Executive Brief
India's income inequality has reached levels not seen since the colonial era — the top 1% holds 40% of national wealth while the bottom 50% holds just 13%. An examination of the structural drivers behind India's Gini coefficient trajectory.
- Poverty reduction in India has lifted 415 million people out of poverty since 2005.
- India's direct tax-to-GDP ratio is among the highest in emerging economies, indicating progressive taxation.
- Wealth inequality in India is now higher than during the British colonial period.
Key Takeaways
India's income inequality has reached levels not seen since the colonial era — the top 1% holds 40% of national wealth while the bottom 50% holds just 13%. An examination of the structural drivers behind India's Gini coefficient trajectory.
- Top 1% owns 40.1% of national wealth, among the highest globally
- Bottom 50% share declined from 20% to 13% over two decades
- Gini coefficient rose from 0.38 (2005) to 0.47 (2025) for income
- Corporate tax cuts and regressive GST structure worsened inequality
- Rural-urban income gap widened to 2.8x in 2025 from 2.1x in 2015
Evidence
Poverty reduction in India has lifted 415 million people out of poverty since 2005.[1]
Verified90%- UN and World Bank data confirm that India achieved the MDG target of halving poverty ahead of schedule. However, the poverty line threshold ($2.15/day 2017 PPP) masks the precarious economic status of those just above it.
India's direct tax-to-GDP ratio is among the highest in emerging economies, indicating progressive taxation.[1]
Strong84%- While direct tax-to-GDP ratio at 6.3% is respectable, the effective tax incidence on the wealthy is low due to exemptions, capital gains preference, and corporate tax cuts. Only 2% of Indians pay income tax.
Wealth inequality in India is now higher than during the British colonial period.[1]
Verified87%- World Inequality Lab data shows the top 1% wealth share at 40.1% (2024), surpassing the estimated 37% during the British Raj (1930s). India's current inequality level is among the highest in Asia.
Key Numbers
Timeline
Top 1% Wealth Share Over Time (%)
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Income Share by Decile (2025)
Frequently Asked Questions
Sources
Evidence & Confidence Summary
Confidence Score
Strong Evidence
2/3 claims verified