Context: A G20-commissioned report, led by Nobel laureate Joseph Stiglitz, revealed that India’s richest 1% grew their wealth by 62% between 2000 and 2023, warning that global inequality has reached “emergency levels” that threaten democracy, and climate progress.
About G20 Report on Global Inequality:
What it is?
- The report, prepared by the G20 Extraordinary Committee of Independent Experts on Global Inequality under the South African G20 Presidency, assesses trends in income and wealth disparities across nations.
Key Trends:
- Wealth concentration: The top 1% captured 41% of all new wealth created globally between 2000–2024, while the bottom 50% received only 1%.
- India-specific data: In India, the top 1% increased their wealth share by 62%, indicating deepening inequality despite economic growth.
- Global slowdown in poverty reduction: Since 2020, poverty reduction has stalled; 2.3 billion people face food insecurity, and 1.3 billion are impoverished by out-of-pocket health spending.
- Intercountry trends: While overall inequality between countries narrowed due to China and India’s growth, within-country inequality surged worldwide.
- Democracy risk: Nations with high inequality are seven times more likely to experience democratic decline.
Implications:
- Social: Rising inequality erodes trust in institutions, fosters populism, and threatens social cohesion.
- Economic: Concentration of wealth restricts aggregate demand, limits human capital formation, and slows inclusive growth.
- Political: Exacerbates elite capture of policy, leading to unequal access to opportunity and governance bias.
Relevance in UPSC Syllabus:
- GS Paper II – Governance: Highlights inequality and inclusive policy design, relevant to topics on welfare schemes, and democratic accountability.
- GS Paper III – Economy: Demonstrates structural issues in wealth distribution, inclusive growth, and economic justice.
- Essay/Interview: Useful for themes like “Equality as a foundation of justice”, “Globalisation and inequality”, and “Democracy and economic fairness.”
