Top 1% hold 40% of wealth in India

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Income inequality in India has zoomed since the turn of the century, with the income and wealth share of the top 1 per cent population rising to 22.6 per cent and 40.1 per cent, respectively, in 2022-23. This is borne out in a report titled ‘Income and Wealth Inequality in India, 1922-2023: The Rise of the Billionaire Raj’. The report said between 2014-15 and 2022-23, the rise of top-end inequality has been stark in terms of wealth concentration. The paper has been authored by Thomas Piketty (Paris School of Economics and World Inequality Lab), Lucas Chancel (Harvard Kennedy School and World Inequality Lab) and Nitin Kumar Bharti (New York University and World Inequality Lab). “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 per cent income and wealth shares (22.6 per cent and 40.1 per cent) are at their highest historical levels and India’s top 1 per cent income share is among the very highest in the world, higher than even South Africa, Brazil, and the US,” the paper said.

The paper says  the Indian income tax system might be regressive when seen from the lens of net wealth. “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 globalisation,” it noted.

The paper moots a super tax of 2% on the top 167 wealthiest families in 2022-23 which would yield 0.5% of national income in revenues and help in investments.

The paper also cast doubts over the quality of economic data in the country and says it has been poor of late.

It said India’s top 1 per cent population’s income share appears to be among the highest in the world “behind only perhaps Peru, Yemen and a couple of other small countries”. “In terms of top wealth shares, we see that both with top 10 per cent and top 1 per cent, India comes out in the middle of the pack, with Brazil, and South Africa standing out with their extreme wealth concentration levels (85.6 per cent and 79.7 per cent top 10 per cent shares, respectively),” the paper said. The paper pointed out that from 13 per cent in 1922, the top 1 per cent income share increased significantly to over 20 per cent in the inter-war period.