Income and Wealth Inequality in India, 1922-2023: The Rise of the Billionaire Raj

The working paper highlights how inequality in India declined in the period after independence until the 1980s, after which it started rising again. The paper compares the wealth and income holdings of the richest one per cent population compared with those of the poorest 50 per cent. It makes the case that today inequality is worse than what it was even during the British Raj.The paper was published by the World Inequality Lab, an organization that promotes research to understand the 'drivers of inequality worldwide'. It was authored by Nitin Kumar Bharti, Lucas Chancel, Thomas Piketty and Anmol Somanchi.The paper draws on data from national income accounts, tax returns, billionaire rankings, rich lists, consumption expenditure surveys, periodic labour force surveys, and so on. Since there is a high threshold for taxability in India, the tax data only gives an idea about the top incomes; surveys, on the other hand, miss out on the data about the 'super rich'. In such a scenario, the authors have combined multiple data sources to arrive at conclusions about the income and wealth distribution in India.Going forward, the report recommends a change in the Indian income tax regime to account for wealth alongside income. It adds that by applying a higher tax rate on the wealthiest Indians, investments can be made in the fields of health, education, and nutrition and in turn bring down inequality.