Economy & Equity
The World Bank's assessment is testament to the fact that any study of inequality in India requires a multi-dimensional and inter-sectional approach.
How to Measure India's Inequality - The Wire
the World Bank report which has claimed a drastic reduction in the state of inequality in India between 2011 and 2022 . the Ministry of Statistics and Programme Implementation (MoSPI) also released the Sustainable Development Goals (SDG) National Indicator Framework Progress Report 2025, which tracks India’s progress across 17 SDGs using 284 indicators. This report presents time-series data from various line ministries and offers a macro-level diagnostic lens into the country’s trajectory toward Agenda 2030, a United Nations plan adopted in 2015 to guide global development efforts.
There are serious issues with the larger interpretation of the World Bank assessment where consumption-based inequality is mapped with income-inequality scales across countries – an effort which is like comparing apples with oranges.
The Access (In)Equality Index (AEI) 2025, developed by the Centre for New Economic Studies (CNES), can serve as a critical component to this debate. It draws largely from the same official data sources, but reorganises indicators through a disaggregated, intersectional lens grounded in the 4A framework: availability, affordability, approachability, and appropriateness.
It then evaluates these across five measurable pillars – access to basic amenities, access to healthcare, access to education, access to socio-economic security, and access to legal recourse – thereby capturing the often overlooked distributive aspects of the income-wealth based criteria on which most ‘inequality’ and ‘poverty’ measurement studies are based on. These aspects are also overlooked in the SDG-NIF analytical framework.
by Deepanshu Mohan
22/07/2025
The Future of Inequality│Abhijit Banerjee(MIT, Professor of Economics)
World Knowledge Forum
MIT Professor Abhijit Banerjee is an economist who believes in "good economics in hard times. Winner of the 2019 Nobel Prize in Economics, he is leading the global discourse on inequality. In this session, he will be in conversation with Yoonjae Whang, Professor of Economics at Seoul National University, who has used econometrics to understand the causes and solutions to some of the most pressing socio-economic issues, including optimal asset allocation, income inequality, youth poverty, and aging.
One of the biggest problems affecting middle-income groups is that their incomes have stopped growing at the rate at which their expenses are rising. There is no longer a corelation between productive work and income gains.
According to income tax data and other reports, the average income for middle-class earners has stayed around Rs 10.5 lakh per year for more than ten years now. Adjusted for inflation, the real value of their earnings has dropped sharply. https://scroll.in/article/1082346/a-hidden-debt-crisis-is-silently-wrecking-the-dreams-of-indias-middle-class
The consumer purchasing power of this income group has fallen by about one-third over the past decade. This means people can afford much less today than they could ten years ago, even though their salaries have stayed the same. As a result, many families are cutting down on essential expenses like healthcare, education and daily consumption just to balance their monthly budgets.
The constant stress of trying to manage monthly expenses with limited income is taking a mental toll. Many middle-class families live with daily financial anxiety – the worry of emergency expenses, the guilt of cutting corners and the fear of slipping further down the economic ladder. These burdens rarely appear in official statistics.
Government policy, so far, has not responded meaningfully. The new tax regime in Budget 2025 raised the zero-tax limit to Rs 12 lakh. While this sounds like major relief, it helps only those who do not claim exemptions and deductions.
Together, these data-trends show that the average middle class person is losing their economic strength and socio-emotional stability. What was once recognised as an aspirational class known for planning, saving, and striving is now borrowing, and struggling just to stay afloat and this indicates a serious concern.
15/05/2025
The wealthier the Indian families are, the lesser the income they report relative to their wealth, a paper by Ram Singh, Delhi School of Economics (DSE) director and a permanent member of the Monetary Policy Committee of the Reserve Bank of India, reveals, suggesting that wealthier families under-report their income.
“On average, the total income reported by the bottom 10 percent of individuals is more than 120% of their wealth; for the wealthiest five percent of individuals, it is just about 3.7 percent of their wealth”, the paper, Do the Wealthy Underreport their Income?, states.
The study gives insight into the stark reality of rising inequality in the country where Indians with means remain better placed to under-report their income, for instance, by under-reporting their rental income, or disguising their taxable income as tax-free, than Indians with lesser means.
by Udit Bubna
States are increasingly borrowing to finance subsidies. This reduces fiscal space for capital and other developmental expenditure, compromising long-term growth.
While subsidies can be effective tools for poverty alleviation and reducing inequality, their fiscal sustainability has become increasingly questionable, particularly in the challenging post-pandemic economic environment.
In a recent study (Amarnath et al. 2024), I along with my co-authors, analyse budgetary data from seven Indian states – Punjab, Rajasthan, Uttar Pradesh, Odisha, Andhra Pradesh, West Bengal and Nagaland – for the period between 2018-19 and 2022-23 https://theprint.in/opinion/state-subsidy-burden-india-fiscal-health/2551909/
Overview of findings
Overall, we see that revenue deficits have become persistent, and fiscal space has shrunk dramatically. States with revenue deficits are spending over 20 per cent of their revenue expenditure on subsidies, while their fiscal space has shrunk to less than 50 per cent of revenue receipts. Committed expenditures – including salaries, pensions, and interest payments – now consume over 80 per cent of revenue receipts in states like Punjab (81.5 per cent) and Kerala (71.8 per cent). This leaves limited room for developmental spending, a concern highlighted by recent analysis by the Reserve Bank of India (RBI, 2022).
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- To BEST: Why are we waiting for hours?