India’s top 1% of the population holds more than one-fifth of the total national income in 2021, while the bottom fifty per cent is just 13%, according to a report.
The report, titled ‘World Inequality Report 2022’, authored by Lucas Chancel, co-director of the World Inequality Lab, and coordinated experts like French economist Thomas Piketty.
The report also said that India is now one of the most unequal countries in the world. The report drew out that the average national income of the Indian adult population stands at ₹2,04,200. While the bottom 50% only earns ₹53,610, 20 times less than what the top 10% earns (₹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,” it said.
According to the report, the average Indian household wealth is ₹983,010. It noted that deregulation and liberalization policies introduced in the mid-1980s resulted in creating “one of the most extreme increases in income and wealth inequality observed in the world”.
It also said gender inequality in India is quite high “The female labour income share is equal to 18%. This is significantly lower than the average in Asia [21%, excluding China],” the report said, adding that this value counts as one of the lowest in the world, slightly above the average share in the Middle East (15%).
The world map of inequalities shows that national average income levels are not the correct predictors of inequality in high-income countries, it is very unequal in countries like the U.S, while other countries like Sweden, it is relatively equal.
“The same is true among low- and middle-income countries, with some exhibiting extreme inequality [Brazil and India], somewhat high levels (China) and moderate to relatively low levels [Malaysia, Uruguay],” it said.
The report observed income and wealth inequalities rose since the 1980s, after the introduction of deregulation and liberalization programs which worked differently in different countries.
“The rise has not been uniform: certain countries have experienced spectacular increases in inequality [including the U.S., Russia and India] while others [European countries and China] have experienced relatively smaller rises,” it said.
The report pointed out that in 2021, after 30 years of trade and financial globalization, global inequalities remain extremely high.
“They are about as great today as they were at the peak of Western imperialism in the early 20th century,” it said. Lucas Chancel, a lead author of the report, said the Covid crisis has further aggravated the inequalities between the very wealthy and the rest of the population. “Yet, in rich countries, government intervention prevented a massive rise in poverty, this was not the case in poor countries. This shows the importance of social status in the fight against poverty,” he said.