oppn parties Income & Wealth In India: A Deep Divide

News Snippets

  • Supreme Court sentences Congress leader Navjot Singh Sidhu to one year rigorous imprisonment in the 1988 road rage case
  • Home Minister Amit Shah says rights should not be demanded before fulfilling responsibilities and that universities are no place to wage ideological battles
  • NIA court convicts JKLF chief Yasin Malik in terror funding case after he pleads guilty of all charges
  • A study backed by PM-EAC has recommended universal basic income and urban job guarantee and greater spend on social sector schemes
  • Supreme Court rules that the decisions of the GST Council are not binding on the Centre and the states, leaving the door open for states to levy further taxes
  • After sustained campaign by BJP MP Arjun Singh, the Centre today withdrew the jute price cap order, industry welcomes move
  • Akasa Air might postpone its July launch due to late arrival of aircrafts
  • Metro Cash & Carry decides to sell Indian operations. All major players, including Reliance retail and Amazon, are likely to bid
  • Local and global cues spook the markets on Friday - Sensex crashes 1416 points to 52792 and Nifty by 430 points to 15809
  • IPL: RCB crushes GT by 8 wickets as Virat Kohli returns to form with a well-made half century
  • Nikhat Zareen is world champion in flyweight category. Wins gold at Women's World Championships at Instanbul
  • Supreme Court uses its special powers under Article 124 to release A G Perarivalan, a Rajiv Gandhi assassination convict
  • Indrani Mukherjea, prime accused in the Sheena Bora murder case, gets bail from Supreme Court after 6.5 years in jail
  • Hardik Patel quits Congress, says top leaders distracted by mobile phones and state leadership busy arranging 'chicken sandwiches' for them
  • Anil Baijal resigns as Lieutenant Governor of Delhi citing "personal reasons"
Nikhat Zareen is crowned world champion in the flyweight (52Kg) category at the Women's World Championships in Istanbul /////// Supreme Court sentences Navjot Singh Sidhu to rigorous imprisonment of one year in the road rage case /////// Sunil Jakhar, who quit the Congress a few days ago, joins the BJP
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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.