Income and Wealth Inequality in India : GS-1 Mains 

Short notes or Micro Notes 

Question : Analyze the factors contributing to extreme inequality and evaluate the suggestions put forth to address this issue


Source: World Inequality Lab report “Income and Wealth Inequality in India, 1922-2023: The Rise of the Billionaire Raj”

Key Findings:

  • Average Income Growth: 2.6% per year (real terms) between 1960 and 2022.
  • Rise of Billionaires: From 1 in 1991 to 162 in 2022 (very high net worth individuals with over $1 billion).
  • Increase in Income Tax Payers: From under 1% pre-1990s to 9% of adults (2017-2020).
  • Extreme Inequality:
    • Top 1% income share: 22.6% in 2022-23 (highest since 1922, higher than US, South Africa, Brazil).
    • Top 1% wealth share: 40.1% in 2022-23 (highest since 1961, higher than US, China).
  • Potential Underestimation: Poor quality economic data might mask even higher inequality.

Possible Factors:

  • Regressive tax system (might favor wealthy).
  • Lack of education trapping people in low-paid jobs.
  • Surge in foreign investment post-1992.


  • Super tax on billionaires and multi-millionaires.
  • Restructured tax including wealth for social investments (education, healthcare, infrastructure).


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