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Questionable, flawed methodology: Sitharaman dismisses World Inequality Report

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New Delhi, Mar 29: Union Finance Minister Nirmala Sitharaman on Tuesday called the World Inequality Report 'flawed' and called its methodology 'questionable'. According to the World Inequality Report 2022, India is one of the most unequal countries in the world in terms of both income and wealth inequality.

Nirmala Sitharaman

"World Inequality Report terming India as 'poor and very unequal country' is flawed, based on questionable methodology," Sitharaman said during a Rajya Sabha session.

The World Inequality Report 2022 stated that India stands out as a poor and very unequal country, with the top 1% of the population holding more than one-fifth of the total national income in 2021 and the bottom half just 13%, according to a report.

The report, titled 'World Inequality Report 2022', has been authored by Lucas Chancel, co-director of the World Inequality Lab, and coordinated by several experts, including French economist Thomas Piketty.

It further said India is now among the most unequal countries in the world. The report pointed out that the average national income of the Indian adult population is Rs 2,04,200. While the bottom 50% earns Rs 53,610, the top 10% earns more than 20 times (Rs 1,166,520).

"While the top 10% and top 1% hold respectively 57% and 22% of total national income, the bottom 50% share has gone down to 13%. "India stands out as a poor and very unequal country, with an affluent elite," it said.

According to the report, average household wealth in India stands at Rs 983,010. It 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".

It also said gender inequalities in India are very high."The female labour income share is equal to 18%. This is significantly lower than the average in Asia [21%, excluding China]," the report said, adding that this value is one of the lowest in the world, slightly higher than the average share in Middle East (15%).

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