Inequality Current Affairs
According to World Inequality Report 2018, Income inequality in India has reached historically high levels with share of national income accruing to India’s top 1% earners touching 22% in 2014, while share of top 10% was around 56%. The report was released by World Inequality Lab (WIL), an organisation that aims to promote research on global inequality dynamics.
Findings of report
Since 1980, richest 1% captured twice as much as poorest 50% of world population. In other words, since 1980, 27% of all new income worldwide was captured by richest 1%, while poorest 50% captured only 13% of growth.
Inequality trends vary so greatly among countries even when countries share similar levels of development. This highlights important role of national policies in shaping inequality. For instance since 1980, China has recorded much higher growth rates with significantly lower inequality levels than India.
Since 1980, income inequality has increased rapidly in North America, India, China and Russia while growing moderately in Europe. However, in sub-Saharan Africa, Middle East, Brazil income inequality has remained relatively stable but at extremely high levels.
Factors fuelling the inequality within countries and at global level include combination of privatisations and increasing income inequality. Private capital is increasingly concentrated among a few individuals.
Deregulation and opening-up of reforms in India since 1980s have led to substantial increase in inequality. In 2014, top 0.1% of earners have continued to capture more growth than all those in bottom 50% combined in India.
The bottom 50% now has about 15% share in the total income. This rising inequality contrasts to 30 years following country’s Independence in 1947, when income inequality was widely reduced and incomes of bottom 50% grew at faster rate than national average.
The global income and wealth inequality will steadily rise if countries continue to follow same trajectory they have been on since 1980, despite strong growth in emerging countries. There is need for more ambitious policies to democratize access to education and well-paying jobs in rich and emerging countries alike.
According to study conducted by rights group Oxfam, India’s richest 1% now hold a huge 58% of the country’s total wealth, indicating rise income inequality. It is higher than the global figure of about 50%.
It shows that 57 billionaires in India now have same wealth ($216 billion) as that of the bottom 70% population of the country. Globally, just 8 billionaires have the wealth as the poorest 50 % of the world population.
Key Findings of Study
- The total global wealth in the year 2016 was $255.7 trillion of which about $6.5 trillion was held by billionaires, led by Bill Gates ($75 billion), Amancio Ortega ($67 billion) and Warren Buffett($60.8 billion).
- Globally, just 8 billionaires have the same amount of wealth as the poorest 50% of the world population.
- Since 2015, richest 1 % owned more wealth than the rest of the planet. Over the next 20 years, 500 people will hand over $ 2.1 trillion to their heirs (a sum larger than GDP of India, a country of 1.3 billion people).
- Over the last two decades, richest 10% of the populations in China, Laos, Indonesia, India, Bangladesh and Sri Lanka have seen their share of income increase by more than 15%.
- Poorest Sections: The poorest half of world has less wealth than had been previously thought. The poorest 10% have seen their share of income fall by more than 15%.
- Solution: It calls to build a human economy that benefits everyone not just the privileged few.
- In India, there are 84 billionaires with a collective wealth of $248 billion led by Mukesh Ambani ($19.3 billion), Dilip Shanghvi ($16.7 billion) and Azim Premji ($15 billion).
- Gender pay gap: India suffers from huge gender pay gap. It has among the worst levels of gender wage disparity (men earning more than women in similar jobs) and the gap exceeding 30%.
- In India, women form 60% of the lowest paid wage labour but only 15% of the highest wage–earners. Thus, India women are poorly represented in top bracket of wage–earners and experience wide gender pay gap at the bottom.
- Indian government must introduce inheritance tax and increase wealth tax as the proportion of this tax in total tax revenue is one of the lowest in India to end the extreme concentration of wealth and to end poverty.