India’s income divide narrows, wealth divide persists: Survey data

What is the News?

National Sample Survey Organisation(NSSO) has released the All India Debt and Investment Survey (AIDIS) for 2018-19. The survey has provided data on the wealth inequality in India.

What are the key highlights from the survey?

Wealth Inequality

In 2018-19, India’s top 10% households held 55.67% of the wealth in urban areas and 50.84% of it in rural areas.

On the other hand, the bottom 50% of the population possessed only 6.2% of assets in the urban region while they owned 10.2% of the total in the rural region. 

This wealth inequality was estimated by assigning a monetary value against all that households own like- land, livestock, buildings, vehicles, deposits in banks, post offices, shares in companies etc.

Moreover, when compared state-wise, the wealth inequality was highest in Delhi and Punjab.

Income Inequality is lower than Wealth Inequality

Income tax data for individuals for the assessment year 2018-19 shows that the top 10% of the taxpayers in the country account for only 38% of the country’s income.

This shows that income inequality is lower than wealth inequality.

Share of bottom 10 per cent in total income has increased

The share of the bottom 10 per cent tax filers in total income has increased from 2.1% in 2012-13 to 3.5% in 2018-19.

I​​n contrast, the total income of the top 10% of individuals doubled during this period.

The difference between the top 10% and bottom 10% is reducing

This is because, between 2012-18, the average value of assets for the top 10% grew by 42% in rural areas. On the other hand, the lowest 10% witnessed an asset growth of 63% during this period. 

In urban areas, asset values jumped nearly ten times for the bottom 10% of households, but only increased marginally for the top 10% of the households.

Source: This post is based on the article “India’s income divide narrows, wealth divide persists: Survey data” published in Business Standard on 23rd September 2021.