A recent report from the State Bank of India (SBI) reveals a significant 74.2% reduction in income disparity for individuals earning up to ₹5 lakh annually between the fiscal years 2013-14 and 2022-23. This analysis challenges the common perception of increasing inequality in India.
The SBI Economic Department’s report examined the income disparity trends between assessment years (AY) 2014-15 (FY14) and AY 2023-24 (FY23). It found that the income distribution curve has shifted to the right, indicating that individuals in lower income brackets are increasing their earnings, thereby aligning more closely with their demographic share.
The report states, “Our analysis indicates a cumulative 74.2% decline in income disparity for those earning up to ₹5 lakh. This reflects the government’s ongoing efforts to uplift the lower income group, resulting in increased earnings for this segment.”
Specifically, for those earning up to ₹3.5 lakh, the share of income disparity dropped from 31.8% in FY14 to 12.8% in FY21, demonstrating a 19% increase in income for this group relative to their population share.
Overall, the lower income group (those earning less than ₹5.5 lakh) has shown a positive growth rate over the past decade, with the exception of AY20, which was affected by the COVID-19 pandemic.
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