Report on Financial Inequality: The Wealthiest 10% in India Control Over 64% of the Income

New Delhi: If protests across the country, demanding government recruitment, and against the rampant privatization juxtaposed with the media attention of Anant Ambani’s pre-wedding celebrations bring out any thought, it is if the rich are only getting richer and poor are getting poorer. A new study by Bahutva Karnataka puts all such doubts to rest.

The research titled 'Employment, Wages, and Inequality' conducted by Bahutva Karnataka, a coalition of civil rights activists, advocates and organizations, has brought attention to significant disparities in income distribution within India.

Using data from sources such as the Periodic Labour Force Survey (PLFS), the now-defunct Employment-Unemployment Survey and the World Inequality Database, representing around 49 crore workers in the country, the report uncovered several troubling trends.

Firstly, it highlighted the stark income inequality present, with the top 10 percent of earners holding 63 percent of the total income share in 2012. Moreover, the study revealed that approximately 42 percent of graduates below the age of 25 were unemployed, indicating significant challenges in securing meaningful employment for educated youth.

Another notable finding was the significant increase in self-employment rates, particularly among women, between 2011-12 and 2022-23. This rise in self-employment may reflect a response to limited opportunities in the formal job sector.

Additionally, the report pointed out stagnant household earnings among the poor, leading to more women resorting to unpaid housekeeping roles or assisting in family businesses. Shockingly, one in three women from impoverished households was found to be working without pay, highlighting the dire economic circumstances faced by many.

Furthermore, despite recommendations from an expert committee to increase minimum floor wages, the study revealed stagnant wages across all main categories of employment. Nearly 30 crore workers were reported to be earning less than the recommended threshold amount of ₹375 per day, as suggested by the expert committee.

This disparity was particularly evident among casual-wage workers, self-employed individuals, and regular-wage workers, with a significant portion earning below the threshold wage.

Moreover, more than one in three households were found to be earning below the recommended minimum income level, exacerbating financial insecurity among vulnerable populations.

The Mooknayak talked to Professor Rajendran Narayanan who teaches in the School of Arts and Sciences at Azim Premji University, Bangalore who worked on the report.

There will be a caste-wise analysis of the study which will be a part of a nine-part series to be released in the coming days. According to him, a noteworthy revelation that came up in the study is the fact that wages for over 49 crore workers have been stagnant for the last decade.

“Marginalised groups like Dalit and Adivasi communities are overrepresented in the working class, so the data makes it clear that most of the communities have not been receiving adequate attention,” explained the professor.

“Nominal GDP per capita has increased 60% in the last 10 years but we just saw that the wages have been stagnant, which proves that the rich have only gotten richer.”

In 2019, the government of India had constituted the ‘Anoop Satpathy committee’ to determine the minimum wage. The report released by it had stated the national minimum wage must be Rs 375 per day per person. But the study, professor Rajandran claims, shows 30 crore workers earn less than that.

Commenting about this study, Dr. Maya John who teaches at Delhi University observed, “Rapidly growing financial inequality in the country is a worrying and unprecedented trend. Against this distressing backdrop, it is crucial that the Indian state handholds the most marginalised sections of society.”

According to her, the ruling dispensation has simply accelerated the rate of privatisation of public services and utilities. In this way, the state is abdicating its role and responsibility, which is only adding to the precarity of the common masses.

Dr. Nandita Narayn, professor and president of Democratic Teachers Front had few strong words to add. The professor asserted that the figures mock our democracy.

Taking a dig at the central government, she said, “Instead of working for the welfare of the poor and dispossessed, who contribute more than 65% of government revenue, the present government is aggressively pursuing policies (education policy being one of them) that will make the rich richer and poor poorer.”

“Depriving the marginalised sections of quality education, decent healthcare and employment/ livelihood is a betrayal of the mandate given by the people. Instead of increasing taxes on wealth, property and inheritance, the government is continuously taxing the poorest on essential food items, diesel, petrol, cooking gas etc.”