Asia's two richest men Reliance Industries' Mukesh Ambani (right) and Adani Group's Gautam Adani are Indian.
(Credit: Reuters Photos)
New Delhi: The wealth concentrated in the richest 1 per cent of India's population is at its highest in six decades and the percentage share of income exceeds that of countries including Brazil and the United States, the research group, World Inequality Lab, found.
By the end of 2023, India's richest citizens owned 40.1 per cent of the country's wealth, the highest since 1961, and their share of total income was 22.6 per cent, the most since 1922, said the study.
Since India, which won its independence in 1947 from Britain, opened its markets to foreign investment in 1992, its number of billionaires has surged. The paper titled 'Income and Wealth Inequality in India, 1922-2023: The Rise of the Billionaire Raj' said between 2014-15 and 2022-23, the rise of top-end inequality has been particularly pronounced in terms of wealth concentration.
The paper was authored by Thomas Piketty (Paris School of Economics and World Inequality Lab), Lucas Chancel (Harvard Kennedy School and World Inequality Lab) and Nitin Kumar Bharti (New York University and World Inequality Lab). "The 'Billionaire Raj' headed by India's modern bourgeoisie is now more unequal than the British Raj headed by the colonialist forces," the authors said.
"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 per cent income and wealth shares (22.6 per cent and 40.1 per cent) are at their highest historical levels and India's top 1 per cent income share is among the very highest in the world, higher than even South Africa, Brazil, and the US," the paper said.
According to the paper, the Indian income tax system might be regressive when viewed from the lens of net wealth.
"A restructuring of the tax code to account for both income and wealth, and broad-based public investments in health, education and nutrition are needed to enable the average Indian, and not just the elites, to meaningfully benefit from the ongoing wave of globalisation," it noted.
As per the paper, besides serving as a tool to fight inequality, a "super tax" of 2 per cent on the net wealth of the 167 wealthiest families in 2022-23 would yield 0.5 per cent of national income in revenues and create valuable fiscal space to facilitate such investments.
The paper said the quality of economic data in India is notably poor and has seen a decline recently.
It said India's top 1 per cent population's income share appears to be among the highest in the world "behind only perhaps Peru, Yemen and a couple of other small countries".
"In terms of top wealth shares, we see that both with top 10 per cent and top 1 per cent, India comes out in the middle of the pack, with Brazil, and South Africa standing out with their extreme wealth concentration levels (85.6 per cent and 79.7 per cent top 10 per cent shares, respectively)," the paper said.
In 2014, Prime Minister Narendra Modi was elected on a mandate for development and economic reforms. His critics say his last two terms in office have been characterised by a widening gap between rich and the rural poor as India's economy grew at 8.4 per cent, its fastest in one-and-half years, in the final three months of 2023.
India's main opposition party Congress has raised the issue of Modi's government's closeness to billionaires in rallies ahead of national polls starting from April 16.
The World Inequality Lab said factors, including a lack of education has trapped some people in low-paid jobs and depressed the growth of the bottom 50 per cent and middle 40 per cent of Indians.
Data from Forbes billionaire rankings show the number of Indians with net wealth exceeding $1 billion rose from one in 1991 to 162 in 2022. Asia's two richest men Reliance Industries' Mukesh Ambani and Adani Group's Gautam Adani are Indian.
The 10,000 wealthiest individuals of the 92 million Indian adults own an average of 22.6 billion rupees ($271.91 million) in wealth, 16,763 times the country's average, while the top 1 per cent possessing an average of 54 million in wealth.
In December, the Indian government's chief economic adviser said subsidised grain distribution, spending on education and health, and direct cash transfers via a rural jobs scheme have helped to distribute income more equally.
(With Reuters inputs)