Inequality in India : World Inequality Report 2022 – UPSC GS2

World Inequality Report 2022:
World Inequality report 2022 has been released. The report is authored by Lucas Chancel, co-director of the World Inequality Lab and coordinated by famed French economist Thomas Piketty among others.
Key findings of the World Inequality Report 2022 related to India:
  • National Income: In India, the top 10% and top 1% hold respectively 57% and 22% of total national income. On the other hand, the bottom 50% share is just 13% in 2021.
  • 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.
  • Gender Inequality: Gender inequalities in India are very high compared to the regional average. The female labour income share is equal to 18%, which is significantly lower than the 21% average in Asia.
  • Carbon Emitter: India is a low carbon emitter. The average per capita consumption of greenhouse gas is equal to just over 2 CO2e. These levels are typically comparable with carbon footprints in sub-Saharan African countries.
  • 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. The private wealth increase seen in India over this time is also remarkable (up from 290% in 1980 to 560% in 2020).
What is the significance of these findings for India?
  • India stands out as a poor and very unequal country with an affluent elite.
  • After independence, socialist-inspired five-year plans contributed to reducing inequality to 35-40%.
  • However, since the mid-1980s, deregulation and liberalization policies adopted by India have mostly benefited the top one percent.
What are the suggestions given by the report?
The report has suggested levying a modest progressive wealth tax on multimillionaires. If progressive wealth tax is levied, around 1.6% of global incomes could be generated and reinvested in education, health and the ecological transition.
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