New Delhi: The Paris-based World Inequality Lab, with pathbreaking work into income and wealth inequality in recent years, has a paper out on the state of inequality in India. Titled, Income and Wealth Inequality in India, 1922-2023: The Rise of the Billionaire Raj, it has found on analysing data between 1922 and 2022 (a century of data on incomes and wealth), that “By 2022-23, top 1% income and wealth shares (22.6% and 40.1%) are at their highest historical levels and India’s top 1% income share is among the very highest in the world, higher than even South Africa, Brazil and US.”
It says “the ‘billionaire raj’ (a term used to define the post-2010s rapid rise of billionaires in the country, at odds with lives of millions, popularised by James Crabtree’s book of the same name) is now more unequal than the British colonial raj”.
It makes two other observations, one on income tax being regressive, if seen from the prism of net wealth in society. Also, the poor economic data, which has “seen a decline recently.”
It finds that while inequality has been rising sharply in India since the 1980s, “between 2014-15 and 2022-23, the rise of top-end inequality has been particularly pronounced in terms of wealth concentration.”
It has listed five “Key findings” as follows.
“1. Inequality declined post-independence till the early 1980s, after which it began rising and has skyrocketed since the early 2000s. Trends of top income and wealth shares track each other over the entire period of the study.
2. Between 2014-15 and 2022-23, the rise of top-end inequality has been particularly pronounced in terms of wealth concentration. By 2022-23, top 1% income and wealth shares (22.6% and 40.1%) are at their highest historical levels and India’s top 1% income share is among the very highest in the world, higher than even South Africa, Brazil and US.
3. In line with earlier work, the paper finds suggestive evidence that the Indian income tax system might be regressive when viewed from the lens of net wealth.
4. A restructuring of the tax code to account for both income and wealth, and broad-based public investments in health, education and nutrition are needed to enable the average Indian, and not just the elites, to meaningfully benefit from the ongoing wave of globalization. Besides serving as a tool to fight inequality, a “super tax” of 2% on the net wealth of the 167 wealthiest families in 2022-23 would yield 0.5% of national income in revenues and create valuable fiscal space to facilitate such investments.
5. The paper emphasises that 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.”
Source: World Inequality Lab
The authors are Nitin Kumar Bharti, Lucas Chancel, Thomas Piketty, and Anmol Somanchi who have pulled together “national income accounts, wealth aggregates, tax tabulations, rich lists, and surveys on income, consumption, and wealth in a consistent framework to present long run homogeneous series of income and wealth inequality in India.”
The Government of India in the past few years has been adept at refuting any global assessments pointing to economic facts such as hunger and malnutrition, while not having made data available at regular intervals as was the case earlier. India’s GDP data itself is highly contested. Former chief economic advisor Arvind Subramanian has expressed surprise at how the GDP has been said to be rising. India has missed its date for the decadal census for the first time in 140 years, in 2021, citing COVID-19. India also has issues with the WHO data on underestimation of the Covid death toll by ten times. It is the only country in the world which contests WHO’s Covid numbers.