A key feature of the rising income inequality is due to the growing importance of capital income derived from interest, dividends, retained earnings and rents. https://thewire.in/economy/the-dark-underbelly-of-indias-rising-income-inequality
There is a reason why India’s economic growth has been so lop-sided. Nobel prize winning economist Amartya Sen noted that since independence, India’s income inequality has been mainly driven by low investment in good-quality education and healthcare. So, while the educated and healthy workers in upper-income groups take advantage of new opportunities to make more money in a growing economy, poorly educated and unproductive workers in low-income groups struggle to make ends meet.
Today, India is one of the most unequal countries in the world where the top 1% income group captures a larger share of the pie than it does in South Africa, Brazil, or the United States (World Inequality Report 2022).
A key feature of the rising income inequality within countries is due to the growing importance of capital income derived from interest, dividends, retained earnings and rents. This has been observed in India too, where increasing share of capital incomes of the rich has been one of the key drivers of rising income inequality in the post-liberalisation period. Meanwhile, data shows that the incomes of people in the middle 50% of the distribution are shrinking.
by Dev Kar
24/09/2024