Inequality has increased since the 2000s, with India’s richest 1% owning 40% of wealth, study shows

The newspaper said the quality of Indian economic data was significantly poor (representative)

New Delhi:

Inequality in India has risen sharply since the early 2000s, with the income and wealth shares of the richest 1% rising to 22.6% and 40.1% respectively in 2022-23, a working paper shows.

The paper titled “Income and Wealth Inequality in India, 1922-2023: The Rise of Billionaire Rule” states that the increase in top-level inequality between 2014-15 and 2022-23 is particularly evident in wealth concentration.

The paper was authored by Thomas Piketty (Paris School of Economics and World Inequality Lab), Lucas Chancel (Harvard Kennedy School and World Inequality Lab), and Nitin Kumar Bharti (New York University and World Inequality Lab).

“The increase in high-end inequality between 2014-15 and 2022-23 is particularly evident in wealth concentration.

“By 2022-23, the income and wealth shares of the top 1% (22.6% and 40.1%) will reach all-time highs, with India’s top 1% income share among the highest in the world, even higher than in southern Africa , Brazil and the United States,” the newspaper said.

The paper says the Indian income tax system is likely to be regressive from a net wealth perspective.

“There is a need for a restructuring of the tax code to take into account both income and wealth, and widespread public investment in health, education and nutrition so that ordinary Indians, not just the elite, can meaningfully benefit from the ongoing wave of globalization ,” it noted.

In addition to being a tool to combat inequality, a “super tax” of 2% on the net wealth of the 167 richest households in 2022-23 would generate 0.5% of national income and create valuable fiscal revenue, the paper said. space to promote such investments.

The newspaper said that the quality of Indian economic data is obviously poor and has declined recently.

The income share of India’s richest 1% appears to be one of the highest in the world, “probably trailing only Peru, Yemen and a few other small countries,” the report said.

“In terms of highest wealth share, we see that India is in the middle of both the top 10% and top 1% wealth shares, while Brazil and South Africa stand out with their extremely high wealth concentration (85.6%). 10% and 79.7% respectively),” the newspaper said.

The paper points out that from 13% in 1922 to the two world wars, the income share of the top 1% increased significantly to more than 20%.

Although they experienced a sharp decline thereafter, falling back to 13% by the time of India’s independence in the 1940s, after a brief rise in the 1950s, the top 1%’s income share continued to decline over the next two decades, the newspaper said, by 1982 reached 6.1% annually.

The report notes that this may be the result of the broad socialist policy agenda pursued by the Indian government until the 1980s.

The newspaper said that since the early 1980s, the Indian government began to implement extensive economic reforms, and until liberalization was achieved in 1991, the decline in the income share of the top 1% stopped.

The newspaper said that since the early 1990s, the income share of the top 1% of earners has continued to grow over the next 30 years, reaching a record high of 22.6% in 2022.

While the paper’s wealth inequality series spans 1961 to 2023, the availability of tax tables dates back to 1922, when the UK government enacted the Income Tax Act, allowing the authors to study the income share of the top 1% of earners Evolution in 2023. A whole century.

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)