Income Inequality in India

Income inequality in simple terms means unequal distribution of income and wealth among the citizens of the country. In India it has been there and it has grown over the years to what is now. And in the recent years it has taken a significant upturn. The Gini Index of India (a measure of income distribution of inequality) is 35.7 in 2021 and it was 35.2 in 2011. Currently, the richest 1 percent of India holds more than four times the wealth of 953 million people who make up for the bottom 70 percent of the country’s population. Another astonishing fact is, in the year 2019, the total wealth of all Indian billionaires (63) combined was more than the union budget of the year 2018-19. Currently in 2021 there are 179 billionaires in India. Its astonishing how a country as poor as India has so many wealthy people. In 2000, according to Credit Suisse data the richest 1% owed 36.8% of the country’s wealth and it kept on increasing. In 2016, the richest 1% of India owed over 50% of the country’s wealth. Quite evident that over the years income inequality has kept on increasing. The richest individuals have steadily kept on increasing their share of the pie. The combined individual wealth of India makes it among the 10 richest countries in the world but in reality the majority of the population is relatively poor. Thus showing the extent of inequality of income and wealth. On regular basis, thousands of Indians fail to eat a proper meal three times a day. The Global Hunger Index 2020 ranks India at 94 out of 107 countries. According to recent Global hunger index India ranks lower than Pakistan. Over the years it’s simply the case the rich are getting richer and the poor, poorer.

How the country suffers ? The health sector takes largest toll. Malnutrition due to lack of proper eating (189.2 million are undernourished in India), rise in infant mortality rate, lack of any kind of proper treatment and the list continues. With the ever increasing prices and low income its becoming almost impossible to lead a stable life for an average man. Most of the people cannot avail proper medical facilities because the private nursing homes’ sky high charges. Only the ones with money can avail it. Then there’s education ,the most important thing for an economy’s growth ,even that is becoming a luxury good nowadays.

It’s basically the fault of our broken economy for lining the pockets of billionaires and big businesses at the expense of ordinary men and women. Governments are under taxing the richest individuals, at the same time tax evasion is another major concern as a result the government fails to collect revenues that could help to tackle poverty and inequality.

The government must prioritize all sectors to built an economy that works for everyone ,not just a fortunate few. Especially the health and education sector must be given greater importance. Currently only 3.5% of GDP is spent on education and 1.1% for health, which was previously 0.9%. According to the Indian survey India ranks 179th among 189 countries in prioritizing healthcare in governmental budget. Quite the grim picture we got here. Unless the government plans to improve on these figures, alleviation of poverty and inequality is basically a pipe dream.

Sources : Credit Suisse Research Institute's Global Wealth Databook 2019

Forbes' 2019 Billionaires List.

FAO