Lucas Chancel of World Inequality Lab at Paris School of Economics, on Income Inequality in India

Last updated on 17th Dec. 2017

Today's The Hindu carried this interview of Lucas Chancel: High growth does not necessarily mean high inequality, says Lucas Chancel, http://www.thehindu.com/business/Economy/high-growth-does-not-necessarily-mean-high-inequality-says-lucas-chancel/article21653028.ece, 14th Dec. 2017.

Lucas Chancel's bio can be seen here: http://www.lucaschancel.info/biography.

The India related figures of the World Inequality Lab is available here: http://wid.world/country/india/.

Chancel asks for more data to be released by the Indian government so that they can better assess the inequality data. So the figures Chancel gives may be based on limited data and I wonder whether Indian govt. agencies would agree with those figures. I request readers to keep that in mind as they see some key figures from the above interview and the India page of the World Inequality Lab. which are given below:

1) Income growth for the average Indian is close to 4% per year (after taking inflation into account). The graph in World Inequality Lab (WIL) India page for "Evolution of average income" shows a steady but slow rise from India's independence in 1947 to late 1980s, a sharper rise from late 1980s to early 2000s, followed by even sharper rise from early 2000s onwards till 2016.

2) Income growth for poorest 50% of population was 2.5% per year since 2000.

3) Top 1% national income share in India was 13% in 1947, 14.1% in 1957, 12% in 1964, 13% in 1970, 10.1% in 1974, 6.1% in 1982 (this is an outlier figure in the graph), 10% in 1992, 13.8% in 1997, 15.1% in 2000, 19.3% in 2005 and 21.7% in 2013. So it was largely in the band of 10% to 14% from India's independence in 1947 till 1997. After 1997 it continued its steady rise since 1992, touching 21.7% in 2013 (the last year for which figures are available on the graph). One presumes that rise continued till 2017 and so one can say that for two decades from 1997 India's top 1% national income share has been growing steadily beyond the 10 to 14% band it was in for the first 50 years after India's independence (1947 to 1997).

4) The Hindu article has Chancel saying that the top 0.1% of Indians (800,000 adults) capture as much income growth as the bottom 50% (400 million adults).

5) Chancel says that the bottom 50% in India have little access to basics like quality education, health or transport. I don't know what sources he has to back this 50% number of his.

6) Interestingly, Chancel says that inequality is multi-dimensional going beyond wealth and income inequality to areas like access to health, fair justice system, education, safety etc. But his orgn has data on wealth and income inequality (across the world) which it has shared via reports, and so he focuses on those aspects.

7) India has no inheritance tax.

8) Chancel argues for progressive taxation where richest contribute more, as "essential to finance public investments in education or health for everybody."

9) On high growth leading to high inequality, Chancel points out that China has had four times India's growth rate since 1980 (China - 800%, India - 200%) but top 1% in China captures 14% of total national income as against 22% in India (in 2013).
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On my Facebook post, https://www.facebook.com/ravi.s.iyer.7/posts/2037991039750796, associated with this post, in response to a comment that the Indian situ. seems to be somewhat similar to USA, I wrote:

Well, rural and semi-urban India, which would be having the majority of India's population, is still very much a feudal society with many people trapped in poverty and poor education. So the poor in India, from a material point of view, are in far worse situation than a rich country like the USA. However, there is an emotional and spiritual support system for the poor in India, which perhaps may not be so strong in the USA today in early 21st century. So being poor in India is somewhat manageable emotionally and spiritually. But it seems to me that being poor in the USA nowadays is really tough with sympathy and empathy being in somewhat limited supply :-(.
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[I thank Mr. Lucas Chancel and thehindu.com, and have presumed that they will not have any objections to me sharing the above information taken from their websites on this post which is freely viewable by all, and does not have any financial profit motive whatsoever.]