Why in news?

• According to the recently released World Inequality Report 2022, India is now among the most unequal countries in the world.

About World Inequality Report 2022

Released by:

• World Inequality Lab, which aims to promote research on global inequality dynamics.
• This report presents the most up-to-date synthesis of international research efforts to track global inequalities.

Key Points of the Report

• Distribution of Wealth: The poorest half of the global population “barely owns any wealth” possessing just 2% of the total, whereas the richest 10% of the global population own 76% of all wealth.
• The Middle East and North Africa (MENA) are the most unequal regions in the world, whereas Europe has the lowest inequality levels.
• Gender Inequalities: Women’s share of total incomes from work (labour income) was about 30% in 1990 and is less than 35% now. Inequalities within countries are now greater than those observed between countries. At the same time, the gap between the average incomes of the top 10% and the bottom 50% of individuals within countries has almost doubled.
• Rich Countries Poor Governments: Over the past 40 years, countries have become significantly richer, but their governments have become significantly poorer. The currently low wealth of governments has important implications for state capacities to tackle inequality in the future, as well as the key challenges of the 21st century such as climate change.

India Specific Findings

• Distribution of Wealth: India stands out as a poor and very unequal country. The top 1% of the population hold more than one-fifth of the total national income in 2021 and the bottom half just 13%.
• The economic reforms and liberalization adopted by India have mostly benefited the top 1%.
• Average Household Wealth: It stands at Rs. 983,010. It has been observed that the deregulation and liberalisation policies implemented since the mid-1980s have led to “one of the most extreme increases in income and wealth inequality observed in the world”.
• Gender Inequalities: The female labour income share is equal to 18% which is significantly lower than the average in Asia [21%, excluding China] and this value is one of the lowest in the world.