Thursday, December 29, 2022

India income distribution graphic of the day

Fascinating graphic on income distributions and income gaps in 16 countries.

India has the highest income gap between the 90th and 99th percentile, the most closely bunched distribution between 20th and 80th percentile, the poorest first quintile, and the lowest median income. It points to an important insight about the nature of India's income distribution - the extremes of wealth and poverty, much higher than elsewhere, and a very narrow base of consumers.

This squares us with data from elsewhere. The Pew Research Centre, using the updated ProvcalNet household consumption based income database also used by the World Bank, found that at the end of 2020 while only 5% of Indians live on less than $2 per capita (at PPP) per day, 87% live between $2-10, 7% between $10-$20, 2% live between $20-$50, and just 0.2% (or 3 million people) earn more than $50 per day. 

All this points to the very narrow base of India's consumption class and the large base of those requiring welfare support. As I have blogged on several occasions, and also written in Can India Grow, the growth of the consumption class requires making the nature of economic growth more broad-based. 

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