oppn parties Income & Wealth In India: A Deep Divide

News Snippets

  • In a first, the Supreme Court recognizes marital rape, although for the limited purpose of allowing married women the right of abortion up to 24 weeks if they conceived as a result of forced sex by their husbands
  • Air India cuts discounts on base fare to students and senior citizens from 50% to 25%
  • Mallikarjun Kharge and Digvijay Singh are being touted as frontrunners to take on Shashi Tharoor in the elections for the post of Congress president
  • Sonia Gandhi will decide who will be Rajasthan CM if she feels there is a need to change guard after the near-rebellion by MLAs in the state
  • Ashok Gehlot bowed out of the race for being Congress president after meeting Sonia Gandhi
  • India has moved to the 40th spot in the innovation index, up 6 spots from last year
  • DGGI has alleged that top insurance companies, banks and NBFCs has committed a fraud of Rs 800cr by claiming input tax credit without underlying supplies
  • The Centre will borrow Rs 10000cr less than planned earlier due to good revenue collections
  • At $23.9bn, India's current account deficit widened to 2.8% in Q1, the worst in four years
  • Stocks continue to flounder on Thursday: Sensex sheds 188 points to 56409 and Nifty 40 points to 16818
  • The 36th National Games were declared open on Thusrday by PM Modi in front of a record crowd in Motera near Ahmedabad
  • Jasprit Bumrah most likely to miss T20 World Cup due to recurrence of back injury
  • PFI's political wing, the SDPI is on EC radar and action will follow soon if discrepancies are detected
  • Ashok Gehlot to meet Sonia Gandhi today, says all issues will be sorted out soon
  • Referring to the PFI ban, most Muslim organizations ask the government to take similar action against right wings organizations like the RSS, Bajrang Dal, VHP and the like
In a landmark order, Supreme Court rules that all women, married or unmarried, are entitled to safe and legal abortion up to 24 weeks of pregnancy as per the MTP Act
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Income & Wealth In India: A Deep Divide

By Linus Garg
First publised on 2021-12-10 09:50:23

About the Author

Sunil Garodia Linus tackles things head-on. He takes sides in his analysis and it fits excellently with our editorial policy. No 'maybe's' and 'allegedly' for him, only things in black and white.

Income and wealth inequalities in India were historically always skewed in favour of the rich but the chasm is deepening at an alarming speed. The latest World Inequality Report 2022 describes India as nation that is a very "poor and very unequal country, with an affluent elite". That has always been the case with India but now the worry is that the difference between the rich and the poor, including the middle class, is growing and growing at a fast pace. The poor are earning less and accumulating nothing (most of them are in fact selling assets or breaking saving instruments to make ends meet) while the rich are earning more and accumulating hugely. The inequality in India is so high that it adversely affects global calculations: if India's figures are removed from the calculations, the share of the bottom 50% across the globe actually rises.

In India, the top 10 percent hold 57 percent and the top 1 percent 22 percent of total national income while the bottom 50 percent share has gone down to 13 percent. The middle classes hold just 29.5 percent. In a poor country like India, if 10 percent of the people still hold more than 50% of the national income, it shows that policy intervention has not made much difference to the lives of the poor who continue to remain poor or have become poorer. The fact that out of the top ten percent just one percent hold 22 percent of the national income also shows that there is a huge divide even among the rich and the superrich are earning and accumulating wealth like never before. There were independent reports earlier which had also shown that the superrich across the world including India have increased their wealth phenomenally during the pandemic.

With the GDP not growing as per expectations in the last few years, the economy has taken a beating. The income of the middle classes and the poor has suffered as a result. Then, interventions such as demonetization and the implementation of the GST have dealt strong negative blows to the informal economy, further reducing income and opportunities for these classes. Then the pandemic happened, further squeezing incomes and opportunities. The government must learn the right lessons from these figures and try to address the inequalities by making policy interventions that offer income opportunities to the poor while offering them access to quality healthcare and education.