Income Inequality Down Sharply, Rich-Poor Divide In Asset Ownership Narrowed: Sitharaman

Income inequality in India has "declined sharply", Finance Minister Nirmala Sitharaman said in the Lok Sabha on Monday, adding that the rich-poor divide in terms of asset ownership has also narrowed.

Sitharaman's remarks came in response to the Opposition seeking her response on the recently released World Inequality Report 2026, which pegged India as "one of the most unequal" countries where the top 1% holds 40% of the wealth.

The finance minister, however, pointed out that the asset ownership gaps between the rich and poor "have narrowed", especially in urban India.

The ownership of aspirational goods such as mobile phones, televisions, refrigerators and two-wheelers among the bottom 40% of households has grown at "unprecedented rates", she said.

Stressing on the rise in aspirational purchases, Sitharaman said that refrigerators have shifted from luxury to necessity, with "urban bottom ownership rising strongly".

Debt Concerns

During her address, Sitharaman said that the debt-to-gross state domestic product ratios have been worsening in several states. This needs to be addressed through "coordinated action".

Notably, recent RBI data showed household debt rising to 4.7% of the GDP in fiscal year 2024-25 from 3.9% in FY19, even as it moderated from a post-pandemic high of 6.2% in FY24.

'Make For India'

Sitharaman highlighted India's manufacturing prowess in the Lok Sabha, noting that the Make in India initiative of this government—to boost local production—has now become 'Make for India' as domestic demand continues to grow.

The recent spurt in consumption has propelled India's second quarter economic growth to 8.2%, per the data released last month, surpassing estimates.

Sitharaman, while referring to US President Donald Trump's "dead economy" remark against India, countered it by pointing out that global growth currently stands at 3.2%, while India grew by 8.2% in the last quarter.

This reiterates the country's position as the "fastest-growing major economy in the world", she said.