Inequality in India: Upper castes hold nearly 90% of billionaire wealth

A recent report from World Inequality Lab titled, ‘Towards Tax Justice and Wealth Redistribution in India’, has laid bare the stark economic disparities that plague India. The findings are sobering: nearly 90 per cent of the country’s billionaire wealth is concentrated in the hands of the upper castes, highlighting a deep socio-economic divide.

Billionaire wealth dominated by upper castes

The analysis in the report unveils a staggering 88.4 per cent of India’s billionaire wealth is controlled by upper castes. In contrast, while Scheduled Castes (SCs) and Scheduled Tribes (STs) together form a significant part of India’s workforce, their representation among enterprise owners remains disproportionately low.

This discrepancy is not limited to the billionaires; the All-India Debt and Investment Survey (AIDIS) for 2018-19 indicates that upper castes hold nearly 55 per cent of the national wealth. This concentration of wealth also highlights the persistent economic inequalities rooted in India’s caste system.

Caste influences financial demographics

Caste continues to play a critical role in determining access to essential resources such as education, healthcare, social networks, and credit — all crucial for entrepreneurship and wealth creation. Historically, Dalits faced prohibitions on land ownership in many regions, severely curtailing their economic progress.

This disparity extends beyond billionaire rankings. The ‘State of Working India, 2023’ report from Azim Premji University further highlights these disparities, showing SCs and STs are underrepresented among enterprise owners relative to their workforce participation. SCs, comprising 19.3 per cent of the workforce, account for only 11.4 per cent of enterprise owners. Similarly, STs, making up 10.1 per cent of the workforce, represent just 5.4 per cent of enterprise owners.

Wealth inequality

Wealth inequality is evident across various socio-economic groups. According to the National Family Health Survey, just 12.3 per cent of SCs and 5.4 per cent of STs belong to the highest wealth quintile. In contrast, more than 25 per cent of SCs and 46.3 per cent of STs are classified in the lowest wealth category.

The Other Backward Classes (OBC) community shows a similar trend, with 16.3 per cent of its population in the lowest wealth category and 19.2 per cent in the highest wealth category.

India and the ‘Billionaire Raj’

Since the 1980s, India’s trajectory towards heightened income and wealth inequality has been notable, accelerating notably from the 2000s onwards. Notably, between 2014-15 and 2022-23, there has been a striking surge in inequality at the upper echelons. Presently, the top 1 per cent commands more than 40 per cent of the nation’s total wealth, a substantial increase from 12.5 per cent in 1980. Furthermore, their share of the total pre-tax income has risen to 22.6 per cent, up from 7.3 per cent in 1980.This dramatic rise in inequality has ushered in the ‘Billionaire Raj’, which Is now more unequal than the British rule, positioning India among the most unequal countries globally.

Current estimates show that it takes just Rs 290,000 per year to be in the top 10 per cent of income earners and Rs 20.7 lakh to join the top 1 per cent.It should be noted that the median adult earns approximately Rs 100,000, with the poorest individuals having virtually no income. The bottom 50 per cent of the population earns just 15 per cent of the total national income.

How much is needed to be wealthy in India?

To comprehend the skewed income distribution, one needs to be near the 90th percentile to earn the average income. In terms of wealth, an adult needs Rs 21 lakh to be in the wealthiest 10 per cent and Rs 82 lakh to enter the top 1 per cent. The median adult holds approximately Rs 430,000 in wealth, with a significant portion owning almost no wealth.

The bottom 50 per cent collectively holds just 6.4 per cent of the total wealth, whereas the wealthiest 1 per cent commands 40.1 per cent. Even more strikingly, the top 0.001 per cent alone claims 17 per cent of the wealth. Remarkably, fewer than 10,000 individuals in this elite bracket control nearly three times the combined wealth of the bottom 50 per cent.

This article is originally published on https://www.business-standard.com/india-news/inequality-surges-in-india-upper-castes-hold-90-of-billionaire-wealth-124062700343_1.html