What does India’s inequality report card have to say?

What is the News?

Recently, the Economic Advisory Council to the Prime Minister(EAC-PM) has released the State of Inequality in India Report.

About the State of Inequality in India Report and its findings

Some other related findings

Income inequality: As per the Periodic Labour Force Survey (PLFS) 2019-20, the top 1% earns almost thrice as much as the bottom 10%. The bottom 50% holds about 22% of the total income.

Health schemes: 85.9% of people from rural areas and 80% from urban areas are not covered under health schemes. Further, household income and savings remain the chief financing source.

The trend in poverty issues: World Bank says India has made progress in reducing poverty since the 2000s. The poverty headcount ratio as a percentage of the population has declined from 37.2% in 2004 to 13.6% in 2015. However, 176 million Indians were still below the poverty line.

Salary ceiling: Unlike the pre-reforms era when their return was limited to the ability of trade unions to negotiate. Economic liberalization removed the ceiling on salary, giving employees a chance to earn in proportion to their productivity. However, growing income inequality should worry if the rich become richer while the poor become poorer.

Increased investments: investments rise with higher incomes. The surplus goes into savings, which, in turn, get transformed into increased investments for the economy through financial intermediaries.

Source: The post is based on the article “What does India’s inequality report card have to say?” published in Livemint on 23rd May 2022.