In 2014, Narendra Modi won the election in India with promises to reform the economy and tackle corruption, striving to uplift the middle class from the grip of elites and economic difficulties. However, 10 years later, as Modi seeks a third term, economic inequality in India has worsened significantly, surpassing countries like Brazil, South Africa, and the United States, according to a study by the World Inequality Lab. The study shows that income inequality in India is now even worse than it was under British colonial rule.
The gap between the rich and poor has widened into a canyon, with the wealth distribution in India becoming one of the highest in the world. The top 1% now holds a larger share of income and wealth than ever before. The middle 40% of Indians have seen their share of national income decrease significantly over the years, with relative upward mobility slowing down.
Experts attribute the deepening income divide to the structural issues in India’s economy, the lack of focus on the agricultural workforce, and policies that have favored the top 10%. Recent events such as demonetisation, GST implementation, and the COVID-19 lockdown have further exacerbated the economic challenges faced by the majority of Indians, particularly those in the informal sector.
Calls for addressing inequality include implementing a “super tax” on billionaires and multimillionaires, restructuring the tax system, investing in education, and introducing wealth and inheritance taxes. However, with the current political landscape overshadowed by Hindu majoritarian politics, the opposition’s ability to address inequality and hold the government accountable remains uncertain.
The unsustainable nature of rising inequality in India poses a significant challenge for the economy and society, with the future implications remaining unclear.