A report by an international organisation on global inequality that termed India as a “poor and very unequal” country has been dismissed as based on “flawed and questionable methodology” by Finance Minister Nirmala Sitharaman.
India stood out as a “poor and very unequal” country, with the top 1 per cent of the population holding more than one-fifth of the total national income in 2021 and the bottom half just 13 per cent, the report by the World Inequality Lab had said in December last year.
It was authored by Lucas Chancel, co-director of the World Inequality Lab, and coordinated by several experts, including French economist Thomas Piketty.
The report had claimed that the average national income of the Indian adult population is Rs 2,04,200; the bottom 50 per cent earns Rs 53,610, and the top 10 per cent earns more than 20 times or Rs 11,66,520.
“The World Inequality Report terming India as ‘poor and very unequal country’ is flawed, and it is based on questionable methodology,” Ms Sitharaman said in parliament today.
The world map of inequalities had also claimed that national average income levels are poor predictors of inequality. For example, among high-income countries, some are very unequal (such as the US), while other are relatively equal (Sweden).
Lucas Chancel, the lead author of the report, had said the COVID-19 pandemic exacerbated inequalities between the very wealthy and the rest of the population.
Ms Sitharaman blamed the former United Progressive Alliance, or UPA, government for not recovering money from those who turned their loan accounts into non-performing assets, or NPAs.
Responding to questions by DMK’s TR Baalu about the government’s action against loan defaulters and NPAs, the Finance Minister said “writing off” loans does not mean “complete waive off” and banks are following every loan to recover the outstanding amount.
“Over Rs 10,000 crore, I am saying ‘over’ as I don’t want to disclose the actual figure, have been recovered by PSU (public sector unit) banks from loan defaulters after taking over their assets. For the first time in the country, under the Modi government, the banks got back money from many NPAs. While during the UPA government, no money was recovered from the NPAs,” she said.