Top 10% has 57% of India's national income: World Inequality Report
20 December 2021
India continues to be a poor country and one of the most unequal countries in the world, with top 10 per cent of its population holding 57 per cent of national income, says World Inequality Report 2022.
Stating India's position as a ‘poor and very unequal country, with an affluent elite’, the report said the top 1 per cent of the population holds more than one-fifth of the total national income in 2021 while the bottom half holds just 13 per cent.
The report was authored by Lucas Chancel, co-director of the World Inequality Lab, and coordinated by several experts, including French economist Thomas Piketty, according to the news agency PTI.
According to the report, the average annual income of the Indian adult is Rs204,200. While the bottom 50 per cent earns Rs53,610, the top 10 per cent earns more than 20 times (Rs1,166,520).
"While the top 10 per cent and top 1 per cent hold 57 per cent and 22 per cent, respectively, of total national income, the share of the bottom 50 per cent has gone down to 13 per cent,” the report states.
The average household wealth in India stands at Rs983,010, according to the report.
The report also states that gender inequalities in India are very high.
"The female labour income share is equal to 18 per cent. This is significantly lower than the average in Asia (21 per cent, excluding China)," the report said, adding that this value is one of the lowest in the world, slightly higher than the average share in the Middle East (15 per cent).
What are the reasons behind inequality?
The report 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".
According to the report, income inequalities are not just among population within a country. After three decades of trade and financial globalisation, global inequalities remain extremely pronounced among countries of the world.
The world map of inequalities reveals that national average income levels are poor predictors of inequality -- among high-income countries, some are very unequal (such as the US), while others are relatively equal (Sweden).
"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 noted that income and wealth inequalities have been on the rise nearly everywhere since the 1980s, following a series of deregulation and liberalisation programmes that took different forms in different countries.
"The rise has not been uniform: certain countries have experienced spectacular increases in inequality (including the US, Russia, and India) while others (European countries and China) have experienced relatively smaller rises," it said.
"They are about as great today as they were at the peak of Western imperialism in the early 20th century," it said.
Lucas Chancel, the lead author of the report, said the COVID crisis has exacerbated 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.