58% for the Rich, 15% for the Bottom Half - India’s Inequality Isn’t Closing, It’s Stretching

India in 2026 stands at an economic crossroads. GDP has expanded, digital inclusion has surged, and the country is projected to become the world’s third largest economy by 2027. Yet the latest World Inequality Report shows a stark divide. The richest 10 percent of Indians capture 58 percent of national income. The poorest 50 percent receive only 15 percent. This imbalance is not accidental. It reflects decades of unequal wage growth, unequal wealth accumulation, limited social protection and structural barriers that prevent upward mobility.

Multiple government sources including the Periodic Labour Force Survey, the Reserve Bank Household Survey, the Economic Survey, NSS consumption data and India’s Tax Statistics confirm that inequality has not narrowed. It has hardened.

Below is a consolidated table combining data from the World Inequality Report, the PLFS and RBI household survey trends.

This table highlights a structural truth. India is growing. But the distribution of gains is highly uneven.

PLFS data shows that between 2017 and 2023, real earnings for casual rural workers grew very slowly. In contrast, high skill urban workers in services and technology saw wage growth up to three times faster. RBI’s CE Survey findings show consumption growth concentrated in upper urban quintiles. This is why income is rising at the top but stagnating at the bottom.

Wealth grows faster than income because asset prices rise over time. Only a small share of households own significant land, financial assets or real estate. According to All India Debt and Investment Survey, the top 10 percent hold most of the country’s financial assets. Real estate inflation over the last decade increased the wealth of asset holders while leaving renters behind. This explains why the top 1 percent capture 40 percent of wealth.

NCAER’s India Human Development Survey notes that the Indian middle class is more vulnerable to income shocks than middle classes in East Asia. Household savings have declined to around 5.1 percent of GDP, the lowest in decades. Consumption patterns show increasing dependence on credit. The erosion of the middle 40 percent explains why India’s global position has slipped compared to 1980.

Female labour force participation remains at 15.7 percent according to PLFS 2023. Time Use Survey shows women spend almost 300 minutes per day on unpaid care work, among the highest globally. The result is structural wage inequality. Women earn only 61 percent of what men earn per working hour when unpaid work is excluded. Including unpaid labour reduces women’s income share to 32 percent. That restricts both household and national growth potential.

In 1980, India had a notable share of its population in the global middle. By 2025, India has shifted almost entirely to the bottom half. China on the other hand has moved from a largely low income distribution to a rising middle class. Sub Saharan Africa has remained stagnant. India’s slip is linked to slower wage growth, low capital ownership and delayed structural transformation in labour markets.

CBDT tax data shows that while direct tax collection has grown, the share paid by the ultra rich does not match their share of income or wealth. The Economic Survey notes that indirect taxes like GST form a large burden for lower income households. Effective tax rates fall for the richest, making the system less progressive. The report identifies this as a major reason states lack funds for healthcare, education and climate resilience.

The poorest half of the world population generates only 3 percent of private capital emissions. The top 10 percent produce 77 percent. In India, rising wealth concentration means that the richest 1 percent control 41 percent of private capital emissions. This means future climate policy must centre fairness. Otherwise the poor will bear the burden of an ecological problem they did not create.



Government programs like PMJAY, MGNREGS, PM Poshan, free school education and digital public services have reduced vulnerability. However, coverage gaps remain. Social sector spending remains near 7 percent of GDP while advanced economies invest almost double. Public investment in early childhood, universal healthcare and pensions can significantly narrow inequality over time. Global evidence shows progressive taxation combined with strong public goods is the most effective path toward shared prosperity.