Thank you for bringing these observations to a wider audience. Very few are aware of glaring inequalities that are part of India and empirical studies have shown that they are made worse by situations like pandemic. Here are 2 links those I would like to share
We all think we are middle class, which actually comes from our social values. Our idea of rich (1%) is someone living in a palace, like a "staircase" house, as they still show in the movies, living on ancestral wealth. And given the size of our country and population, it is not surprising that metro people have no idea of how the rest of the country lives. When I first came across the ICE360 survey in Mint, I was really excited at this rich new source of data. Nice to see it being put to good use again.
The glaring inequality between the multi millionnairs and poor is increasing drastically over the years especially during he last decade. A sweeping revolutionary measures can only bridge the gap between the rich and poor.
Amazing insights! Thanks for this.. Had a few queries..(A) In this para "The average monthly household income of the top 1% of all Indian households was ₹66k in 2016. Accounting for inflation in the last four years (and not accounting for any contraction due to COVID), that still works out to ₹85k. So, if your household earns more than ₹85k per month, then you are in the top 0.5% of India." how do you move 1% to 0.5%? Didnt follow that.. (B) Firewood statistics is a bit counter-intuitive when contrasted with the LPG connection growth in 2014-19 period. So, extrapolating 2016 data in 2020 now could be seriously misleading. (C) The para about 22% farmers, 25% construction workers is not correct. As per RBI reports, India has a workforce of approx 47-48 crores. Of this, 12 cr are land-owning farmers, and another 14 cr are agricultural labourers (including fishermen and animal husbandry). So that is 26/48 which is 55% of labour force in agri sector. Next two big sectors are 5 cr in construction labour and 4.5 cr in retail sector (mom and pop stores, owned or working there). Great insights once again! Am laughing at my responses to your survey now!
I knew we were the privileged when we had a discussion at the national level about reservation for economically disadvantaged and set the income at 8L or something. There is a website that tells you where you are w.r.t not India but the world. (Note: I was shocked at the time). Most of the world is poor (because of population, most of the poor is in India).
We should do something about it in whatever way we can. Best is to get better governments but all level who could redistribute income and resources an equitable manner so that whole world improves; but that doesn't seem likely in our current national (and to some extent global) situation.
My controversial opinion is that we should do nothing about income inequality. Every government for the past 60 years has followed shitty socialist principles. Basically it is like we have a cake and instead of increasing the mass production of that cake, we are arguing as to how best to divide the cake in hand. Instead of getting 10% of 1 cake, I would rather have 1% of 1000 cakes .
Sometime ago I found stats of income tax payer count in different ranges. I think it was on official income tax website. Now unable to find it. Can someone post it?
Talking about salaried people, even primary teachers earn over 40k per month. If both husband and wife are teachers, the family income is about 1 lakh per month.
Similar is the case of several govt servants.
If India has 50 lakh IT professionals, may be half of them earn over 50k per month.
This is just the salaried class. We aren't even talking about self employed people, where there is massive under reporting. So I have hard time accepting that only 15 lakh families earn over 85k per month.
I have a relative who is a doctor. His monthly income may be 10 lakh. He reports about 15 lakh per year. Similar is the case of a close business family. Doctors, lawyers, CAs, shopkeepers, rich farmers - massive under reporting.
What I am stating is just anecdotal, but can't be ignored I think. Other data like house prices, farm land prices, car sales - does not seem to agree with only 15 lakh families earning > 85k/month.
This study has not taken into account the black money and cash transactions which dominate rural India where 55%+ of the population lives. Moreover, it takes into account disposable income and not wealth, which shows a 'high' cash flow but doesn't represent actual wealth. Agriculture is mainly a cash based business, which is tax free and hence isn't recognized in the study. I would love to get feedback on my opinion.
Nonetheless, it was a great read and different perspective.
Thank you for sharing this extensive analysis. You might also want to look at the visual depicton of the income inequality and how it manifests in the way people live their lives in India - at https://onehundredhomes.in/
Wonderful article Navin. I think most of the people do not realize one major thing. If you have a roof over your head, food on the table and a family that is safe and healthy, you probably belong to the top 1% of Indians. Secondly, I dont know if the survey (2016) that you talked about can give any guidance on disposable monthly income and not in general income tat people have. I think the tendency among younger generation to be YOLO may have probably made a dent there in terms of ability to save.
Thank you for bringing these observations to a wider audience. Very few are aware of glaring inequalities that are part of India and empirical studies have shown that they are made worse by situations like pandemic. Here are 2 links those I would like to share
1. https://www.bloombergquint.com/business/income-inequality-in-india-rise-in-inequality-in-india-second-only-to-russia-shows-un-report
2. It's my pet peeve when people keep talking about how tax base in India is low in an accusing tone.
https://www.hindustantimes.com/analysis/the-myth-of-india-s-low-income-tax-base/story-UlN3FLG6NNzQilt09BSXnN.html
Powerful piece. My friends and I belong to the category that calls itself middle class. I can see now that that idea needs a drastic revision
We all think we are middle class, which actually comes from our social values. Our idea of rich (1%) is someone living in a palace, like a "staircase" house, as they still show in the movies, living on ancestral wealth. And given the size of our country and population, it is not surprising that metro people have no idea of how the rest of the country lives. When I first came across the ICE360 survey in Mint, I was really excited at this rich new source of data. Nice to see it being put to good use again.
I read somewhere only about 2% - 3% Indians have ever sat on a domestic flight. So yes this reinforces that.
The glaring inequality between the multi millionnairs and poor is increasing drastically over the years especially during he last decade. A sweeping revolutionary measures can only bridge the gap between the rich and poor.
Amazing insights! Thanks for this.. Had a few queries..(A) In this para "The average monthly household income of the top 1% of all Indian households was ₹66k in 2016. Accounting for inflation in the last four years (and not accounting for any contraction due to COVID), that still works out to ₹85k. So, if your household earns more than ₹85k per month, then you are in the top 0.5% of India." how do you move 1% to 0.5%? Didnt follow that.. (B) Firewood statistics is a bit counter-intuitive when contrasted with the LPG connection growth in 2014-19 period. So, extrapolating 2016 data in 2020 now could be seriously misleading. (C) The para about 22% farmers, 25% construction workers is not correct. As per RBI reports, India has a workforce of approx 47-48 crores. Of this, 12 cr are land-owning farmers, and another 14 cr are agricultural labourers (including fishermen and animal husbandry). So that is 26/48 which is 55% of labour force in agri sector. Next two big sectors are 5 cr in construction labour and 4.5 cr in retail sector (mom and pop stores, owned or working there). Great insights once again! Am laughing at my responses to your survey now!
I knew we were the privileged when we had a discussion at the national level about reservation for economically disadvantaged and set the income at 8L or something. There is a website that tells you where you are w.r.t not India but the world. (Note: I was shocked at the time). Most of the world is poor (because of population, most of the poor is in India).
We should do something about it in whatever way we can. Best is to get better governments but all level who could redistribute income and resources an equitable manner so that whole world improves; but that doesn't seem likely in our current national (and to some extent global) situation.
My controversial opinion is that we should do nothing about income inequality. Every government for the past 60 years has followed shitty socialist principles. Basically it is like we have a cake and instead of increasing the mass production of that cake, we are arguing as to how best to divide the cake in hand. Instead of getting 10% of 1 cake, I would rather have 1% of 1000 cakes .
Sometime ago I found stats of income tax payer count in different ranges. I think it was on official income tax website. Now unable to find it. Can someone post it?
Talking about salaried people, even primary teachers earn over 40k per month. If both husband and wife are teachers, the family income is about 1 lakh per month.
Similar is the case of several govt servants.
If India has 50 lakh IT professionals, may be half of them earn over 50k per month.
This is just the salaried class. We aren't even talking about self employed people, where there is massive under reporting. So I have hard time accepting that only 15 lakh families earn over 85k per month.
I have a relative who is a doctor. His monthly income may be 10 lakh. He reports about 15 lakh per year. Similar is the case of a close business family. Doctors, lawyers, CAs, shopkeepers, rich farmers - massive under reporting.
What I am stating is just anecdotal, but can't be ignored I think. Other data like house prices, farm land prices, car sales - does not seem to agree with only 15 lakh families earning > 85k/month.
Very insightful. Thank you for putting numbers in the right context!
This study has not taken into account the black money and cash transactions which dominate rural India where 55%+ of the population lives. Moreover, it takes into account disposable income and not wealth, which shows a 'high' cash flow but doesn't represent actual wealth. Agriculture is mainly a cash based business, which is tax free and hence isn't recognized in the study. I would love to get feedback on my opinion.
Nonetheless, it was a great read and different perspective.
It's mind boggling. It's an eye opener. Thanks for the article. It made me realize how lucky & privileged i am.
Thank you for sharing this extensive analysis. You might also want to look at the visual depicton of the income inequality and how it manifests in the way people live their lives in India - at https://onehundredhomes.in/
Wonderful article Navin. I think most of the people do not realize one major thing. If you have a roof over your head, food on the table and a family that is safe and healthy, you probably belong to the top 1% of Indians. Secondly, I dont know if the survey (2016) that you talked about can give any guidance on disposable monthly income and not in general income tat people have. I think the tendency among younger generation to be YOLO may have probably made a dent there in terms of ability to save.