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Business News/ Economy / India among top countries with high income, wealth inequality: UNDP report
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India among top countries with high income, wealth inequality: UNDP report

The 2024 Asia-Pacific Human Development Report, launched on Monday, paints a qualified picture of long-term progress but also persistent disparity and widespread disruption

People walk past stores selling consumer goods in an alley in Dharavi (REUTERS)Premium
People walk past stores selling consumer goods in an alley in Dharavi (REUTERS)

 India has emerged among top countries with high income and wealth inequality but the share of the population living in multidimensional poverty fell from 25 to 15 per cent between 2015-16 and 2019-21, the UNDP said in a new report.

The 2024 Asia-Pacific Human Development Report, launched on Monday, paints a qualified picture of long-term progress but also persistent disparity and widespread disruption, foreseeing a turbulent development landscape and urgently calling for new directions to boost human development.

This persistent wealth divide is driven by various factors. Globalization and technological advances have, for example, created new opportunities for some groups while leaving others behind. This typically results in the owners of capital getting a greater share of national income.

ILO data show, for example, that in Asia and the Pacific labour has a lower income share than the world average.13 As a result, workers have less income to save and invest, further worsening inequality. The most vulnerable in this vicious feedback loop include those working in the informal sector, particularly women. Inequality is further exacerbated by corruption, and weak tax policy and administration, as well as by the lack of effective social safety nets.

In India, between 2000 and 2022, per capita income soared from $442 to $2,389. And between 2004 and 2019, poverty rates (based on the international poverty measure of $2.15 per day) plummeted from 40 to 10 percent. Moreover, between 2015-16 and 2019-21, the share of the population living in multidimensional poverty fell from 25 to 15 percent.

Despite these successes, poverty remains persistently concentrated in states that are home to 45 percent of the country’s population but contain 62 percent of its poor. In addition, many other people are very vulnerable, hovering just above the poverty line. The groups at greater risk of falling back into poverty include women, informal workers, and inter-state migrants. Women are only 23 percent of the labour force.

Amidst rapid growth but persistent disparity, the income distribution has become more skewed. The top 10 percent of the population get 57 percent of national income and the top 1 percent get 22 percent – one of the most unequal income distributions. There are similar gaps in wealth: the top 10 percent of the population controls 65 percent of the nation’s total wealth. There is growing evidence of a strong rise in wealth inequality, mainly in the post-2000 period.

Titled ‘Making our Future: New Directions for Human Development in Asia and the Pacific’, the new report argues that unmet aspirations, heightened human insecurity, and a potentially more turbulent future create an urgent need for change.

Moreover, between 2015-16 and 2019-21, the share of the population living in multidimensional poverty fell from 25 to 15 per cent.

Despite these successes, poverty remains persistently concentrated in states that are home to 45 per cent of the country's population but contain 62 per cent of its poor, the report pointed out.

“In addition, many other people are very vulnerable, hovering just above the poverty line. The groups at greater risk of falling back into poverty include women, informal workers, and inter-state migrants," the United Nations Development Programme (UNDP) said in its report.

Noting that women are only 23 per cent of the labour force, the report said that amidst rapid growth but persistent disparity, the income distribution has become more skewed.

“There is growing evidence of a strong rise in wealth inequality, mainly in the post-2000 period," it said.

The report also pointed out that India is contributing significantly to the growth in the global middle class-encompassing those living between USD 12 and USD 120 a day. India is expected to contribute 24 per cent to the global middle-class growth (192 million people), it said.

While the Asia-Pacific region will account for two-thirds of global economic growth this year, income and wealth disparities are worsening, particularly in South Asia, where the wealthiest 10 per cent control over half of total income, the report said.

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Published: 06 Nov 2023, 09:31 PM IST
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