India sees big reduction in poverty, but inequality on the rise: UNDP

India has emerged among the top countries with high income and wealth inequality, though there is growing evidence of a "strong rise in wealth inequality", mainly in the post-2000 period, the United Nations Development Programme (UNDP) said in a new report.

The UNDP's 2024 Asia-Pacific Human Development titled 'Making our Future: New Directions for Human Development in Asia and the Pacific', says over recent decades, India has improved living standards, and significantly reduced poverty, but it is seeing an increase in inequality.

The income generation has steadily increased since 2000, while at the same time, there has been a major fall in poverty rates. Between 2000 and 2022, per capita income soared from $442 to $2,389. And between 2004 and 2019, poverty rates, based on the international poverty measure of $2.15 per day, plummeted from 40 to 10%. Moreover, between 2015-16 and 2019-21, the share of the population living in "multidimensional poverty" fell from 25 to 15%, the UN report says.

Despite these successes, most of the population that's poor remains concentrated in states. "Poverty remains "persistently" concentrated in states that are home to 45% of the country’s population but contain 62% of its poor," shows the UN data. 

Also, many people are very vulnerable to economic conditions, and they just hover above the poverty line. The groups that are at the greater risk of falling back into poverty include "women, informal workers, and inter-state migrants". Women are only 23% of the labour force in India, says the UN data.

The situation of rapid growth and persistent disparity has caused the income distribution to become more skewed. "The top 10% of the population get 57% of national income and the top 1% get 22% – one of the most unequal income distributions. There are similar gaps in wealth: the top 10% of the population controls 65% of the nation’s total wealth."

As per the latest estimates of 2021, in Asia and the Pacific, 495 million people lived in "multidimensional poverty" -- far more than those who were income-poor, with the region accounting for almost half the global total. Of these, the majority were in South Asia – 389 million.

The UNDP report argues the Asia-Pacific region still has a long way to go to meet its human development goals. "Many countries have high levels of human insecurity which, taken together with unmet aspirations, create a volatile mix, intensifying the need for change."

The Asia-Pacific region is "not on track" for achieving any of the sustainable development goals (SDGs) and human insecurity is high in many countries, the report says, adding that it's facing clusters of threats like climate change and pandemics, shifts in globalisation’s dynamics, among others. The region’s future hinges on harmonising economic betterment, with holistic development, says the report.