Income Inequality Is On The Highest Peak In India Post-Economic Reforms
Since the beginning of the decade of reforms in India in the 1980s, there has been a huge increase in economic inequality among the people. The growth of 0.1% of the highest earners in the country is higher than the people present in the bottom 50%.
The first World Inequality report released stated that, in 2014, the share of top 1% of the people in India’s national income was 22%, while the top 10% had about 56% share in it. The highest-earning 0.1% of the population is getting more than 50% of the bottom in terms of income. The share of the total income of the bottom 50% has now come down to around 15%.
According to the report, “This trend of increasing inequality has been contrary to 30 years after the independence of the country in 1947, when the inequality in income was considerably reduced and the income of 50% of the population below had increased more than the national average.” In other words, 27% of all new income originated from the world since 1980 came to the wealthiest 1% of the people, while the poorest 50% of the people got only 13% of the total growth.
The report has been prepared by the Economist Phukundo Alvareido, Lucas Chancell, Emmanuel Saige, Gabriel Zukman, and Thomas Picketti. It states that these figures reveal a major inequality as in top 1% there are 7.5 Million people, while the bottom 50% is about 3.7 Billion people. This is a sign of big change in the ownership of the capital.
Saige, who was involved in preparing the report, said that increasing inequality in privatization and income has increased the inequality. Private capitals are becoming limited in a few individual countries and globally. The report warns that if emerging countries continue to follow their policies that they since the 1980s, then inequality in global earnings and property will increase rapidly.
It says that there is a need to make major changes in the countries and global tax policies to deal with the problem of global income and property inequality. According to the report, there is a need to re-assess the policies of education, corporate governance, and salary fixation in many countries. There is a need to invest in future in order to deal with current inequality in income and assets and to prevent further increase of income inequality in future.