Extreme income inequalities in India The average national income of the Indian adult population is €PPP7,400 (or INR204,200).10 While the bottom 50% earns €PPP2 000 (INR53,610), the top 10% earns more than 20 times more (€PPP42 500 or INR1,166,520). While the top 10% and top 1% hold respectively 57% and 22% of total national income, the bottom 50% share has gone down to 13%. India stands out as a poor and very unequal country, with an affluent elite.
Income inequality in the long run : A historical high
Indian income inequality was very high under British colonial rule (1858-1947), with a top 10% income share around 50%. After independence, socialist-inspired five-year plans contributed to reducing this share to 35-40%. Since the mid1980s, deregulation and liberalization policies have led to one of the most extreme increases in income and wealth inequality observed in the world. While the top 1% has largely benefited from economic reforms, growth among low and middle income groups has been relatively slow and poverty persists. Over the past three years, the quality of inequality data released by the government has seriously deteriorated, making it particularly difficult to assess recent inequality changes.
Wealth inequality
Average household wealth in India is equal to €PPP35,000 or INR983,010 (compared with €PPP81,000 in China). The bottom 50% own almost nothing, with an average wealth of €PPP4,200 (6% of the total, INR66,280). The middle class is also relatively poor (with an average wealth of only €PPP26 400 or INR723,930, 29.5% of the total) as compared with the top 10% and 1% who own respectively €PPP231,300 (65% of the total) and over €PPP6.1 million (33%), INR6,354,070, and INR32,449,360.
Gender inequality
Gender inequalities in India are very high. The female labor income share is equal to 18%. This is significantly lower than the average in Asia (21%, excluding China). This value is one of the lowest in the world, slightly higher than the average share in Middle East (15%). The significant increase observed since 1990 (+8 p.p.) has been insufficient to lift women’s labor income share to the regional average.
Carbon inequality
India is a low carbon emitter: the average per capita consumption of greenhouse gas is equal to just over 2 tCO2e. These levels are typically comparable with carbon footprints in sub-Saharan African countries. The bottom 50%, middle 40% and top 10% respectively consume 1, 2, and 9 tCO2e/capita. A person in the bottom 50% of the population in India is responsible for, on average, five times fewer emissions than the average person in the bottom 50% in the European Union and 10 times fewer than the average person in the bottom 50% in the US.
The full report is available at: https://wir2022.wid.world/