Economic inequality has long stood at the centre of debates on how societies are organised and how prosperity is shared. While disparities have always existed, by 2025, inequality has reached levels that demand urgent moral, political, and economic attention. The gains of globalisation and economic growth have accrued overwhelmingly to a narrow elite, while vast sections of humanity continue to struggle for secure livelihoods, social protection, and basic dignity. These divides are neither accidental nor inevitable; they are the direct outcomes of political choices, institutional arrangements, and entrenched asymmetries of power.
The World Inequality Report 2026 (WIR 2026), produced by the World Inequality Lab under the leadership of Lucas Chancel, Ri cardo Gómez-Carrera, Rowaida Moshrif, and Thomas Piketty, provides one of the most comprehensive and rigorously documented analyses of inequality in the twenty-first century. The third in the series, after the 2018 and 2022 editions, the report draws on contributions from over 200 scholars worldwide and is prefaced by Joseph Stiglitz and Jayati Ghosh. Its conclusion is explicit: global inequality remains at historically extreme levels and is deeply multidimensional, spanning income, wealth, gender, climate vulnerability, and access to basic human capabilities.
A central insight of the report is that inequality does not emerge from the natural functioning of markets alone. Rather, it reflects deliberate policy choices, entrenched institutional structures, and unequal distributions of economic and political power. Markets are embedded within social and political systems, and when these systems systematically favour capital over labour, wealth over work, and elites over citizens, inequality becomes persistent and self-reinforcing. Crucially, because inequality is shaped by policy, it can also be reshaped by policy.
According to the World Inequality Report 2026, using 2025 purchasing power parity estimates, the world’s richest 0.001%—around 60,000 individuals—own three times more wealth than the poorest 50% of humanity. Globally, the top 1% capture 23% of total income and own 38% of total wealth. The top 10% command 53% of income and a staggering 75% of wealth. In contrast, the middle 40% receive 38% of global income but own only 23% of wealth, while the bottom half of the world’s population survives on just 8% of income and owns a mere 2% of global wealth.
While South Africa ranks highest in income inequality, followed by Colombia, Chile, Brazil, and Mexico, India ranks sixth. India’s top 1% hold 22.6% of the national income and own 40% of the national wealth. The top 10% account for 57.7% of income and 65% of wealth. The middle 40% earn 27.3% of income and own 28.6% of wealth, while the bottom 50%— half the population—receive only 15% of income and own just 6.4% of the country’s wealth.
As Stiglitz and Ghosh emphasise, inequality in India is not confined to income and wealth alone but is interwoven with gender, caste, region, and access to public services. Extreme inequality is economically inefficient, socially corrosive, and ecologically unsustainable. It weakens democracies, fragments social cohesion, erodes political consensus, and intensifies climate vulnerability—bur dens borne disproportionately by those least responsible.
Stiglitz and Ghosh advocate the creation of an international panel on inequality, akin to the IPCC for climate change—to systematically monitor trends and guide evidence-based policy making. The report also stresses the need to reform the global financial system, which remains structurally biased in favour of wealthy nations.
Advanced economies can borrow cheaply and invest abroad at higher returns, effectively functioning as financial rentiers. As a result, around 1% of global GDP flows annually from poorer to richer countries through unequal income transfers—nearly three times the volume of global development aid. Coordinated global taxation, corrective levies on excessive surpluses, and stronger international financial governance could substantially reduce these imbalances.
At the national level, regressive tax structures further exacerbate inequality. The absence of inheritance and net wealth taxes, combined with cuts in corporate tax rates, has sharply reduced tax progressivity even as the fortunes of the ultra-rich have expanded rapidly. In many countries, including India, elites pay proportionally less tax than lower- and middle-income households, depriving states of resources needed for education, healthcare, social protection, and climate action.
Progressive taxation is essential to ensure that those with the greatest means contribute their fair share. Greater transparency, stronger redistribution, and coordinated global action on taxation and capital regulation are therefore indispensable.
The writer is an Odisha-based economist and columnist.
