Economy

Richest 1% Cornered 73% of Wealth Generated in India in 2017: Oxfam Survey

The annual Oxfam survey revealed that 67 crore Indians comprising the population’s poorest half saw their wealth rise by just 1% in the last year.

A homeless boy holds biscuits that he received as alms as he takes shelter from rain in front of a fast food shop in Mumbai November 11, 2009. Credit: Reuters/Arko Datta

A homeless boy holds biscuits that he received as alms as he takes shelter from rain in front of a fast food shop in Mumbai November 11, 2009. Credit: Reuters/Arko Datta

New Delhi: India’s richest 1% garnered as much as 73% of the total wealth generated in the country in 2017, according to a new survey by international rights group Oxfam. The report’s findings are in line with those of similar studies including the one published by renowned economists Lucas Chancel and Thomas Piketty last July, and give credence to the theory that the rich have disproportionately benefited from liberalisation while others have been left struggling.

Titled ‘Indian income inequality, 1922-2014: from British Raj to Billionaire Raj?’ the research paper by the two economists showed that income inequality in India was at its highest in 2014 since 1922, the year the country passed the Income Tax Act. The paper’s findings later went into a full-fledged report, the World Inequality Report, published by the World Inequality Lab. According to it, 10% of Indians garnered 56% of the national income in 2014.

The top 1% of earners captured less than 21% of total income in the late 1930s, before dropping to 6% in the early 1980s and rising to 22% in 2014, the report said.

The Oxfam report, which was released hours before the annual Davos World Economic Forum (WEF) meet began, further states that 67 crore Indians, comprising the population’s poorest half, saw their wealth rise by just 1% in 2017. The situation appears even more grim globally, where 82% of the wealth generated last year worldwide went to the 1%, while 3.7 billion people that account for the poorest half of population saw no increase in their wealth, the survey said.

The annual Oxfam survey is keenly watched and is discussed in detail at the World Economic Forum Annual Meeting where rising income and gender inequality is among the key talking points for the world leaders.

Last year’s survey had showed that India’s richest 1% held a huge 58% of the country’s total wealth – higher than the global figure of about 50%.

This year’s survey also showed that the wealth of India’s richest 1% increased by over Rs 20.9 lakh crore during 2017 — an amount equivalent to total budget of the central government in 2017-18, Oxfam India said.

The report titled ‘Reward Work, Not Wealth’, Oxfam said, reveals how the global economy enables wealthy elite to accumulate vast wealth even as hundreds of millions of people struggle to survive on poverty pay.

“2017 saw an unprecedented increase in the number of billionaires, at a rate of one every two days. Billionaire wealth has risen by an average of 13% a year since 2010 – six times faster than the wages of ordinary workers, which have risen by a yearly average of just 2%,” it said.

In India, it will take 941 years for a minimum wage worker in rural India to earn what the top paid executive at a leading Indian garment firm earns in a year, the study found.

In the US, it takes slightly over one working day for a CEO to earn what an ordinary worker makes in a year, it added.

Citing results of the global survey of 70,000 people surveyed in 10 countries, Oxfam said it demonstrates a groundswell of support for action on inequality and nearly two-thirds of all respondents think the gap between the rich and the poor needs to be urgently addressed.

With Prime Minister Narendra Modi attending the WEF meeting in Davos, Oxfam India urged the Indian government to ensure that the country’s economy works for everyone and not just the fortunate few.

It asked the government to promote inclusive growth by encouraging labour-intensive sectors that will create more jobs; investing in agriculture; and effectively implementing the social protection schemes that exist.

Oxfam also sought sealing of the “leaking wealth bucket” by taking stringent measures against tax evasion and avoidance, imposing higher tax on super-rich and removing corporate tax breaks.

The survey respondents in countries like the US, UK and India also favoured 60% pay cut for CEOs.

The key factors driving up rewards for shareholders and corporate bosses at the expense of workers’ pay and conditions, Oxfam said, include erosion of workers’ rights; excessive influence of big business over government policy- making; and the relentless corporate drive to minimise costs in order to maximise returns to shareholders.

About India, it said the country added 17 new billionaires last year, taking the total number to 101. The Indian billionaires’ wealth increased to over Rs 20.7 lakh crore – increasing during the last year by Rs 4.89 lakh crore, an amount sufficient to finance 85% of the all states’ budget on health and education.

It also said India’s top 10% of population holds 73% of the wealth – i.e. the stock of wealth, and not just wealth generated in a year – and 37% of India’s billionaires have inherited family wealth. They control 51% of the total wealth of billionaires in the country.

Oxfam India CEO Nisha Agrawal said it is alarming that the benefits of economic growth in India continue to concentrate in fewer hands.

“The billionaire boom is not a sign of a thriving economy but a symptom of a failing economic system. Those working hard, growing food for the country, building infrastructure, working in factories are struggling to fund their child’s education, buy medicines for family members and manage two meals a day. The growing divide undermines democracy and promotes corruption and cronyism,” she said.

The survey also showed that women workers often find themselves at the bottom of the heap and nine out of ten billionaires are men.

In India, there are only four women billionaires and three of them inherited family wealth.

“It would take around 17.5 days for the best paid executive at a top Indian garment company to earn what a minimum wage worker in rural India will earn in their lifetime (presuming 50 years at work),” Oxfam said.

Note: While Oxfam’s survey is based on data put out by Credit Suisse in 2017, they look at two different things. The Credit Suisse’s wealth book indicates that the top 10% of India’s richest owned 73% of the country’s wealth. Oxfam on the other hand, notes that the top 1% cornered 73% of the newly created wealth between/in 2017 and does not say that the 1% 73% of national wealth.

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  • Anjan Basu

    Educating the PM in big data ( indeed in all data, big or small) is a good idea as such. But it may be of little help: it is the PM’s ( and his party’s) intent and world-view that is flawed. He knows what he is doing, and he is fine with it.

  • Anjan Basu

    Pardon me, but who is ‘blaming’ the Modi government? I for one certainly am not. I was only pointing out what to expect, and what not to, from the BJP-RSS family. I know very well that it is pointless to ‘blame’ coal for being black, for it is in its nature to be so.

    • indie

      The person who put this out forgot that Rahul Gandhi and his Ma are part of this 1% ..will someone please ask Rahulji to give his wealth to the 73% Indians…please

      • Anjan Basu

        Since neither Rahul nor Sonia Gandhi is exactly my pal, I cannot take that job upon myself, surely. That is not the point, though. The Oxfam report put its finger on a serious, and alarming, aspect of India’s much-vaunted ‘growth story’, and that is what is important here. Petty sabre-rattling with imaginary enemies here is, to my mind, in poor taste.

  • alok asthana

    If Modi and the FM have their way, the 73 % wealth of India would no longer be with the 1 %. It’ll be with just one man. What a disgusting government we have.

    • Mandy S

      Do you know if and by how much (if at all) better was it during UPA regime? From what I can see the economic policies of UPA and NDA are not that much different – they both are pro big-business, give or take a bit. I’d like to be proven wrong.

      • alok asthana

        Even if it be true that the inequality existed in Cong times too, is it a good enough reason to let BJP off the hook? In that case, India will always remain at Cong standards. Do we have no right to expect anything from the man whose is the messiah of new India with such a majority in lok sabha?
        Are we doomed forever?

      • alok asthana

        Just heard in The Wire interview of Sitaram Yechury ( by MK Venu and S Vardrajan – on judeges impeachment case and more) that when Manmohan S demitted PM office, 1% Indians held only 49% of national wealth, which figure has now swelled to 74%. If true, it is a serious charge on PM Modi.

  • Ek Aur India

    Its quite sad when we as citizens are taking sides based on our political affiliation while India is suffering. You are entitled to your opinions but not your facts. Studies after studies have shown that what we see in India is what happened. Its Modi’s policy view that businesses should grow over everything else and its quite evident since he took office. There is nothing wrong in selling a brand but there is such a thing called cannibalization, when one product eats rest of your portfolio. Do we really need/want bullet trains when we have farmers committing suicide because banks are harassing them for loans they took out but can’t repay due to failed crops. Sure, corruption was there before and which is why people of India elected this Govt. but has the Govt. succeeded in any promises made? 2G verdict is out, 15 Lakh is still not there in my bank account, Vadra’s issue will come up again during next election, congress ke 70 years continues to be an issue again but Govt. will not talk about loss we made on new Coal allocation (https://thewire.in/216163/indias-reverse-auction-coal-done-little-consumers-lot-private-power-players/) or what benefits Indian economy really got out of demonetization or why cow politics continues to dominate in 2018 or why crime against women is so high in BJP ruled states?

    Yes, this is a failure of much pronounced policy of development. But isn’t that what Mr. Modi has been touting for last three years? Sabka saath, sabka vikash? At least data doesn’t support his claim so should we question him why did he fail or are we going to buy congress ke 60 saal?

  • BG Shirsat

    Stock market wealth has been increased for all who has invested in the market after 2014. It is notional and can evaporated if the economy is not doing well. The market is on the rise because good economic policy of this government.

  • Nandlal Singh

    What is the name of this child? Where does he belong? What is his parents? How he reached that place? These four answers will solve the problem.

  • DJT

    This is they it is said “Lies, Damned Lies and Statistics”.
    if Credit Suisse report is to be believed, India’s income inequality has actually REDUCED in the last year.
    2016: Top 1% garnered 58% of total wealth; top 10% garnered 80%
    2017: Top 1% garnered 45% of total wealth; top 10% garnered 73%

    So inequality is reduced compared to last year. Obviously that fact is very inconvenient to ‘some’.

  • Mandy S

    It would be informative to get a year-on-year data on this distribution index including prior to 2014 to see whether and how this has worsened over the years. This would help get a fair comparison of how the policies of UPA Vs NDA have impacted the distribution of wealth. Does any one know where I can get that data?

  • Inequality is welcome. Rich getting 100x richer, poor getting 1x richer is quite a welcome result. As long as rich are generating their wealth through free-market, what is the harm in that? I will recommend paulgraham.com/gap.html to readers.

  • Saswat Mohapatra

    Can someone kindly give me a link to download the original report from Oxfam from where these data points are captured. It would be interesting read. I am particularly interested on how top 10% of wealthy individuals have been arrived at. In a country where 1% pay taxes and there are no robust mechanisms to track an individuals wealth, it will be interesting to see how these data points on wealth distribution are being captured and analysed.

  • The Wire

    Oxfam has two figures. Wealth generated in 2017, i.e. new wealth. And the stock of wealth in the country as of 2017. The top 1% of the population has 73% of the wealth generated in 2017. And the top 10% owns 73% of the total wealth stock in India.

  • hypocrisy

    Seventy years of socialism, reservations, laws, laws and more laws have rendered ninety percent of the population uneducated for any meaningful living. And we wish to blame the other ten percent that educated their children to be productive ?

    Don’t blame those who succeeded. Rather ask the question, how after seven decades ninety percent of the population, after all this social engineering, are unqualified for any job in the real world.

  • alok asthana

    That BJP (or any other political party with clear majority in lok sabha) can fix this is NOT false comfort. Of course, it is an issue of wrong economic policies and why should a party with such thumping majority not be able to sort this out?

  • Anjan Basu

    Thank you!