The cold truth about India’s income inequality

The cold truth about India’s income inequality


  • The latest edition of the World Inequality Report has confirmed that the world continues to sprint down the path of inequality.

Status of inequality

  • The top 1% took 38% of all additional wealth accumulated since the mid-1990s, whereas the bottom 50% captured just 2% of it.”
  • The foreword by Nobel laureate economists, Abhijit Banerjee and Esther Duflo, says, “India is now among the most unequal countries in the world.”
  • This means that the gap between the top 1% and the bottom 50% is widest for India among the major economies in the world.
  • The latest World Inequality Report firmly concludes that the “bottom 50% share has gone down to 13%. India stands out as a poor and very unequal country, with an affluent elite”.

To Know about World Inequality Report 2022: Click Here

Poverty has persisted

  • The journey of this inequality over time reveals that “socialist-inspired Five Year plans contributed” to reducing the share of the top 10% who had 50% of the income under colonial rule, to 35%-40% in the early decades after Independence.
  • In the Nehruvian years — and after that too — a bid was made to battle the basic absence of social democracy in India, but it remained confined to States and regions. 

    income inequality
    Credit: TH
  • Since the mid-1980s, deregulation and liberalisation policies have led to “one of the most extreme increases in income and wealth inequality observed in the world”.
    • While the top 1% has majorly profited from economic reforms, growth among low- and middle-income groups has been relatively slow, and poverty has persisted.
  • Post-2014, seems to have got into a phase of an even greater reliance on big business and privatisation to fix economics and the result has been to beget even more inequality.

‘One size nation’ is flawed

  • With the Union government’s now-stated policy to prioritise members of one religion and one language, has severe economic consequences too and the widening income inequality only reflects that.
  • The quick descent into a ‘One size nation’, does not fit its many diversities.
  • The avenues available for all kinds of citizens to make a life, informal if not formal, is deeply inhibited by India’s social fabric being torn by the Government’s new priorities and policies.
  • Far from pushing for social and economic equality, which can be done by dismantling old shibboleths in which India’s rank social and economic inequalities are anchored, the state is now fanning systems and principles to further them.
  • Criminalising the freedom of religion and choices, which is what the Indian compact is based on, by hunting out the diverse, mixed or cosmopolitan as inauthentic has consequences, both social and economic.
  • B.R. Ambedkar had issued a grim warning in 1949 that if we continue to deny social and economic inequality for long, we could “blow up the structure of political democracy”.


  • Choices are made and destinies created. By choosing to reverse the idea of modernisation, linking religion firmly into the public sphere, trying to unmake the modernity India had tried to set for itself as an ideal, we may be already setting ourselves on a narrow path which ends in places that scores of nations in the world and several in our neighbourhood have already arrived at, only to their peril and dismay.

Source: The Hindu

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