Recent research conducted by the World Inequality Lab (WIL) suggests that economic disparity in India is now more pronounced than it was under British colonial rule. According to the study, India’s top 1% now holds a larger share of the nation’s income than during the colonial era, with significant implications for the middle class and overall economic equity.
The report, titled “The Rise of the Billionaire Raj,” was authored by scholars from prestigious institutions, including New York University’s Abu Dhabi campus, Harvard Kennedy School, and the Paris School of Economics. The research highlights that the gap between the rich and the poor has not only persisted but has widened considerably since Narendra Modi came to power in 2014. At that time, Modi promised to tackle corruption and implement reforms that would revitalize the middle class and stabilize rising prices and unemployment.
However, a decade later, the situation appears starkly different. The income share for India’s wealthiest 1% has risen dramatically, reaching an unprecedented 22.6% by 2022-2023. In contrast, during the height of British rule in the 1930s, the richest 1% held just over 20% of the income, a figure that decreased following World War II and during the early years of India’s independence.
The widening income gap is mirrored by an even more pronounced wealth disparity. The same top 1% of the population now controls more than 40% of India’s wealth, up from less than 15% in the early 1960s. This concentration of wealth intensified significantly following India’s economic liberalization in 1991, which included measures such as privatization of sectors and deregulation that favored the upper echelons of society.
Economists and authors of the study, such as Nitin Kumar Bharti and Lucas Chancel, argue that the rapid economic growth experienced by India, averaging over 7% in GDP growth annually, has inadvertently exacerbated these inequalities. They suggest that the free market, contrary to expectations, has failed to distribute benefits equitably across different societal segments.
The research also addresses the political implications of these economic trends. With Modi seeking a rare third term, income and wealth disparities have become a focal point of the electoral debate. Opposition parties, such as the Congress Party, have pledged to conduct a caste census and implement wealth taxes aimed at redistributing resources more fairly.
The deepening income and wealth divides are raising concerns about the long-term sustainability of India’s economic model, which appears to benefit a small elite at the expense of broader population segments. This situation is prompting calls for significant policy reforms to ensure that the fruits of economic growth are shared more widely and equitably across Indian society. SOURCE: AL JAZEERA