Between 2014-15 and 2022-23, increase in top-end inequality has been particularly striking
New Delhi:
A recent report by the World Inequality Lab has documented a significant rise in economic disparities in India. Nearly 90 per cent of the country’s billionaire wealth has been found concentrated in the hands of the upper castes.
The report, “Towards Tax Justice and Wealth Redistribution in India”, looked into issues on wealth distribution. It said the top 1 per cent controls over 40 per cent of India’s total wealth, indicating rising inequality.
Overview of Wealth Distribution Among Billionaires
The report provides a detailed analysis of data, revealing 88.4 per cent of billionaire wealth in India is concentrated among upper castes (UCs). Scheduled Tribes (STs), among the most marginalised communities, have no representation among the wealthiest Indians. This disparity extends beyond billionaire wealth; upper castes hold nearly 55 per cent of the national wealth, according to the All-India Debt and Investment Survey (AIDIS) for 2018-19. This stark contrast in wealth ownership underscores the deep-seated economic inequalities rooted in India’s caste system.
Caste Continues to Dominate the Financial Demographics of the Country
Caste continues to influence access to education, healthcare, social networks, and credit-all essential for entrepreneurship and wealth creation. Historically, Dalits were forbidden from owning land in many regions, severely limiting their economic advancement.
The disparity is not confined to billionaires. The “State of Working India, 2023” report by Azim Premji University highlights that Scheduled Castes (SCs) and Scheduled Tribes (STs) are underrepresented as enterprise owners relative to their workforce participation. While SCs make up 19.3 per cent of the workforce, only 11.4 per cent own enterprises. For STs, who constitute 10.1 per cent of the workforce, only 5.4 per cent are enterprise owners.
Wealth inequality extends beyond the billionaire rankings. According to the National Family Health Survey, only 12.3 per cent of SCs and 5.4 per cent of STs are in the highest wealth quintile. Conversely, over 25 per cent of SCs and 46.3 per cent of STs fall into the lowest wealth category. The Other Backward Classes (OBC) community has 16.3 per cent of its population in the lowest wealth category and 19.2 per cent in the highest wealth category.
Inequality at Highest Levels on Record
India’s income and wealth inequality, which declined post-independence, began to rise in the 1980s and has soared since the 2000s. Between 2014-15 and 2022-23, the increase in top-end inequality has been particularly striking in terms of wealth concentration. The top 1 per cent of income and wealth shares are now at their highest historical levels. Specifically, the top 1 per cent control over 40 per cent of total wealth in India, up from 12.5 per cent in 1980, and they earn 22.6 per cent of total pre-tax income, up from 7.3 per cent in 1980.
This dramatic rise in inequality has made the “Billionaire Raj,” dominated by India’s modern bourgeoisie, more unequal than the British Raj. It places India among the most unequal countries globally. Current estimates indicate that it takes just Rs 2.9 lakhs per year to be in the top 10 per cent of income earners and Rs 20.7 lakhs to join the top 1 per cent . In stark contrast, the median adult earns only about Rs 1 lakh, while the poorest have virtually no income. The bottom 50 per cent of the population earns only 15 per cent of the total national income.
To fully grasp the skewed income distribution, one would have to be close to the 90th percentile to earn the average income. In terms of wealth, an adult needs Rs 21 lakhs to be in the wealthiest 10 per cent and Rs 82 lakhs to enter the top 1 per cent . The median adult holds approximately Rs 4.3 lakhs in wealth, with a significant portion owning almost no wealth. The bottom 50 per cent holds only 6.4 per cent of the total wealth, while the top 1 per cent owns 40.1 per cent , and the top 0.001 per cent alone controls 17 per cent . This means fewer than 10,000 individuals in the top 0.001 per cent hold nearly three times the total wealth of the entire bottom 50 per cent (46 crore individuals).