A new working paper by World Inequality Lab, a Paris-based research organisation, has come out with estimates that suggest that economic inequality in India has “skyrocketed since the early 2000s”. The paper titled “Income and Wealth Inequality in India, 1922-2023: The Rise of the Billionaire Raj” states that “the ‘Billionaire Raj’ headed by India’s modern bourgeoisie is now more unequal than the British Raj headed by the colonialist forces”. It ends with a warning: “It is unclear how long such inequality levels can sustain without major social and political upheaval.”
Indeed, the data quoted in the paper is sobering. The four authors, including Thomas Piketty, claim to have combined national income accounts, wealth aggregates, tax tabulations, billionaire rankings, rich lists, and surveys on income, consumption and wealth to create data series going back to 1922 for income inequality and 1961 for wealth inequality. On the income inequality front, their calculations suggest that in 2022-23, 22.6 per cent of India’s national income went to just the top 1 per cent; this is the highest level recorded in the data series since 1922 — higher than even during the inter-war colonial period.
If these assessments are correct, the authors’ policy prescriptions — such as a super tax on Indian billionaires and multimillionaires, restructuring the tax schedule to include both income and wealth etc — might sound reasonable. But that is a big if. That’s because some other economists look at data and reach exactly the opposite conclusions. For instance, in a recent article, economists Surjit Bhalla and Karan Bhasin look at the latest consumption expenditure survey results to say that India has registered an “unprecedented decline in both urban and rural inequality” between 2011-12 and 2022-23. Clearly, the issue of economic inequality requires a deeper inquiry and a broader debate.
