Rising Income and Wealth Inequality in India: Challenges and Policy Solutions

Rising income and wealth inequality in India can be checked through various policy interventions, including progressive taxation, wealth taxes, and public investments in education, healthcare, and infrastructure. Additionally, addressing uneven economic growth and promoting inclusive, equitable, and sustainable growth is crucial.

The World Social Report 2025 highlights rising global inequality, economic insecurity, and declining trust in governments. It identifies several key issues, including persistent inequality despite poverty reduction gains, fragile livelihoods, and the impact of climate and conflict. The report calls for a global policy consensus centered on equity, economic security, and solidarity to address these challenges.

Rising Economic Insecurity: 60% of the global population experiences economic insecurity, with over 690 million people still in extreme poverty. Persistent Inequality: Despite poverty reduction gains, income inequality widened in two-thirds of countries; the richest 1% hold more wealth than 95% of humanity.

In 2025, rising income and wealth inequality in India is a significant concern. While the country's economy is growing, the gap between the rich and poor is widening, with the top 1% controlling a disproportionate share of national wealth. This inequality impacts various aspects of life, including economic opportunities, social mobility, and overall well-being.

In 2025, India is facing the challenge of rising inequality, particularly in terms of income and gender disparities. While India has made progress in poverty reduction and HDI, income and gender inequalities are significantly impacting these gains, as reflected in the 2025 Human Development Report. To address this, the government is encouraged to strengthen inclusive initiatives like MGNREGA and Jan Dhan Yojana, and to focus on reforms in land rights, healthcare, and education.

In India, the rich have seen a significant rise in their share of national income and wealth, leading to a widening gap between the rich and the poor, particularly since the early 2000s. By 2022-23, the top 1% held 22.6% of national income and 40.1% of national wealth. This concentration of wealth and income places India among the most unequal countries globally.

Government reduced corporate tax slabs from 30% to 22%, while excise duties and GST on goods and services were substantially increased.

Approximately 64% of the total GST in the country came from the bottom 50% of the population, while only 4% came from the top 10%.

Telecom and civil aviation benefitted the most from LPG reforms while agriculture and small-scale industries remained neglected.

Large proportion of India's workforce employed agriculture and small-scale industries, often receives low wages, and lack of social security.

Today, 44% of the world's population lives below the World Bank's poverty line of $6.85 (PPP). Meanwhile, the richest 1% control 45% of global wealth. In 2024, billionaires' wealth increased by a rate three times faster than 2023. Most billionaire wealth is taken, not earned: 60% of billionaire wealth comes from inheritance, cronyism and corruption or monopoly power.

By controlling digital ecosystem, Big Tech corporations from north control computer-mediated experiences, giving them direct power over political, economic and cultural domains of life.

Multinational corporations (MNCs) of Global North dominate global supply chains, benefitting from cheap labour and the continued extraction of resources from the Global South.

Between 1995 and 2015, US$242 trillion (in 2010 US$) was extracted by the Global North in this way. Global governance institutions are informally dominated by Global North.

As with most crises, it’s the world’s poorest countries that are getting hit the hardest. Many of these countries, already in debt distress, find themselves even more squeezed for resources. Online gig work is a vital aspect of the labor market and a source of income—but only for those who can access it. And let’s not forget today’s refugee crisis. Better migration policies can not only help alleviate the crisis—they can also help boost economic growth and prosperity.

India has made significant strides in reducing poverty over the past decade, with notable declines in both poverty headcount and multidimensional poverty. Poverty headcount, measured by the number of people living below a certain income threshold, has fallen dramatically. For example, the poverty rate at the World Bank's $3.65 per day poverty line fell from 61.8% in 2011-12 to 28.1% in 2022-23, according to the Press Information Bureau (PIB). Similarly, extreme poverty (living on less than $2.15 per day) declined from 16.2% to 2.3% during the same period.

The way forward is to promote policies that create job opportunities and support entrepreneurship, especially in rural areas and for marginalized communities.