SYLLABUS

GS-3: Inclusive Growth and issues arising from it.

Context: Recently, the World Inequality Lab released its third World Inequality Report 2026, highlighting alarming levels of growing disparities in wealth and income globally.

Key Findings of the Report

• Global Findings

o Uneven wealth distribution: The Top 10 per cent owns three-quarters of all wealth, while the bottom 50 per cent holds just 2 per cent. 

o Gender Pay gap persists: Excluding unpaid work, women earn only 61 per cent of what men earn per working hour, and when unpaid labor is included, this figure falls to just 32 per cent.

o Carbon emissions Inequality: The poorest half of the global population accounts for only 3 per cent of carbon emissions associated with private capital ownership, while the top 10 per cent account for 77 per cent of emissions. 

o Unequal Global financial system: Each year, around 1% of global GDP (approximately three times as much as development aid) flows from poorer to richer nations through net foreign income transfers associated with persistent excess yields and lower interest payments on rich-country liabilities.

o Inequality between regions: Europe and much of North America & Oceania are among the least unequal. At the other end of the spectrum, Latin America, southern Africa, and the Middle East & North Africa combine low incomes for the bottom 50% with extreme concentration at the top.

• India-specific findings

o Income inequality: Top 10 per cent of earners capturing 58 per cent of national income, while bottom 50 per cent receive only 15 per cent.

o Wealth inequality: The richest 10 per cent hold around 65 per cent of total wealth and the top 1 per cent hold about 40 per cent.

o Labor participation disparity: Female labor participation remains very low at 15.7%, showing no improvement over the past decade.

Key Recommendations of the Report

• Public investments in powerful equalisers: Public investment in free, high-quality schools, universal healthcare, childcare, and nutrition programs can reduce early-life disparities and foster lifelong learning opportunities.

• Redistributive programs: Cash transfers, pensions, unemployment benefits, and targeted support for vulnerable households can directly shift resources from the top to the bottom of the distribution. 

• Advancing gender equality: Dismantle the structural barriers that shape how work is valued and distributed. Policies that recognize and redistribute unpaid care work, through affordable childcare, parental leave that includes fathers, and pension credits for caregivers, are essential to leveling the playing field. 

• Fairer tax systems: Minimum wealth taxes on multi-millionaires raise the resources that could be mobilized to finance education, health, and climate adaptation.

• Reforming the Global financial system: Reforms such as adopting a global currency, centralized credit and debit systems, and corrective taxes on excessive surpluses would expand fiscal space for social investment and reduce the unequal exchange that has long defined global finance.