Wealth inequality
Topic: Poverty and Inequality: Measurement and Policy · NCERT: Beyond NCERT
Meaning
Wealth inequality is the unequal distribution of assets, such as land, housing and financial holdings. It is far more concentrated than income inequality for two reasons. First, wealth is inherited. Second, returns on assets compound over time, so the rich get richer. Piketty argues that when the return on capital exceeds the growth rate (r > g), inherited wealth grows faster than the economy, so wealth concentrates further. In India, data on assets come from the NSS All-India Debt and Investment Survey (AIDIS).
Example
The World Inequality Lab (2024) estimated that in 2022-23 India's top 1% held about 40.1% of wealth, compared with about 22.6% of income. The gap between the two figures shows how much more concentrated wealth is than income.
Don't confuse with
- Income inequality: it measures the spread of a flow earned each year, such as wages, profits or rent. Wealth inequality measures the spread of a stock of assets owned at a point in time.