In January 2021, Oxfam India’s report “The Inequality Virus” showed that the wealth of India’s 100 billionaires had increased by 12,97,822 crore since March 2020, while millions of people lost their jobs due to the crisis. economic. In January 2020, the report also found that 1% held more than four times the wealth held by 953 million people who make up the poorest 70% of the country’s population.
However, India has consistently failed to maintain and update official data on income and wealth inequalities. NITI Aayog’s third India SDGs 2020-21 index and scorecard, launched in June 2021, again omitted true measures of income inequality. In February 2020, Minister of State for Finance Anurag Thakur informed Parliament that income / wealth data is not kept by the government.
India remains one of the countries that has not been able to report on the SDG target of the growth rate of the poorest 40% of households since the goals were ratified.
There are three sets of measures of inequality: consumption, income and wealth. Inequalities in consumption are generally monitored through household surveys; these tend not to capture the consumption of the richest and poorest households, which are often not included in the survey samples. Although the measure captures income inequality, it does not give an idea of the assets available with families.
Wealth inequality examines household assets and debts. The most frequently used measure of income inequality is the Gini coefficient which reflects the extent of inequality, varying from zero (in a context of perfect equality) to one (when a household represents all the consumption of the country. ).
India’s Gini consumption is based on the ONSS Consumer Spending Survey (68th cycle) published in 2011-12. Gini income inequality is based on the Integrated Household Survey, 2011-12. Wealth Gini data is derived from the All-India Debt and Investment Survey (NSS 70th round) dating back to 2012.
As we come to the end of a decade, since either of the datasets were updated, perhaps it is time to signal the need to rethink the way Indian statistics on inequalities are collected and organized.
How have other countries behaved?
India’s Gini Index in the World Bank dataset has not been updated since 2011. At the time of writing, 140 countries have more up-to-date information on income inequality than the ‘India. This includes 20 countries that updated data on income inequality each year and 31 countries that missed a data point. Seventy-four74 countries appear to collect evidence on average at least every two years.
The list of countries with more up-to-date data includes many of our neighbors, including Bangladesh (latest data available for 2016), Pakistan (2018), Myanmar (2017), Sri Lanka (2016), Bhutan (2017) and the Maldives (2016). Only Nepal has less updated data (2010). In contrast, Sri Lanka, Myanmar and Bhutan have two data points and Pakistan has collected evidence on this three times.
India also lags behind in its data collection on this issue among all other BRICS countries including Brazil (2019), China (2016), Russia (2018) and South Africa (2014). . Brazil maintains this data annually, and Russia has seven data points in the intervening eight years.
NITI Aayog’s latest SDG report did not include data on income inequality while addressing India’s performance on SDG 10. It used seven indicators. In 2019, he used nine indicators. In 2018, it only used four metrics to calculate performance, again excluding a measure of income inequality. While it is not clear whether it is a matter of selecting evidence to arrive at a desired scope, what is clear is that it makes data sets non-comparable over the years. These inconsistencies need to be corrected to get a complete and accurate picture of income inequality in India.
What should be done?
India must recognize the importance of addressing growing inequalities and put in place mechanisms to measure them. More data also needs to be disaggregated by income given the clear impact this class has on specific development outcomes. It’s not just about collecting wealth data twice in a decade, but also about tracking more consistently the differential impact of specific policies on India’s rich and poor. It would therefore be important to know the relative access that India’s rich and poor have had to life-saving vaccines. While much of the data collection this year, including the census, has inevitably had to be postponed, we need to start more regular data collection on income and wealth inequalities. At the very least, at least two surveys should be conducted over a 10-year period using a reasonably comparable methodology capturing inequalities in income and wealth.
In addition, all data thus collected should be made available free of charge in the public domain and in a timely manner to enable citizens, practitioners and academics to take an interest in the underlying reality.
Unless India collects timely evidence of income inequality, it will not be able to address it. Indian policymakers need to understand to what extent their actions actually benefit rich or poor Indians who need help the most. Indians deserve to know the real extent of the gap between the rich and the poor so that they can take action to tackle inequalities.
While we cherish India’s constitutional commitment to equality, we must also measure whether we are moving closer to achieving it.
Writer leads work on education, health and inequalities at Oxfam India