oppn parties Income & Wealth In India: A Deep Divide

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  • India's sovereign green bonds were oversubscribed four times as the RBI received 266 bids worth Rs 32892cr agaisnt the target of Rs 8000cr
  • Google tweaks its Android and India app store policy to allow manufacturers and users to choose certain things instead of compulsorily using Google apps after the CCI order and fine for unfairly dominating the market
  • Former US secretary of state calls former Indian external affairs minister Sushma Swaraj a "goofback" and a "hinterland political hack". MEA S Jaishankar slams him
  • Jamia screening of BBC documentary on Gujarat riots cancelled after the university was turned into a fortress and later 13 students were detained by the police
  • Supreme Court grants conditional interim bail for eight weeks to Lakhimpur Kheri accused Ashish Mishra. The bail can be further extended based on his conduct. He was asked to stay outside Delhi-NCR and UP and surrender his passport
  • After the JNU administration tried to thwart the students from screening the BBC documentary on the Gujarat riots and PM Modi, now students of Presidency and Jadavpur universities in Kolkata have decided to screen it 5 times next week
  • While a US research frim Hindenburg says its analysis found the Adani group overleveraged and claimed that its bubble will burst very soon and that sent the price of group companies crashing (Adani companies lost a combined Rs 55000cr), Adani group said the report was 'baseless' and 'malicious'
  • This time Enforcement Directorate arrests TMC spokesperson Saket Gokhale under PMLA for money laundering
  • Padma awards announced on Republic Day: Mulayam Singh Yadav, architect Balkrishna Doshi and ORS pioneer Dilip Mahalanobis get Padma Bibhushan posthumously, Padma Bhushan ius awarded to Kumar Mangalam Birla and 8 others and 91 get Padma Shri
  • Stocks fall big time on Wednesday on F&O expiry, finalncial and banks take big hit: Sensex tumbles 773 points to 60205 and Nifty 226 points to 17892 even as the market volatility meter shoots up by 8.51%
  • World Cup hockey: Germany stun England 4-3 to reach semifinals; Netherlands beat Korea 5-1 to enter last four
  • Australian Open: Sania Mirza and Rohan Bopanna reach the finals
  • Suryakumar Yadav is named ICC Cricketer of the Year 2022 and Renuka Singh gets the ICC Emerging Cricketer of the Year 2022 award
  • BCCI gets a whopping Rs 4670cr in the auctions for the 5 teams in WIPL or as it will be known now, WPL. Adani Sportline gets Ahmedabad for Rs 1289cr while Mumbai Indians get Mumbai for 913cr
  • Calcutta HC overturns the hookah bar ban in Kolkata by saying that it is not an illegal trade
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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.