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Rising Inequalities in Income in India
According to a study by Lucas Chancel and Thomas Piketty (2017), the average annual real per adult income growth in India accelerated from 1.7% during 1951–80 to 3.3% during 1980–2015. However, for the bottom 50% income group, it decelerated from 2.2% to 1.9% over the same period, despite acceleration from 1.2% to 5.1% for the top 10% income group and from 0.2% to 6.6% for the top 1% income group. These growing income inequalities in India are part of a larger set of rising income inequalities in several parts of the world; according to the World Social Report 2020 by the United Nations (2020), two-thirds of the world’s population today lives in countries where income inequality has grown. Moreover, “the ratio between the incomes of the richest and the poorest 10% of global population is 25% larger than it would be in a world without global warming,” as, among other factors, “at similar levels of exposure, people in poverty are more susceptible to damage from climate change than those who are better off” (United Nations 2020: 7).
The author is grateful to E Revathi, G R Reddy, M Gopinath Reddy, Murali Prasad, P Sudhakar, Mary Vijay and P Kishore Kumar for their help in the preparation of this article.
In India, the prevailing inequitable socio-economic structure, and the influence exerted by the socio-economically privileged sections on economic policymaking and implementation, are responsible for the rise in income inequalities. The experience of the countries that pursued globalisation alongside policies to reduce inequalities shows that the rise in income inequalities is avoidable. Drivers of declining income inequality include the deepening of democracy, new social movements, the expansion of education and social safety nets, and an increase in government transfers to the poor. Rallying like-minded political parties around demands for social justice and the protection of the environment is critical in achieving inclusive development.
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