Mint Primer | Mind the income gap: Is India becoming a plutocracy?
Income and wealth inequality in India are at a historical peak with the share of the richest 1% higher than in countries like China and Brazil, finds a new study by the World Inequality Lab. Left unattended, India could slide into a plutocracy, the authors warn. Mint takes a look.
Inequality in India declined post-independence till early-1980s, after which it began rising and skyrocketed beginning 2000s, shows the report titled ‘Income and Wealth Inequality in India, 1922-2023: The rise of the Billionaire Raj’, The authors estimate that in 2022-23, the income and wealth shares of the top 1%—at 22.6% and 40.1%, respectively—are at their highest levels. The top 1% earn 23 times an average Indian. The income distribution is so skewed that one must be at the 90th percentile—or make more than 90% of the population—just to earn the average income.
The income share of 22.6% for the top 1% Indians is among the very highest in the world, and only behind some smaller countries like Peru and Yemen. In fact, in 2022-23, the income share of the richest in Indian—the ‘one percent’—was nearly 50% larger than that in China (22.6% vs 15.7%). The top 10% among Indians account for 57.7% of India’s national income—which is higher than Brazil (56.8%), China (43.4%) and the UK (33.7%).
Specifically on China, the authors note that low- and middle-income economies can achieve high growth without generating massive income inequality levels, as India is doing. Extreme concentration of income and wealth is likely to lead to the rich wielding disproportionate influence on society and government and the risk of sliding into a plutocracy, the authors warn. Though the government has started welfare schemes on housing, toilets, electricity and banking,
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