Financial inequality in India is now higher than it was during the British era, according to leading economists from the Paris School of Economics. The World Inequality Lab has claimed that under the nine years of the Modi government, the financial disparity between the rich and the poor in the country has reached unprecedented levels.
The Richest 1% Controls 40%
According to the report titled ‘Income and Wealth Inequality in India 1922-2023: The Rise of the Billionaire Raj‘, 40% of India’s total wealth was held by the richest 1% in 2022-23. Their share in the total income of the country is more than 22 percent. Even in countries like America, Brazil, South Africa, the share of the richest in the national income is not so high.
“Financial inequality in India’s billionaires’ rule is greater than that of British colonial rule”
Papers by economists at the World Inequality Lab
The Rise of the Billionaire’s Rule
Economists including Thomas Piketty have claimed in a report that India is now led by the ‘modern bourgeoisie‘ under the ‘rule of the rich‘ or ‘billionaire’s rule‘. As a result,they fear, the rule of the rich or ‘plutocracy‘ may gradually be established in India.
Income Inequality
Economists from the World Inequality Lab at the Paris School of Economics, found that inequality peaked between 2014-15 and 2022-23. The income of the bottom 50% of India’s population is only 15% of the total income. It is contrasting sharply with the top 1% whose average income is 53 lakh rupees a year—23 times the average Indian’s income.
Causes of Growing Inequality
Economists attribute the growing inequality to disparities in salary growth between the public and private sectors. As well as the increasing influence of capital income. They also point to the lack of high-quality education for all and a tax system that disproportionately burdens the poor.
Proposed Solution
To address this issue, economists suggest imposing a 2% wealth tax on the 167 richest families. The revenue generated should be used to increase government investment in health, education, and nutrition for all. So that everyone can take the benefits of globalization.
