World Inequality Report 2022

Why in news?

• The World Inequality Report 2022 released by Paris-based World Inequality Lab, a global research initiative, pegs India to be among the most unequal countries in the world.

Key findings of the report:

• World:
  • Distribution of Wealth:
    • The poorest half of the global population “barely owns any wealth” possessing just 2% of the total, whereas the richest 10% of the global population own 76% of all wealth.
    • The Middle East and North Africa (MENA) are the most unequal regions in the world, whereas Europe has the lowest inequality levels.
  • Gender Inequalities:
    • Women’s share of total incomes from work (labour income) was about 30% in 1990 and is less than 35% now.
  • Rich Countries Poor Governments:
    • Over the past 40 years, countries have become significantly richer, but their governments have become significantly poorer.
    • The currently low wealth of governments has important implications for state capacities to tackle inequality in the future, as well as the key challenges of the 21st century such as climate change.
  • Impact of Covid Crisis on Inequality:
    • The Covid-19 pandemic and the economic crisis that followed hit all world regions, but it hit them with varying intensity.
    • Europe, Latin America, and South and Southeast Asia recorded the largest drops in national income in 2020 (between -6% and -7.6%) while East Asia (where the pandemic began) succeeded in stabilizing its 2020 income at the level of 2019.
• India Specific Findings:
  • Distribution of Wealth:
    • India stands out as a poor and very unequal country.
    • The top 1% of the population hold more than one-fifth of the total national income in 2021 and the bottom half just 13%.
    • The economic reforms and liberalization adopted by India have mostly benefited the top 1%.
  • Average Household Wealth:
    • It stands at Rs. 983,010. It has been observed that the deregulation and liberalisation policies implemented since the mid-1980s have led to “one of the most extreme increases in income and wealth inequality observed in the world”.
  • Gender Inequalities:
    • The female labour income share is equal to 18% which is significantly lower than the average in Asia [21%, excluding China] and this value is one of the lowest in the world.
  • Carbon inequality
    • India is a low carbon emitter. The average per capita consumption of greenhouse gas is equal to just over 2 CO2e.
      • Carbon dioxide equivalent or CO2e is a term for describing different greenhouse gases in a common unit.
    • These levels are typically comparable with carbon footprints in sub-Saharan African countries.
    • A person in the bottom 50% of the population in India is responsible for, on average, five times fewer emissions than the average person in the bottom 50% in the European Union and 10 times fewer than the average person in the bottom 50% in the US.
  • Rise of Private Wealth:
    • There has been a rise of private wealth in emerging countries such as China and India.
    • China has had the largest increase in private wealth in recent decades. The private wealth increase seen in India over this time is also remarkable (up from 290% in 1980 to 560% in 2020).

PRACTICE QUESTION:

World Inequality Report 2022 is released by

(a) World Economic Forum

(b) World Inequality Lab

(c) United Nations Development Programme

(d) Inclusive Development International

Answer