Figure 3: No Copyright Infringement Intended

Context:

• According to the recently released World Inequality Report 2022, India is now among the most unequal countries in the world.
• The report was released by the World Inequality Lab, which aims to promote research on global inequality dynamics.
• This report presents the most up-to-date synthesis of international research efforts to track global inequalities.

Global Finding:

 

• The share of global income going to top 10 per cent highest incomes at the world level has fluctuated around 50-60 per cent, while the share going to the bottom 50 per cent lowest incomes has generally been around or below 10 per cent.
• The top 0.1 per cent of the global population captures more income than the entire bottom 50 per cent.
• The average annual wealth growth rates among the poorest half of the population were between 3 per cent and 4 per cent per year between 1995 and 2021.
• The poorest half of the world population only captured 3 per cent of overall wealth growth since 1995.
• The share of wealth detained by the world’s billionaires rose from 1 per cent of total household wealth in 1995 to nearly 3.5 per cent today.

 

India Specific Finding:

• Report identifies India as a poor and an unequal country, with an affluent elite.
• 1 percent richest people in India hold 22% of the total national income in 2021, while the top 10 % owns 57 per cent of the income.
• Average national income of the Indian adult population is Rs 204,200 in 2021, on the basis of purchasing power parity.
• It highlights that, economic reforms and liberalization that India has adopted, have mostly benefited the top 1 percent.

Gender Inequalities:

• Women’s share of total incomes from work (labour income) was about 30% in 1990 and is less than 35% now.
• Inequalities within countries are now greater than those observed between countries.
• At the same time, the gap between the average incomes of the top 10% and the bottom 50% of individuals within countries has almost doubled.

 

Wealth Inequality: 

• The bottom 50% of the households own almost nothing.
• The middle class is also relatively poor owning 29.5% of the total wealth as compared with the top 10% and 1% who hold 65% and 33% of the total wealth respectively.

 

Private Wealth: 

• There has been a rise of private wealth in emerging countries such as China and India.
• China has had the largest increase in private wealth in recent decades. 

 

Suggestions:

• Tax ranging from 1 per cent of wealth owned over $1 million to 3 per cent for global billionaires can generate 1.6 per cent of global income.
• Wealth taxation in unequal societies helps tackle extreme inequality and generate substantial revenues to invest in the future.
• The wealth tax can raise significant amount of money to invest in climate investments for bottom 50 per cent of the population, in education and also in health.
• The report finds that the 15 per cent minimum corporate tax deal is very low as compared to the statutory tax rate paid by low-end and middle-size companies/corporations.