According to the World Inequality Report 2022, India has emerged as the most unequal country, with the richest 1% of the population controlling more than one-fifth of total national wealth in 2021. According to the research, the average national income of the Indian adult population is 204,200. While the poorest 50% earns $53,610, the richest 10% makes more than 20 times that ($1,166,520).
Nobel laureate economists Abhijit Banerjee and Esther Duflo stated in the report’s prologue that India was “among the most unequal countries” in the world.
According to the research, the average national income of the Indian adult population in 2021 will be Rs 2,04,200 on a purchasing power parity basis. The fact that the poorest 50% of the population earned Rs 53,610 throughout the year, on the other hand, explains the income inequality.
What is purchasing power parity?
According to the World Inequality Report, purchasing power parity is the conventional method for deflating (or inflating) income received in a specific nation based on the cost of goods and services in that country relative to others.
Inequality of wealth in India
According to the research, income disparity in India is much more pronounced. While the average wealth of an Indian household is Rs 9,83,010, the poorest 50% of the country’s population owns “virtually nothing,” with an average wealth of Rs 66,280, according to the survey.
The middle class is likewise relatively impoverished, accounting for 29.5 percent of the country’s overall wealth. The richest one percent of India’s population alone controls 33% of the country’s entire wealth.
Inequality of gender
According to the research, India’s female labour income share of 18 per cent in 2021 is one of the lowest in the world. The result was much lower than the Asian average, which is 21%, excluding China.
Since 1990, India’s female labour income share has increased by more than eight percentage points. The study did remark, however, that the growth was inadequate to bring the figure up to a level with the regional norm.
Private wealth is increasing.
Private wealth has increased in emerging markets such as China and India. After transitioning away from communism (in China and Russia) or a highly controlled economic structure, large developing economies such as China and India enjoyed quicker gains in individual wealth than wealthier nations (in India). While these gains are to some extent predicted (since a major percentage of public income is shifted to the private sector), the magnitude of the change is startling. In recent decades, China has seen the greatest rise in individual wealth. The growth in private wealth witnessed in India during this period is particularly noteworthy (up from 290 per cent in 1980 to 560 per cent in 2020).
The Effect of the Covid Crisis on Inequality
The Covid-19 outbreak and the ensuing economic crisis affected all global areas, albeit to varying degrees. Europe, Latin America, and South and Southeast Asia had the greatest declines in national income in 2020 (between -6 and -7.6 per cent), whereas East Asia (the epicentre of the epidemic) was able to maintain its 2020 revenue at the level of 2019.
Due to a lack of real-time statistics on the distribution of growth across all nations, it is yet too early to get a comprehensive picture of the crisis’s intra-country impact on income and wealth inequality. However, between 2021 and 2019, the wealth of the top 0.001% increased by 14 per cent, while average worldwide wealth increased by only 1 per cent. Between 2019 and 2021, worldwide billionaire wealth climbed by more than 50%.
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