India's Income Inequality Persists Despite Reduction in Multidimensional Poverty

  • 08 Nov 2023

India has been identified as one of the countries with high income and wealth inequality, according to the recent 2024 Asia-Pacific Human Development Report by the United Nations Development Programme (UNDP).

Key Points

  • Reduction in Multidimensional Poverty: The report highlights that between 2015 and 16 and 2019-21, India made progress in reducing multidimensional poverty, with the percentage of the population living in such conditions decreasing from 25% to 15%.
  • Persistent Income and Wealth Inequality: Despite reductions in multidimensional poverty, India continues to grapple with high income and wealth inequality.
  • The top 10% of the population receives 57% of the national income, and the top 1% controls 22% of it, making it one of the most unequal income distributions.
  • Wealth disparities are also substantial, with the top 10% controlling 65% of the nation's total wealth. Wealth inequality has shown a significant rise, particularly in the post-2000 period.
  • Regional Concentration of Poverty: The report underscores that poverty remains concentrated in states where 45% of the population resides but contains 62% of the poor.
  • It also highlights that many individuals are on the brink of poverty, including women, informal workers, and inter-state migrants. Women represent only 23% of the labour force.
  • India's Contribution to Global Middle Class: The report notes that India plays a substantial role in the growth of the global middle class, accounting for 24% of the growth, equivalent to 192 million people.
  • Regional Income Disparities: The Asia-Pacific region is expected to contribute two-thirds of global economic growth.
  • However, the report observes that income and wealth disparities are increasing, particularly in South Asia, where the wealthiest 10% control over half of total income.