Inequality in India

About Inequality

• It is an unfair situation in society when some people have more opportunities than other people.
• The United Nations describes it even more simply as “the state of not being equal, especially in status, rights and opportunities”.
• Gini coefficient is a typical measure of income inequality.

Highlights of Inequality in India Report

• Data highlighting Inequality in India
  • Wealth inequality: The richest 1% in India now own more than 40% of the country’s total wealth, while the bottom half of the population together share just 3% of wealth.
  • Gender inequality: The report said that female workers earned only 63 paise for every 1 rupee a male worker earned.
  • Social inequality: The Scheduled Castes earned 55% of what the advantaged social groups earned, while rural workers earned only half of the urban earnings between 2018 and 2019.
  • GST share: Approximately 64% of Goods and Services Tax (GST) came from the bottom 50% of the population in 2021-22, with only 3% of GST coming from the top 10%.
  • Wealth of the richest: Combined wealth of India’s 100 richest could fund the entire Union Budget for more than 18 months.
• Impacts of Inequality
  • Further marginalisation: The country’s marginalised – Dalits, Adivasis, Muslims, Women and informal sector workers – continue to suffer in a system which ensures the survival of the richest.
  • Disproportionate spending: The poor are paying disproportionately higher taxes, spending more on essential items and services when compared to the rich.

Way Forward

• Taxing super-rich: Tax the wealth of the super-rich at rates high enough to systematically reduce extreme wealth and lower power concentration and inequality.
• Funding to bridge inequality: Use the revenues from taxing super-rich to increase government spending on inequality-busting sectors, such as healthcare, education and food security, and to fund the just transition to a low-carbon world.
• Progressive taxation: Implement progressive tax measures such as wealth tax and inheritance tax, to reduce inequality.
• Basic wages: There is a need to ensure workers in the formal and informal sector get basic minimum wages, which is essential for living a dignified life.

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