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Editorial of the Day (5th Aug): Income Inequality and Inclusive Growth

Context: Wealth disparity in India highlights ethical concerns.

Wealth Inequality in India: Key Statistics

  • Top 1% Wealth Share: Own 22.6% of income and 40.1% of wealth.
  • Wealth Distribution:
    • The top 1% holds an average wealth of ₹54 million, 40 times the national average.
    • The bottom 50% holds ₹0.17 million each, 0.1 times the national average.
    • The middle 40% possesses ₹0.96 million each, 0.7 times the national average.
    • The wealthiest 10,000 individuals average ₹22.6 billion each, which is 16,763 times the average Indian wealth.
  • Caste and Wealth:
    • About 90% of billionaire wealth in 2022-23 was owned by individuals from upper castes,
    • Less than 10% by Other Backward Classes,
    • 6% by Scheduled Castes, and
    • None by Scheduled Tribes.
  • Economic Disparities and Nutrition: Despite 135 million Indians escaping multidimensional poverty from 2016 to 2021, in 2022,
    • 5% of Indians could not afford a healthy diet costing 4.20 PPP dollars per day.
    • This translates to almost 790 million people unable to spend ₹350 daily on healthy food.

Sociological and Philosophical Insights

  • Thorstein Veblen’s Perspective: Veblen criticised the affluent forconspicuous consumption,” where lavish spending is used to assert social status and deter emulation by the less wealthy.
  • Michael J. Sandel: Sandel argues against the entitlement mentality of the wealthy, suggesting that their success is often due to advantageous early life circumstances rather than solely personal merit.
    • He advocates for recognizing the contributions of the community to individual successes and promoting a more equitable distribution of wealth.
  • Public Perception and Societal Impact: The middle and lower classes often show a resigned acceptance of wealth disparities, influenced by the propagated notion of meritocracy.
    • This acceptance is seen as a form of psychological capture, where the less affluent see the wealth distribution as fair and deserved.
  • Religious Context:
    • The Quran advocates for the concept of wealth as a trusteeship, where the rich are custodians of wealth on behalf of the poor, highlighting a “recognised right” of the underprivileged in the wealth of the affluent.
    • This perspective challenges the modern acceptance of wealth accumulation and emphasises the moral obligations of the wealthy.

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