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WORLD INEQUALITY REPORT from Vajirao & Reddy Institute

By : Author Desk Updated : 2025-12-19 14:58:09

WORLD INEQUALITY REPORT

WHY IN NEWS?
  • The World Inequality Report 2026 has been released.
  • It shows that income and wealth inequality in India are among the highest in the world.
  • Key finding: Top 10% earn 58% of India’s income; bottom 50% earn only 15%.
WHAT THE REPORT SAYS ABOUT INDIA? Income Inequality
  • Top 10% earners ? 58% of national income
  • Bottom 50% ? only 15%
  • Earlier Report 2022: top 10% had 57%, bottom 50% had 13%. ? inequality is not improving much.
Wealth Inequality (even worse)
  • Top 10% hold 65% of total wealth
  • Top 1% hold around 40% of all wealth
  • Bottom 50% hold only tiny share.
Average Income & Wealth (PPP terms)
  • Average income per person: 6,200 euros
  • Average wealth per person: 28,000 euros
Gender Inequality
  • Female labour participation: 15.7% — almost no improvement in last decade.
  • Women earn:
    • 61% of men's income per working hour (excluding unpaid work)
    • 32% when unpaid household work is included
  • Women’s share in labour income:
    • South & Southeast Asia ? 20%
    • MENA (Middle East & North Africa) ? 16%
    • Europe/North America ? around 40%
GLOBAL TRENDS Extreme Global Wealth Concentration
  • Top 0.001% (about 60,000 rich people globally) own 3× more wealth than the bottom 50% of humanity.
  • Global top 10% own 75% of all wealth.
  • Global bottom 50% own only 2%.
  • Top 1% alone hold 37% of world wealth.
Ultra-rich Inequality
  • Top 0.001% average wealth ? ~1 billion euros
  • Top 1 in 100 million (56 people worldwide) ? 53 billion euros each
This shows inequality exists not only between rich and poor, but also within the rich. INDIA’S POSITION IN GLOBAL INCOME DISTRIBUTION
  • 1980 vs 2025 Comparison
    • 1980:
      • India was mostly in the bottom half of global income ranks.
      • China was also at the bottom.
  • 2025:
    • China moved upward ? large population entered global middle class.
    • India slipped backward ? most people now in bottom 50%
    • Sub-Saharan Africa also remains in lowest brackets.
CLIMATE INEQUALITY
  • Bottom 50% of world ? only 3% of emissions from private capital.
  • Top 10% ? 77% of emissions.
  • Top 1% ? 41% of emissions alone.
  • This shows climate crisis is driven mainly by the rich, not the poor.
WHY INEQUALITY PERSISTS? a) Policy Failures in Taxation
  • Ultra-rich often pay lower effective taxes than middle-class groups.
  • Billionaires & centi-millionaires avoid tax through loopholes.
  • Governments lose money needed for:
    • education
    • healthcare
    • climate action
    • welfare programmes
b) Low Public Investment
  • Weak investment in:
    • schools
    • healthcare
    • nutrition
    • childcare
? causes lifelong inequality. c) Weak Social Security
  • Cash transfers, pensions, and unemployment benefits are limited.
POSSIBLE SOLUTIONS 1. Progressive Taxation
  • Rich pay more, poor pay less. Helps reduce extreme gaps.
2. Strong Public Services Free or affordable:
  • schools
  • hospitals
  • nutrition programmes
  • childcare
? reduces early-life inequality. 3. Social Support
  • Pensions
  • Unemployment benefits
  • Direct cash transfers
? helps poorest households.   Note: Connect with Vajirao & Reddy Institute to keep yourself updated with latest UPSC Current Affairs in English. Note: We upload Current Affairs Except Sunday.
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