New Delhi
A new report from the State Bank of India (SBI) on Friday reveals that income inequality among people earning up to Rs 5 lakh a year has dropped by 74.2% between 2013-14 and 2022-23. This report counters the common belief that inequality in India is getting worse.
The SBI’s Economic Department studied income trends from the 2014-15 and 2023-24 financial years. The findings show that those in lower income groups are earning more, which helps them move closer to their share of the population. For instance, the share of income disparity for individuals earning up to Rs 3.5 lakh fell from 31.8% in FY14 to 12.8% in FY21, indicating a 19% increase in income for this group.
The lower-income group (earning less than Rs 5.5 lakh) has consistently seen positive growth over the past decade, except in 2020 due to the pandemic.
States like Maharashtra, Delhi, Gujarat, and Karnataka, which have traditionally been leaders in tax filings, are now reaching their limits, with their share of tax filings decreasing. In contrast, Uttar Pradesh is increasing its share of income tax filings.
The report also notes that direct taxes made up 56.7% of total tax revenue in 2024, the highest in 14 years. Additionally, around 8.6 crore income tax returns were filed in the 2024 financial year, up from 7.3 crore in 2022. Notably, 79% of these returns were filed on time, a significant improvement from previous years.
