The Hush Post: India’s income inequality increased manifold in the last 35 years, with top 10 per cent earning more than 55 per cent of country’s total income in 2016, according to the World Inequality Report 2018 published by World Wealth & Income Database.India’s income inequality matches that of sub-Saharan countries like Africa and Brazil, where top wealth-earners account for a high share of national income, Mint quoted the report as saying.
World Wealth & Income Database is a global research organisation that tracks information on income distribution. The report also stated rise in income inequality in India has been more gradual since 1980.
The report advised for “tax progressivity”, which means income taxes are levied based on a person’s ability to pay tax and the rate increases as income levels progress, said the business daily.
“Higher taxes on the rich” is an effective tool to address inequality in a country, noted the report. The report also pointed out that rising income inequality can lead to political, social and economic implications.
French economists Thomas Piketty and Lucas Chancel had in September found in their research paper that India’s income inequality was at its highest since 1922.
Recognising the nuances of the global nature of income inequality, the two economists had said back then: “India’s dynamics are striking: It is the country with the highest gap between the growth of the top one percent and growth of the full population.”
Meanwhile, the report published by the World Wealth & Income Database said India has been trying to tackle income inequality with a combination of direct transfer of entitlements to the intended beneficiaries and schemes meant to improve access to energy and finance by the poor.
The report advocated higher public spending in education to reduce income inequality and setting up an international registry of financial asset ownership for curbing tax evasion as some of the steps towards equitable growth.
With the top-earners’ group accounting for 37 per cent of the national income, the report found Europe as the best-performing region, followed by China with 41 percent and Russia as 46 percent.