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In 2022, the wealthiest 0.1% in India pocketed about 10% of the country’s income. Meanwhile, the top 0.01% took home 4.3%, and the elite 0.001% claimed 2.1%, as reported by the World Inequality Lab.

Background:

Co-authored by economists Nitin Kumar Bharti, Lucas Chancel, Thomas Piketty, and Anmol Somanchi, the paper stated that the “Billionaire Raj” headed by “India’s modern bourgeoisie” is now more unequal than the British Raj headed by the colonialist forces.

Key findings of the report:

• Inequality declined post-independence till the early 1980s, after which it began rising and has skyrocketed since the early 2000s.
• Between 2014-15 and 2022-23, the rise of top-end inequality has been particularly pronounced in terms of wealth concentration.
• In 2022-23, the richest 1% in India reached their highest-ever income and wealth shares, with 22.6% and 40.1% respectively.
• India’s top 1% income share surpassed that of South Africa, Brazil, and even the US, making it one of the highest in the world.
• Wealth is highly concentrated even within the top 1 per cent. In 2022-23, the top 1 per cent wealth share was 39.5 per cent, 29 percentage points went just to the top 0.1 per cent, 22 percentage points to just the top 0.01 per cent and 16 percentage points to just the top 0.001 per cent.
• The sharp rise in top 10 per cent shares from 1991 onwards came at the loss of both bottom 50 per cent and middle 40 per cent shares.
• From stagnating at 11 percent during 1961-1981, bottom 50 per cent shares first fell to 8.8 per cent in 1991 and further to 6.9 per cent by 2002.
• After which, they have hovered between 6-7 per cent over the next two decades with no signs of recovery.
• In 1961, bottom 50 per cent and top 1 per cent shares were identical; by 2022-23, the top 1 per cent share was more than 5 times larger.
• The paper finds suggestive evidence that the Indian income tax system might be regressive when viewed from the lens of net wealth.
• Let’s revamp taxes to look at both earnings and assets, and invest heavily in public health, education, and nutrition. This way, not just the rich, but regular folks in India can really gain from globalization.
• A “super tax” of 2 per cent on the net wealth of the 167 wealthiest families in 2022-23 would yield 0.5 per cent of national income in revenues and create valuable fiscal space to facilitate such investments.
• The quality of economic data in India is notably poor and has seen a decline recently.
• It is therefore likely that these new estimates represent a lower bound to actual inequality levels.

Read also: SUMMARY OF THE ECONOMIC SURVEY 2022-23