FACT CHECK

Income Inequality: Did Oxfam, ‘The Wire’ and Rahul Gandhi Ignore or Even Misrepresent Facts?

Oxfam

The Wire article ‘Richest 1% Cornered 73% of Wealth Generated in India in 2017: Oxfam Survey’, published January 22, 2018, talks about the recent Oxfam report titled ‘Reward Work, Not Wealth’, which says that the richest 1% in India cornered 73% of the wealth generated last year. The veracity and consistency of these claims with facts need to compared — and need to be compared with other similar nations. Congress president Rahul Gandhi picked up the report and questioned the current government over its “findings”.

It is also interesting that The Wire has mentioned the World Inequality Report, published by the World Inequality Lab, in the same article. The Wire seems to be overplaying the concern of income inequality by quoting two reports, but the fact is that the findings of these two reports differ by a considerable margin, which makes us question the consistency of the facts presented by The Wire report.

IT IS AN OXFAM REPORT, NOT A SURVEY

Before getting on with the facts, let us understand that what The Wire calls the Oxfam survey is actually a report, based on the findings of Credit Suisse’s Global Wealth Databook 2017. Therefore, the findings are not from an Oxfam survey, unlike what The Wire writes. In our earlier article ‘Why Income Inequality in India Needs a More Nuanced Perspective’, we had talked about the concerns raised over these findings.

DISCREPANCIES IN FACTS PRESENTED BY ‘THE WIRE’

The Wire article reads like a mesh of facts randomly and deliberately thrown in to make a case. On one hand, the article mentions the World Inequality Report, which says that the top 1% of earners captured 22% of the total income in 2014.

On the other hand, the headline says that ‘Oxfam survey’ found that the top 1% cornered 73% of the wealth generated last year, and the same Oxfam survey is based on the Credit Suisse report, which mentions that India’s top 1% has 45.1% wealth share, which is better than China at 47%.

It is, therefore, difficult, to put it generously, to discern which figure The Wire really wants to discuss.

Moreover, the World Inequality Report data quoted is from 2014, which cannot be the basis for attacking the current government on its efforts to bridge the income gap.

SHOULD RAHUL GANDHI QUESTION OR BE QUESTIONED ABOUT INCOME INEQUALITY?

Rahul Gandhi seemed to be up in arms against the government using the Oxfam report. Mr Gandhi tried to mock the Prime Minister, just after his keynote address at the WEF in Davos on January 23, by asking him to explain why there was a so-called rise in income inequality. Let us see the tweet:

Mr Gandhi did not need to seek answers from the current Prime Minister who is abroad, when the same were already available back home. Below, for instance, is the graph on income inequality presented by the World Wealth & Income Database:

The figure above clearly shows that between 2000 and 2013, income of the top 1% and 10% steadily rose to unprecedented levels, while that of the middle 40% and bottom 50% constantly declined. Now, we know for certain whose government was in office for most of the years between 2000 and 2013 — the UPA government was in power for two consecutive terms spanning a decade.

It seems Mr Gandhi has questions to answer himself on income inequality instead of questioning the PM in office today.

DID INCOME INEQUALITY RISE BETWEEN 2016 AND 2017?

Keeping the rhetoric aside, the question that needs to be asked is whether income inequality rose under the current government between 2016 and 2017.

Let us look at the following tables from the Credit Suisse report from 2016, followed by the 2017 report:

We can see that in 2016, the top 1% had 58% and top 10% had 80% of wealth share.

This fell to the top 1% having 45% and the top 10% having 73% of wealth share in 2017.

Therefore, the same data source used by Oxfam and cited by The Wire shows that income inequality in India actually declined between 2016 and 2017.

Neither The Wire nor Oxfam seems to have noticed or presented these facts, which clearly show that in the year concerned, according to the very data they have relied on there has been a decrease in income inequality.

This very argument has also been made on social media, particularly by Mr Anand Ranganathan on his Twitter timeline, also pointing out this crucial fact has been ignored by the Indian media:

In conclusion, it appears that there has been a misrepresentation of facts on the part of Oxfam as well as The Wire.

 

For detailed analyses of the Credit Suisse report and WIR, read our earlier articles:
Why Income Inequality in India Needs a More Nuanced Perspective
World Inequality Report: Analysing the Arguments Made by Thomas Piketty, et al and the Spin Given by the Media

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