A new study finds that India's wealth gap has widened dramatically during Prime Minister Narendra Modi's 10 years in power, with the richest 1% now owning more than 40% of the country's wealth. A study by economists including Thomas Piketty, a well-known expert on inequality, shows that the top 1% of Indian income earners (about 9.2 million people) account for 22.6% of total income and more than 40% of India's total wealth.
This is the highest proportion since data became available in the 1920s. That growth, they say, has largely come at the expense of the middle class.
"The 'billionaire caste', headed by India's modern bourgeoisie, is now more unequal than the 'British caste' headed by the forces of colonialism," the study's authors wrote. They warned that further divisions in inequality could exacerbate social unrest in the country.
The researchers said the inequality gap widened after India's economy liberalized in the early 1990s, but "the increase in high-end inequality, in terms of wealth concentration, was particularly pronounced between 2014-15 and 2022-23."
"The middle class (the middle 40%) appears to have suffered greatly in the post-liberalization era of high growth and rising inequality," the researchers said. From 1961 to 1981, the middle class and the top 10% held almost the same share of wealth. But over the next 30 years, the share of the top 10% of earners continued to rise, while the share of the middle 40% continued to decline, falling to 31% in 2012 and 29% in 2023.
Without policy intervention, the inequality gap may not close on its own, say the researchers, who recommend "a super tax on India's billionaires and multi-millionaires, along with a restructuring of tax plans to include income and wealth". They say the money could be used to fund major investments in education, health and other public infrastructure.