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Context:
The paper by Thomas Piketty and Lucas Chancel, ‘Indian Income Inequality 1922-2014 — From British Raj to Billionaire Raj?’ has shown that income inequality in India is at its highest level since 1922.
How far has India been successful to achieve inclusive growth?
- During the period 1980-2014, the share of the top 1% of India’s population in income increased from 6 per cent to 22%
- The share of the middle 40 % fell from 43%to 30%
- The share of the bottom 50% fell from 24 % to 15%
- The top 0.1% of earners captured a higher share (12%) of the total growth than the bottom 50% (11%)
- Thus, the scenario in India is grim. India has definitely not performed well in achieving inclusive growth.
What necessary conditions should the state follow to bring in inclusivity and mitigate income disparity?
- The present skewed income growth pattern needs to be curbed
- The issue of unemployment needs to addressed urgently
- The taxation structure also needs to be looked at for examining correctives like gift tax, wealth tax, estate duty etc.
