The Rich-Poor Divide In India Is Worse Now Than During British Rule, Reveals Study
At a time when India is dreaming of becoming a developed country and is having high ambitions as it approaches 100 years of independence when 2047 arrives, a new study has revealed that the divide between the rich and poor is worse now, when compared to the British rule era.
Rich-Poor Gap In India Now Is Worse Than That During British Rule
India's income inequality has skyrocketed due to the country's recent golden age of billionaires, according to a new study from the World Inequality Lab. It is currently among the highest in the world and more pronounced than it is in the United States, Brazil, and South Africa. The group of economists who co-authored the study, which included the well-known French economist Thomas Piketty, claimed that because of the current disparity between the rich and the poor in India, the country's income distribution was more equitable during British colonial rule.
271 Billionaires In India Hold Almost $1 Trillion Wealth
Hurun Research Institute's 2024 global rich list, released earlier this week, shows that the current total number of billionaires in India is peaking at 271, with 94 new billionaires added in 2023 alone.?With a combined wealth of close to $1 trillion, or 7% of the world's total wealth, that is the highest number of newly wealthy individuals in any nation outside the United States. A few Indian tycoons, including Sajjan Jindal, Gautam Adani, and Mukesh Ambani, are now socializing with some of the wealthiest individuals on the planet, including Jeff Bezos and Elon Musk.
Also Read:?India's?Richest?21 Billionaires Have More?Wealth?Than 700 Million Indians
The authors claim that "the Billionaire Raj, led by the contemporary bourgeoisie in India, is now more unequal than the British Raj, led by the colonialist forces."?
The statement is especially striking in light of the fact that India is currently being praised for its 8% GDP growth economy, according to Barclays Research, and that some analysts predict it will overtake Germany and Japan to become the third-largest economy in the world by 2027.
However, the World Inequality Lab study's authors came to this conclusion by calculating the share of wealth and total income held by India's top 1% of earners. While wealth (or net worth) is the total value of assets owned by an individual or group, income is the total of earnings, interest on savings, investments, and other sources.??
To present the study's findings, the authors compiled national income accounts, wealth aggregates, tax tabulations, rich lists, and surveys on wealth, consumption, and income, TIME report mentioned.
The economists examined annual tax tabulations for income that have been made public by the Indian and British governments since 1922. They discovered that the top 1% held between 20 and 21 percent of the nation's income, even during the highest documented period of inequality in India, which took place during the interwar colonial era from the 1930s until India's independence in 1947. Currently, 22.6% of the nation's income is owned by the 1%.??
The dynamics of wealth inequality were also monitored by the economists, starting in 1961 when the Indian government started conducting extensive household surveys on assets, debt, and wealth. By merging this study with data from the Forbes Billionaire Index, the authors discovered that 40.1% of India's total wealth was possessed by the top 1% of earners.
The total net worth of these people over this period as a percentage of India's net national income "boomed from under 1% in 1991 to a whopping 25% in 2022," the authors said, because the country's billionaire population increased from one in 1991 to 162 in 2022.?
Also Read;?List Of World's 10?Poorest?Countries In Terms Of GDP
Income Inequality Has Been Rising Since BJP Came To Power In 2014
The report also discovered that since the ruling Bharatiya Janata Party first came to power in 2014, there has been a particularly noticeable increase in inequality. Major political and economic reforms over the past ten years have resulted in "a growing nexus between big business and government, coupled with an authoritarian government with centralization of decision-making power," according to the report. They claim that this had the potential to "facilitate disproportionate influence" on the political system and society.?
They also said that if the government increased public spending on nutrition, health care, and education, then regular Indians, not just the elite, could still benefit from globalization. Furthermore, the authors contended that a "super tax" of 2% on the net worth of the 167 wealthiest Indian families in 2022¨C2023 would generate revenues equal to 0.5% of the country's income and "create valuable fiscal space to facilitate such investments."
However, the authors warn against the possibility of India's decline toward plutocracy until the government makes such investments.??
The authors note that even the quality of economic data used in India to study inequality has recently decreased, despite the fact that the nation was once a model for post-colonial countries in maintaining the integrity of various important institutions. As per the TIME report,?the authors also argue that income and wealth inequality in India needs to be closely monitored and addressed, if only for this reason.
Also Read:?15?Rich?People Who Decided Not To Leave Inheritance For Their Kids
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