Inequality in India has surged since the early 2000s, with the income and wealth share of the top 1% population reaching 22.6% and 40.1%, respectively, in 2022-23, according to a working paper titled ‘Income and Wealth Inequality in India, 1922-2023: The Rise of the Billionaire Raj’. The study highlights a significant increase in top-end inequality, particularly in terms of wealth concentration, between 2014-15 and 2022-23.
Authored by Thomas Piketty from the Paris School of Economics and World Inequality Lab, Lucas Chancel from Harvard Kennedy School and World Inequality Lab, and Nitin Kumar Bharti from New York University and World Inequality Lab, the paper underscores the unprecedented rise in income and wealth shares among India’s elite.
By 2022-23, the top 1% income and wealth shares have reached historical highs, with India’s top 1% income share ranking among the highest globally, surpassing countries like South Africa, Brazil, and the US.
The paper advocates for a restructuring of the tax code to address both income and wealth disparities. It emphasizes the necessity of broad-based public investments in crucial sectors such as health, education, and nutrition to ensure equitable opportunities for all Indians, not just the privileged few.
Proposing a “super tax” of 2% on the net wealth of the 167 wealthiest families in 2022-23, the study suggests that such a measure could generate significant revenue equivalent to 0.5% of national income, facilitating essential public investments.
However, the paper acknowledges challenges posed by the quality of economic data in India, which it describes as notably poor and declining. Despite this limitation, India’s top 1% income share is deemed to be among the highest globally, trailing behind only a few countries such as Peru, Yemen, and a couple of other small nations.
Regarding top wealth shares, India ranks in the middle of the pack, alongside countries like Brazil and South Africa. However, extreme levels of wealth concentration are observed in Brazil and South Africa, with top 10% shares reaching 85.6% and 79.7%, respectively.
In summary, the study sheds light on the escalating inequality landscape in India and underscores the urgency of implementing policy measures to address wealth disparities and promote inclusive growth.
