India is the second most populated country in the world having a population of 1.3 billion and is also the 7th largest country in the world. Although our GDP is ranked 6th in the world, just below the UK and
with stats of $2.66 trillion, very small portion of the population enjoys this amount of money. The only 1% ultra-rich people account for majority of the income to the country, as far as 73% of the wealth of the country. This small portion of ultra-rich people sets a huge barrier to develop the situation of the poor people as the rate of income inequality rises. Most of the wealth of the country is concentrated only towards that 1% and the remaining 800 million people in India considered as poor, barely have any increase in their income. More than 68.8% of India’s population survives with less than $2 a day and this 68.8% account for poverty in India. Wealth isn’t spread equally among all states. It is not just the industrialized states that make us rich, in fact only a small portion of states are industrialized and majority of the states are underdeveloped. The reason why only certain states
are emerging as industrialized states is because there is lack of employment opportunities in the rural side. Due to the lack of employment opportunities in the rural side, many of them shift to the
city for a better living and this causes over population in the cities. Reasons for low employment rate in the rural areas can be of many reasons such as harassment from informal sources of credit, lack of
assets and collateral, etc.
Hence, from the above paragraph, we can conclude than income inequality and the inequality in the contribution to the wealth of the country are one of the 2 main factors for poverty in India.