Infographics 2024

Level of India's Income Inequality: 1967-68 to 2022-23

Rajesh Shukla

The share of total national income held by the top 10% of the population was 36.49% in 1967-68. This figure gradually decreased to 32.86% in 1994-95 and further declined to 27.88% in 2015-16, indicating a trend toward greater income equality. However, this trend reversed dramatically, and by 2020-21, the share of the top 10% surged to 38.60%, the highest level recorded, before dipping slightly to 30.27% in 2022-23. Conversely, the bottom 10% of the population has consistently held between 1.8% and 2.7% of total income over this period, except during 2020-21 (the COVID period), when their share plummeted to a mere 1.09%.

How has income inequality evolved over this period? Initially, in the first 20 years following independence, the Gini index stood at 0.463. It then gradually improved, reaching its lowest point at 0.367 in 2015-16, indicating a more equitable distribution of income at that time. However, the period between 2016 and 2021 saw a sharp reversal of this trend, with the Gini index increasing by 32%, moving from 0.367 to a much higher 0.506. This spike highlights a significant growth in income disparity, exacerbated by COVID-19.

The most recent data from 2021 to 2023 show a notable improvement, with the Gini index decreasing by 23%, from 0.506 to 0.390. This reduction suggests a move towards reversing the previous increase in inequality, potentially influenced by post-pandemic economic recovery measures and interventions aimed at redistributing income more fairly.