The evolution of income and wealth inequalities in India in 1951–2019

Abstract

An increasing amount of research and available data shows a clear increase in the level of inequality in worldwide terms over the past 30–40 years. In this context, India is a unique case due to the enormous ethnic and linguistic diversity and specific social institutions that have arisen over the centuries. The study is divided into three parts. The first one presents the problem of the inequalities in the contemporary world and their relationship with the processes of economic growth. The second part is devoted to an analysis of the inequalities in India in the years 1951–1989, and the third part is an analysis of this problem since 1990. The article ends with a conclusion, which briefly presents the analyses that were carried out. The study mainly uses historical analyses based on domestic and foreign literature, as well as an analysis of the existing data. According to the analyses studied, the shares of individual percentiles in income and wealth remained relatively constant throughout the 1950s, 1960s and 1970s, with shares in the upper strata decreasing slightly over that time. In fact, there was an actual petrification of traditional structures and inequalities. These circumstances changed in the mid-1980s and accelerated significantly in the early 1990s along with liberal reforms based on the Washington consensus. As a result, the level of inequality has increased significantly over the past 30 years. This means that despite more than 70 years of economic reform, it was ultimately impossible to build a strong, egalitarian society. In the long run, this may lead not so much to the consolidation of the democratic system as to the emergence of a plutocracy in place of democracy, and New Delhi’s superpower ambitions will remain within the sphere of theories and plans.