close
close

Rich 1% hold 22% of national income while 15% of Indians earn less than Rs 5,000 a month: report

According to a recent International Monetary Fund (IMF) report, India will have nearly eliminated extreme poverty by 2020-21 when food subsidies are factored in.

However, in another World Bank report, extreme poverty in the country fell by 12.3 percentage points between 2011 and 2019, also showing that rural areas are doing better than urban centers.

A statistical view

Poverty reduction rates in rural areas are higher than in urban areas. We find that extreme poverty in India fell by 12.3 percentage points between 2011 and 2019, but at a significantly lower rate than in 2004-2011‘ NDTV quoted the newspaper as saying, ‘Poverty in India has fallen over the past decade but not as much as previously thought.’

While the state of economic inequality looks better given the two recent reports, some called for India to raise its poverty line from the current extreme poverty line of $1.90 per person per day to the lower-middle-income (LMI) poverty line of 3.20 USD, which is about 68 percent higher.

Considering the scale of the troubles during the period of independence in 1947, this is still a milestone in two generations. In addition, it also coincides with India becoming the fifth largest economy in the world.

The State of Inequality Report

India currently stands out as a “poor and very unequal country with a wealthy elite,” with the top 10 percent owning 57 percent of total national income. This also includes 22 percent held by the top 1 percent, while the bottom 50 percent collectively account for about 13 percent in 2021, according to the World Inequality 2022 report.

The report also points to a significant decline in global income in 2020, with around half of the decline coming from rich countries and the other half from low-income and emerging economies.

Extrapolation of PLFS 2019-20 earnings data found that a monthly wage of £25,000 is in the top 10 per cent of total earnings earned in the country, suggesting astonishing earnings disparities. Meanwhile, the total share of the top 1 percent accounts for about 6-7 percent of total income, while the top 10 percent accounts for a third of all income generated.

In addition, the nation’s top 1 per cent accounts for 5 to 7 per cent of the country’s income, the report added, while around 15 per cent of the current workforce earns less than £5,000 a month.

Also Read: Andhra’s Jyothi Yarraji Breaks National Record in Women’s 100m Hurdles for Third Time in 2 Weeks

Leave a Comment