Income Inequality Patterns Across India

EVERY TALE of rapid economic growth carries within it a quiet and yet persistent question; who truly benefits and who gets left behind? India's development journey is no exception.

- Amit Kapoor & Mukul Anand

The World Bank's 2025 Spring brief highlighted that 171 million people have been lifted out of extreme poverty in India. Poverty is however absolute and pegged to a poverty line. Inequality on the other hand is quantifiable as a stock or a flow variable. If we look closer into official numbers in India, it is evident that the widening income gaps are quietly redrawing the boundaries of opportunities. This persistent income inequality cannot be brushed away as a mere statistical concern; it is a powerful force that influences social and political cohesion, progress and the very foundations of inclusive growth. Research across global economies, from Piketty's Capital Accumulation to Amartya Sen's Capability approach, unanimously show that societies with entrenched income divide risk slowing innovation, weakening democratic participation, and stalling social progress. In India's case, bridging the income gap is not just a moral necessity but an economic imperative: the promise of a truly inclusive and resilient Bharat depends on it. The former Chair of the PM's Economic Advisory Council noted that "Inequality is an emotive issue. It is also an empirical issue, since definition and measurement are contingent on the metric used and data available, including its timeline." Under his tenure there was a continuous examination into the issues of poverty and inequality with empirical evidence embedded in databases across India.

Keeping his legacy alive, the Institute for Competitiveness conducted a thorough study into Income Inequality and Labour Markets in India.