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Tuesday, May 28, 2024

India’s Top 1% Income, Wealth Shares Soar, Reports World Inequality Lab

A recent study paper shows the growing income disparity in India since 2000s as the top 1 percent population share in income and wealth soaring to 22.6 percent and 40.1 percent, respectively, by 2022-23.

The paper, titled ‘Income and Wealth Inequality in India, 1922-2023: The Rise of the Billionaire Raj’, authored by Thomas Piketty of Paris School of Economics and World Inequality Lab, Lucas Chancel of Harvard Kennedy School and World Inequality Lab, and Nitin Kumar Bharti of New York University and World Inequality Lab, highlights a sharp rise in top-end inequality, particularly in terms of wealth concentration, between 2014-15 and 2022-23.

The paper underscores that by 2022-23, the top 1 percent’s income and wealth shares have reached historic highs, positioning India’s top 1 percent income share among the highest globally, surpassing South Africa, Brazil, and even the US.

Addressing the issue, the paper suggests a restructuring of the tax code to account for both income and wealth, alongside broad-based public investments in health, education, and nutrition to ensure broader societal benefits from globalization.

Study recommendations

Proposing measures to combat inequality, the paper recommends implementing a “super tax” of 2 percent on the net wealth of the 167 wealthiest families in 2022-23, which could generate substantial revenue and create fiscal space for necessary investments.

However, the paper highlights the poor quality of economic data in India, noting a recent decline in data quality. Despite this, India’s top 1 percent income share ranks among the highest globally, with wealth shares falling in the middle range compared to countries like Brazil and South Africa, which exhibit extreme wealth concentration levels.

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(Source: The Financial Express)

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