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Inequality in India is a Policy Choice and Not an Accident

Opinion

Business Honor - Wealth Inequality and Digital Divide

Business Honor
07 November, 2025

Wealth inequality and the digital and educational divide have made it much harder for the poor.

A G20 report published on November 4 cautions that global inequality is now at ‘emergency’ levels where democracy, economic stability, health and climate progress are all in jeopardy. The report found that between 2002 and 2024, the top 1 per cent of the global population increased their average wealth by 41 per cent, compared to the bottom 50 per cent. Nobel Laureate Joseph Stiglitz and the G20 Extraordinary Committee of Independent Experts on Global Inequality prepared the report. Remarkably, an economically poorer country like India displays a higher than average elite resource capture with the top 1 per cent of the Indian population increasing their wealth by an extraordinary 62 per cent. The figure is 54 per cent in China.

Wealth is not the same as income, which is current flow of earnings over a period (wages, earnings, or investments). However, they are related since wealth can generate income and income can be used to generate wealth. The discontent of uneven wealth was not always so great. A study by World Inequality Lab pointed out that wealth inequality in India declined after Independence, and accelerated from the 1990s onward. Similarly, wealth accumulation among the richest Indians has substantially increased since the 2000s. It is wrong to see it as a natural side effect of growth and business that creates wealth inequality.

Wealth inequality and the digital and educational divides have resulted in the lack of access poor people have to enabling State institutions (like the judiciary and the bureaucracy) to obtain services available to all citizens. As a result, the erosion of trust among the poor in democratic institutions has been aggravated, making them vulnerable to populist and authoritarian leaders. That danger and 'emergency' the G20 report appears to be signaling about wealth inequality. However, as the Stiglitz report suggest, "Inequality is a policy decision. The negative trend can be reversed."