Income Equality in India: A Tale of Contrasts and Progress
India’s economic rise has been nothing short of remarkable. With a GDP surpassing $4 trillion, the country now ranks as the world’s fourth-largest economy. Yet, beneath this milestone lies a complex and evolving story of income equality—one that blends statistical optimism with lived realities.
📊 The Numbers: A Mixed Picture
- World Bank’s Gini Index: India scored 25.5 on the Gini Index in 2022–23, placing it 4th globally in income equality, ahead of countries like the U.S. and China.
- Poverty Reduction: Over 171 million Indians exited extreme poverty between 2011 and 2023, with the rate dropping to just 2.3%.
- Consumption vs. Income: While consumption inequality appears to be narrowing, income inequality is rising. The top 1% of earners control 22.6% of national income, while the bottom 50% share just 3%.
🧮 Why the Discrepancy?
- Survey Limitations: Government surveys often rely on consumption data, which underrepresents the ultra-rich and the poorest, smoothing out extremes.
- Informal Economy: With a large informal workforce, accurate income data is hard to capture. Tax return data shows a growing concentration of wealth at the top.
- Urban-Rural Divide: Services and tech sectors drive GDP growth, but agriculture—employing nearly half the workforce—contributes just 15–16%.
🚨 Ground Realities
- Youth Unemployment: Nearly 45% of graduates under 25 are unemployed.
- Child Malnutrition: About 36% of children are stunted, and 19% are wasted.
- Farmer Distress: Over 10,000 farmer suicides occur annually due to debt and crop failures.
🛠️ Government Initiatives
India’s improved equality metrics are backed by targeted welfare schemes:
| Initiative | Impact |
|---|---|
| PM Jan Dhan Yojana | Over 55 crore bank accounts opened for financial inclusion |
| Aadhaar-linked DBT | ₹3.48 lakh crore saved via direct transfers |
| Ayushman Bharat | ₹5 lakh health insurance for 41 crore beneficiaries |
| PMGKAY | Free food grains to 80 crore citizens during COVID-19 |
🧭 Looking Ahead
India’s journey toward income equality is far from over. While global rankings suggest progress, experts caution against overreliance on consumption-based metrics. Bridging the gap between statistical equality and lived experience will require deeper reforms in education, healthcare, employment, and rural development.
As Chief Justice Bhushan Gavai recently noted, Dr. Ambedkar’s philosophy of socio-economic justice remains a guiding light for future generations. The challenge now is to ensure that India’s economic ascent lifts all boats—not just the luxury yachts.
References:
https://www.dailyexcelsior.com/indias-4-trillion-economy-growth-for-whom/
https://pib.gov.in/PressNoteDetails.aspx?NoteId=154837&ModuleId=3
https://www.indiaspend.com/explainers/explained-why-indias-inequality-is-underestimated-962681
https://www.newsclick.in/rising-real-income-inequality-india
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