Rich 1% Hold 22% Of National Income While 15% Indians Earn Less Than Rs 5,000 Per Month: Report

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

However, in another report by the World Bank, extreme poverty in the country has dipped by 12.3 per cent points between 2011 and 2019, which also recorded rural areas performing better than urban centres.

A Statistical View

"Poverty reduction rates in rural areas are higher than in urban areas. We find that extreme poverty in India has declined by 12.3 percentage points between 2011 and 2019 but at a rate that is significantly lower than observed over the 2004-2011 period," NDTV quoted the paper titled 'Poverty in India Has Declined over the Last Decade But Not As Much As Previously Thought'.

While the economic inequality state is looking better given the two recently published reports, some clamoured for India to increase its poverty line from the current extreme poverty line of USD 1.90 per person per day to the lower-middle-income (LMI) poverty line of USD 3.20, which is approximately 68 per cent higher.

Taking into account the scale of the issues during the time of Independence in 1947, this is still a landmark achievement in two generations. Furthermore, it also coincides with India turning itself into the fifth-largest economy globally.

The State Of Inequality Report

India currently sticks out as a "poor and very unequal country, with an affluent elite", with the top 10 per cent holding 57 per cent of the total national income. This also includes 22 per cent being held by the top 1 per cent, while the bottom 50 per cent added up to approximately 13 per cent in 2021, as per the World Inequality 2022 report.

The report also points toward a significant drop in global income in 2020, with approximately half the dip in rich countries and half in low-income and emerging nations.

Extrapolation of the income data from PLFS 2019-20 revealed that a monthly salary of ₹25,000 is amongst the top 10 per cent of total incomes earned in the country, pointing towards stunning levels of income disparity. Meanwhile, the total share of the top 1 per cent accounts for around 6-7 per cent of the total incomes earned, with the top 10 per cent accounting for one-third of all the revenues made.

Furthermore, the top 1 per cent of the nation accounts for 5 to 7 per cent of the country's income, the report added, while approximately 15 per cent of the current working population earns less than ₹5,000 a month.

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