Analysing the rising gap in incomes
- According to a recent report by the State Bank of India (SBI), India has witnessed a significant fall in inequality over the last decade.
- It claims that the Gini coefficient fell from 0.472 in 2014-15 to 0.402 in 2022-23.
Analyzing Taxpayer Data
- The SBI report relies on taxpayer data, showcasing a 15% reduction in the Gini coefficient.
- However, a significant portion of income-earners fall outside the tax net.
- According to 2022-23 PLFS data, nearly 80% of income-earners earn less than the minimum taxable amount of ₹2.5 lakh per annum.
Income Inequality by Employment Nature
- Utilizing data from the PLFS for 2017-18 and 2022-23, the analysis differentiates income inequality among all income earners in India.
- This includes self-employed, regular wage, and casual wage workers.
- The Gini coefficient falls for regular and casual wage workers but rises for the self-employed, indicating a complex scenario.
Polarization in Incomes
- While the Gini coefficient decreases overall, there's a noticeable polarization in incomes.
- The top 10% experiences faster income growth than the bottom 30%, with self-employed workers contributing significantly to this trend.
- The income of the top 10% of self-employed individuals was 8.3 times that of the bottom 10% in 2022-23.
- The rise in women's labour force participation, particularly in low-paid, part-time self-employed work, may explain the increase in income polarization.