According to the recently released World Inequality Report 2022, India is now among the most unequal countries in the world.
The report was released by the World Inequality Lab, which aims to promote research on global inequality dynamics.
This report presents the most up-to-date synthesis of international research efforts to track global inequalities.
Global Finding:
The share of global income going to top 10 per cent highest incomes at the world level has fluctuated around 50-60 per cent, while the share going to the bottom 50 per cent lowest incomes has generally been around or below 10 per cent.
The top 0.1 per cent of the global population captures more income than the entire bottom 50 per cent.
The average annual wealth growth rates among the poorest half of the population were between 3 per cent and 4 per cent per year between 1995 and 2021.
The poorest half of the world population only captured 3 per cent of overall wealth growth since 1995.
The share of wealth detained by the world’s billionaires rose from 1 per cent of total household wealth in 1995 to nearly 3.5 per cent today.
India Specific Finding:
Report identifies India as a poor and an unequal country, with an affluent elite.
1 percent richest people in India hold 22% of the total national income in 2021, while the top 10 % owns 57 per cent of the income.
Average national income of the Indian adult population is Rs 204,200 in 2021, on the basis of purchasing power parity.
It highlights that, economic reforms and liberalization that India has adopted, have mostly benefited the top 1 percent.
Gender Inequalities:
Women’s share of total incomes from work (labour income) was about 30% in 1990 and is less than 35% now.
Inequalities within countries are now greater than those observed between countries.
At the same time, the gap between the average incomes of the top 10% and the bottom 50% of individuals within countries has almost doubled.
Wealth Inequality:
The bottom 50% of the households own almost nothing.
The middle class is also relatively poor owning 29.5% of the total wealth as compared with the top 10% and 1% who hold 65% and 33% of the total wealth respectively.
Private Wealth:
There has been a rise of private wealth in emerging countries such as China and India.
China has had the largest increase in private wealth in recent decades.
Suggestions:
Tax ranging from 1 per cent of wealth owned over $1 million to 3 per cent for global billionaires can generate 1.6 per cent of global income.
Wealth taxation in unequal societies helps tackle extreme inequality and generate substantial revenues to invest in the future.
The wealth tax can raise significant amount of money to invest in climate investments for bottom 50 per cent of the population, in education and also in health.
The report finds that the 15 per cent minimum corporate tax deal is very low as compared to the statutory tax rate paid by low-end and middle-size companies/corporations.
