in wealth, which is 16,763 times the average Indian.