World Inequality Lab Report

World Inequality Lab Report

News: According to a paper released by the World Inequality Lab, the shares of income and wealth of India’s top 1% at 22.6% and 40.1% respectively is at their highest historical levels in 2022-23.

About:
 The World Inequality Lab (WIL) is a research center at the Paris School of Economics.
 The WIL aims to promote research on global inequality dynamics.
 It works in close coordination with a large international network of researchers (over one hundred researchers covering nearly seventy countries) contributing to the database.

Key Findings:
 As per the report, in the year 2022-23, top 1% income and wealth shares were at their highest ever historical levels in India: 22.6% and 40.1%.
 India’s top 1% income share is among the very highest in the world, higher than even South Africa, Brazil, and the US, the paper said. The wealth share of the top 1% was lesser in India than in two of these countries: South Africa and Brazil.
 The paper also highlights the levels of disparity among different income groups.
 According to the paper, the top 1% holds an average of Rs 5.4 crore in wealth, 40 times the average Indian.
 However, the bottom 50% and the middle 40% hold Rs 1.7 lakh (0.1 times national average) and Rs 9.6 lakh (0.7 times national average) respectively.
 At the very top of the distribution, the wealthiest ∼ 10,000 individuals out of 92 million Indian adults own an average of Rs 2,260 crore in wealth, 16,763 times the average Indian.

Key recommendations:
 The paper has used multiple sources to build its income and wealth inequality estimates.
 India does not have official income estimates and survey based official statistics on wealth.
 The paper recommends multiple policy measures to address the problem of inequality in India.
 They include restructuring of the tax code to account for both income and wealth, and broad-based public investments in health, education and nutrition.
 The report said a “super tax” of 2% on the net wealth of the 167 wealthiest families in 2022-23 would yield 0.5% of national income in revenues.
 It would also create valuable fiscal space to facilitate such investments, besides serving as a tool to fight inequality.