SBI Report: Income inequality among those earning up to half a million annually decreased by 74%

New Delhi| Income inequality among people with annual income up to Rs 5 lakh has decreased by 74.2 per cent between 2013-14 and 2022-23, that is, in 10 years. This shows that the government’s efforts are reaching the bottom of the economic pyramid. Due to this the income of low income group people is increasing.

A comparative study of income inequality during assessment years 2014-15 and 2023-24 shows a rightward tilt in the income distribution curve, the SBI report released on Friday said. This means that people in lower income groups are increasing earnings in proportion to their share in the population. SBI’s Economic Department has analyzed income inequality trends to clarify the much-publicized myth of worsening inequality in the country.

The share of income inequality of people with earnings up to 3.5 lakh was 31.8 per cent in FY 2013-14, declining to 12.8 per cent in 2020-21. The income share of this group has grown 19 per cent faster than that of their population.

Low income group (income less than 5.5 lakh) has registered positive growth rate during the entire period of study period in the last decade| The report said that states like Maharashtra, Delhi, Gujarat and Karnataka, which are leading in income tax base, are coming close to the highest level in filing income tax returns. Their share in the total tax base is declining. Uttar Pradesh’s share in filing returns has increased rapidly. After this are Bihar, Andhra Pradesh, Punjab and Rajasthan. The ratio of direct taxes to GDP rose to 6.64 per cent in assessment year 2023-24, the highest since 2000-01.