Financial Inclusion in India and Its Challenges

India’s richest 1% corner 73% of wealth generation: Survey


Mains Paper 3: Economy | Inclusive growth & issues arising from it

From UPSC perspective, the following things are important:

Prelims level: ‘Reward Work, Not Wealth’ report, Oxfam, World Economic Forum

Mains level: Income inequality in India

Rising income inequality in India

  1. The richest 1 percent in India cornered 73 percent of the wealth generated in the country last year
  2. 67 crore Indians comprising the population’s poorest half saw their wealth rise by just 1 percent

Changes since last year

  1. Last year’s survey had shown that India’s richest 1 percent held a huge 58 percent of the country’s total wealth –higher than the global figure of about 50 percent
  2. The wealth of India’s richest 1 percent increased by over Rs 20.9 lakh crore during 2017 — an amount equivalent to total budget of the central government in 2017-18

‘Reward Work, Not Wealth’ report

  1. All these findings are a part of the survey released by the international rights group Oxfam
  2. The annual Oxfam survey is keenly watched and is discussed in detail at the World Economic Forum Annual Meeting
  3. Rising income and gender inequality is among the key talking points for the world leaders at the summit

Status of income inequality

  1. In India, it will take 941 years for a minimum wage worker in rural India to earn what the top paid executive at a leading Indian garment firm earns in a year
  2. In the US, it takes slightly over one working day for a CEO to earn what an ordinary worker makes in a year

Rising billionaires

  1. 2017 saw an unprecedented increase in the number of billionaires, at a rate of one every two days
  2. The billionaire boom is not a sign of a thriving economy but a symptom of a failing economic system
  3. Those working hard, growing food for the country, building infrastructure, working in factories are struggling to fund their child’s education, buy medicines for family members and manage two meals a day
  4. The growing divide undermines democracy and promotes corruption and cronyism
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