World Inequality Report 2022

According to the recently released World Inequality Report by France-based World Inequality Lab, India is now among the most unequal countries in the world.

Context

According to the recently released World Inequality Report by France-based World Inequality Lab, India is now among the most unequal countries in the world.

Key-highlights of the Report

• India stands out as a poor and very unequal country, with the top 1% of the population holding more than one-fifth of the total national income in 2021 and the bottom half just 13%.
• The average national income of the Indian adult population is ?2,04,200. While the bottom 50% earns ?53,610, the top 10% earns more than 20 times (?1,166,520).
• “While the top 10% and top 1% hold respectively 57% and 22% of total national income, the bottom 50% share has gone down to 13%. 
• “India stands out as a poor and very unequal country, with an affluent elite.
• An average household wealth in India stands at ?983,010.
• It observed that the deregulation and liberalisation policies implemented since the mid-1980s have led to “one of the most extreme increases in income and wealth inequality observed in the world”.
• The report shows that the income inequality in India under the British colonial rule (1858-1947) was very high, with a top 10% income share around 50%.
• After independence, due to socialist-inspired five-year plans, this share was reduced to 35-40%.
• Owing to poor post-Independence economic conditions, India embarked upon deregulation and loosening controls in the form of liberalization policies.
• Gender inequality in India is also considered on the higher end of the spectrum.
• The share of female labor income share in India is equal to 18% which is significantly lower than the average in Asia (21%, excluding China) & is among the lowest in the world.
• However, a significant increase has been observed since 1990 (+8 p.p.) but it has been insufficient to lift women’s labor income share to the regional average.