New Delhi considered as a highly developed city the world over is also home to thousands of slum children living in the small district of Seemapuri unable to even feed themselves properly.

Such stark inequalities exist in just one city and the disparity between different regions is more apparent.

For one, India’s richest 10 % holds 370 times the share of wealth that its poorest hold.

India’s richest 10 per cent have been getting steadily richer since 2000, and now hold nearly three-quarters of total wealth.

Not surprisingly, India still dominates the world’s poorest 10 per cent.

In 2013, the World Bank reported that the number of people world-wide living on less than $1.25 a day had decreased dramatically since the early 1980s. In India the figure fell to 24% in 2011 from 66% in 1979.

Gini index measures the extent to which the distribution of income (or, in some cases, consumption expenditure) among individuals or households within an economy deviates from a perfectly equal distribution.

India has a rank 116 according to Gini Index(2005) which increases faith in the fact that India still has lesser inequality than many other countries and that income inequality has actually decreased over the years further reinforces the fact. Some amount of inequalities are important for healthy functioning of an economy and act like motivators. But all other inequalities of the undesirable level should be done away with.

Reasons for Inequality in India

Inherited Wealth is the problem area as that is a system where merit is not what is rewarded. Instead, it is the bloodline and family ties that matter.

How globalisation backfired
In the early 90s, the economy of the country opened its doors to the world. The rich at that time made the most of it while the poor shopkeepers did not have enough resources to match the international producers and thus the gap between rich and poor widened then.

Political scenario
The Indian government promotes the development of businesses which leads to concentration of power and money in the hands of a few producers in the country.

Growth Factor:

As development proceeds, the earnings of different groups rise differently. The incomes of the upper-income and middle-income groups rise more rapidly than those of the poor.

The explanation lies in the shift of population from agriculture which is a slow growing sector to the modern large industrial sector which grows more rapidly.

Inadequate Employment Generation:

Even if people do not have income generating assets, labour can get them wages. However, for long the increase in employment opportunities has  remained less than the rise in the labour force.

Differential Regional Growth:

Of the large many at the bottom rung of incomes, a very great proportion lives in the poor backward states regions, and most of the few at the top live in the high- income states regions.

This is the geographical facet of income inequalities for the country as a whole. Within the states also there are inequalities, perhaps larger in the poorer states.


The solutions to solving income inequality can be:

Include inequality in political party’s manifesto:  Most politicians target growth which is essential for a country. Political parties also aim at alleviation of the poor. But none of them directly mention about reducing inequalities.

Progressive income tax structure and land reforms:  As a matter of fact, only 10% Indians pay tax and the rich businessmen are able to avoid paying tax through window dressing. The taxes should be made more progressive and according to the contribution to National Income. We should work towards reducing asset inequality through redistributive land reforms but also through inheritance taxes, preventing monopoly of control over water, forests and mineral resources and reducing financial concentration.

Caste and gender based income discrimination: In India, an average female worker of any field is paid less than a male worker in the same field. Caste and gender discrimination still exist. We can tackle bias against caste and gender first of all by recognising the value and dignity of all work (including unpaid work) and all workers (including those in the most difficult arduous and degraded occupations). We should also provide a greater voice to traditionally oppressed and suppressed groups, including by enabling unions and association, and making public and corporate private activity more transparent and accountable to the people generally.

Making media more accessible: Media should be viewed as a tool to appeal for equality and justice and should be used that way.

Access to technology and resources: If technology and resources are available to everyone then inequalities could be reduced effectively. With technology, people can learn basic skills that can fetch jobs.

Widen access to quality basic services: A two-tier system has been created, with largely privatised quality education and health care for those who can pay, and a large population left to fend for themselves with very poor quality public services.

Make women more visible in public life and institutions: It is shocking to see that in India women make up only 5% of the total police force, just two out of 24 Supreme court judges and as we are going through polls right now, only 11% of the last parliament are women.

Ensure inclusive growth: Citizens of the country should make sure that India acts like a mixed economy and government takes enough measures to promote equality.

Archit Pahwa

Archit is a student at SSCBS, DU. The views expressed are based upon the analysis and research that the writer did on the topic from various books, reports and web articles.  The writer regularly writes for Corporate Monks as a research associate. The writer takes personal responsibility for the ownership of the content shared and incase some sources have not been given credit, you can directly mail the writer