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India ‘very unequal’, top 10% hold 57% of national income: Inequality Report

The report has also flagged a drop in global income during 2020, with about half of the dip in rich countries and the rest in low-income and emerging regions.

population, world, indian express The global population is expected to reach its peak size in the 2080s around 10.4 billion people. Growth rates differ across countries. Today China is the world's populous country (1.426 billion) but its growth has been slowing down. (Photo: File/ Representational)

India stands out as a “poor and very unequal country, with an affluent elite”, where the top 10 per cent holds 57 per cent of the total national income while the bottom 50 per cent’s share is just 13 per cent in 2021, according to the latest World Inequality Report 2022.

The report has also flagged a drop in global income during 2020, with about half of the dip in rich countries and the rest in low-income and emerging regions. This is attributed primarily due to the impact of “South and Southeast Asia, and more precisely” India.

“When India is removed from the analysis, it appears that the global bottom 50 per cent income share actually slightly increased in 2020,” states the report authored by economist and co-director of the World Inequality Lab, Lucas Chancel, along with economists Thomas Piketty, Emmanuel Saez and Gabriel Zucman.

“While the top 10 per cent and top 1 per cent hold respectively 57 per cent and 22 per cent of total national income, the bottom 50 per cent share has gone down to 13 per cent. India stands out as a poor and very unequal country, with an affluent elite,” the report states.

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According to the report, India’s middle class is relatively poor with an average wealth of only Rs 7,23,930 or 29.5 per cent of the total national income, as compared with the top 10 per cent and 1 per cent who own 65 per cent (Rs 63,54,070) and 33 per cent (Rs 3,24,49,360), respectively.

The average annual national income of the Indian adult population is Rs 2,04,200 in 2021. The bottom 50 per cent earned Rs 53,610, while the top 10 per cent earned over 20 times more (Rs 11,66,520), the report states. The average household wealth in India is Rs 9,83,010, with the bottom 50 per cent owning almost nothing, with an average wealth of 6 per cent of the total Rs 66,280.

The share of top 10 per cent and bottom 50 per cent in pre-tax national income has remained broadly constant from 2014 onwards. For India, the quality of inequality data released by the Government has seriously deteriorated, making it particularly difficult to assess recent inequality changes, the report states.


As per the recent Multi-dimensional Poverty Index (MPI) prepared by Niti Aayog, one in every four people in India was multidimensionally poor. Bihar has the highest proportion of people (51.91 per cent of the state’s population) who are multidimensionally poor, followed by Jharkhand at 42.16 per cent and Uttar Pradesh at 37.79 per cent.

According to the inequality report, global inequalities seem to be about as great today as they were at the peak of Western imperialism in the early 20th century. The poorest half of the global population “barely owns any wealth” possessing just 2 per cent of the total, whereas the richest 10 per cent of the global population own 76 per cent of all wealth, it states.

The Middle East and North Africa (MENA) are the most unequal regions in the world, whereas Europe has the lowest inequality levels, the report says. In Europe, the top 10 per cent income share is around 36 per cent, whereas in MENA it is 58 per cent. In East Asia, the top 10 per cent makes 43 per cent of total income and in Latin America the share is 55 per cent.


According to the report, even as countries have become richer over the last 40 years, their governments have become significantly poorer, a trend which has been magnified due to the pandemic.

“The share of wealth held by public actors is close to zero or negative in rich countries, meaning that the totality of wealth is in private hands. This trend has been magnified by the Covid crisis, during which governments borrowed the equivalent of 10-20 per cent of GDP, essentially from the private sector,” it said.

The report has suggested levying a modest progressive wealth tax on multimillionaires. “Given the large volume of wealth concentration, modest progressive taxes can generate significant revenues for governments. In our scenario, we find that 1.6 per cent of global incomes could be generated and reinvested in education, health and the ecological transition,” it says.

In 2021, there were 62.2 million people in the world owning more than $1 million (measured at market exchange rates), the report states. Their average wealth was $2.8 million, representing a total of $174 trillion and a global effective wealth tax rate of 1.2 per cent could generate revenues of 2.1 per cent of global income, it says.

On gender terms, women’s share of total incomes from work (labour income) was about 30 per cent in 1990 and is less than 35 per cent now, the report states.


The report also notes that inequalities within countries are now greater than those observed between countries. At the same time, the gap between the average incomes of the top 10 per cent and the bottom 50 per cent of individuals within countries has almost doubled. “This sharp rise in within-country inequalities has meant that despite economic catch-up and strong growth in the emerging countries, the world remains particularly unequal today,” the report states.

Since the mid-1980s, deregulation and liberalisation policies have led to one of the most extreme increases in income and wealth inequality in the world, it said. “While the top 1 per cent has largely benefited from economic reforms, growth among low and middle income groups has been relatively slow and poverty persists,” it states.

First published on: 08-12-2021 at 04:17 IST
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