Areport by World Inequality Lab shows that wealth of the top 1% of the country’s population have hit historical highs,
Credit: Reuters Photo
New Delhi: India has now become more unequal in terms of wealth concentration than the British colonial period as income and wealth of the top 1% of the country’s population have hit historical highs, a report by World Inequality Lab shows.
The top 1% of the population controlled 40.1% of the national wealth in 2022-23, while at the time of independence it was less than 15%. The share of these top 1% of the population in the national income jumped to 22.6% during the financial year 2022-23, the report, released on Wednesday, stated.
“Inequality declined post-independence till the early 1980s, after which it began rising and has skyrocketed since the early 2000s,” the report from the Paris-based organisation, titled ‘Income and Wealth Inequality in India, 1922-2023’, said.
“The ‘Billionaire Raj’ is now more unequal than the British Raj,” stated the report, co-authored by economists Nitin Kumar Bharti, Lucas Chancel, Thomas Piketty and Anmol Somanchi.
Between 2014-15 and 2022-23, the rise of top-end inequality has been particularly pronounced in terms of wealth concentration. By 2022-23, top 1% income & wealth shares (22.6% & 40.1%) are at their highest historical levels globally and India’s top 1% income share is among highest in the world, higher than even South Africa, Brazil and the United States, the report noted.
In terms of income inequality, India is behind only perhaps Peru, Yemen & a couple of other small countries. “While there is no reason to believe inequality will slow down by itself, evidence suggests it can be kept in check via policy,” it said.
The paper underlined that there is evidence to suggest the Indian tax system might be “regressive when viewed from the lens of net wealth”.
A restructuring of tax code to account for both income and wealth, and public investments in health, education & nutrition are needed to enable average Indian,to meaningfully benefit from the wave of globalisation, it said. The paper suggested that a “super tax” of 2% on the net wealth of 167 wealthiest families in 2022-23 would yield 0.5% of national income in revenues.
Income concentration among the top 10% of the population has a similar trend as that among the top 1%. Between 1950-1980, the top 10% population’s income shares declined from 40% at the turn of independence to just about 30% by 1982. In the wake of the liberalisation reforms of 1991, top 10% shares started galloping and reached 60% by 2022.