Benefits of liberalization did not reach the poorest sections of the population
The disparity between the rich and the poor became wider in pandemic times. This was revealed in the World Inequality Report 2022, which was released on Tuesday.
The report has revealed that India is such a poor country where disparity is very widespread. The report shows that on one hand, the number of people living in extreme poverty is increasing, the wealth of the rich is increasing, on the other hand, at an even faster rate.
World Inequality Report 2022 reveals that 1% of the population has 22% of the nation’s wealth
While the average income of an adult in India is Rs 2,04,200, 50% of the population could earn just Rs 53,610 annually. The top 10% of the population earn 20 times the amount earned by half the Indian population annually. 57% of the nation’s income goes into the coffers of this 10% population.
The richest 1% of the population has 22% of the nation’s wealth. This year, the income of the lower 50% population has sank by 13%. The preface of this report has been written by Noble Prize winner Abhijit Banerjee.
1% richest gobbled most of the income generated by the economic liberalization
The report reveals that in British Era, in between 1858 to 1947, this disparity was wider and 10% of the population had 50% of the nation’s wealth. After India obtained Independence and a number of Five Year economic programs were started, the disparity reduced between 35 to 40 percent.
Opening of different sectors of the economy and relaxation of rules and tariffs led to a steep rise in the wealth of the richest 1% of the population. The 1% richest gobbled most of the income generated by the liberalization of the economy.
The capitalist theory that the benefits will trickle down to the lower income section of the society remained a myth, which was never realized. Improvement in the living standard of the 50% population, which included the lower and middle-income group, was very slow.
50% of the population owns no property
World Inequality Report 2022 reveals that the average personal assets of Indians are 9, 83,010 rupees while 50% of the population owns no property. The total assets of this section of the population are 66,280 rupees which accounts for just 6% of the total assets. The middle-class also owns only 29.5% of the property while the top 10% population own 65% of the assets. The richest 1% own 33% of the total assets of the nation.
The report has also, for the first time, revealed disparity in income based on sex. Income disparity based on sex in India is 18%, which is lower than the average in Asia – 21%.
The disparity report also revealed that public sector companies have seen a steep fall while there has been a huge surge in private enterprises. Public sector services like schools, universities, hospitals, public buildings and similar public utility services have fallen in the course of the COVID-19 pandemic. Private assets which grew by 290% in 1980 jumped to 560% in 2020. The disparity is lowest in Europe while it is the highest in Middle East and South America.