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The Billionaire Raj?

As India’s economy continues its upward growth trajectory, wealth and income inequality have become more pronounced. But the country remains less unequal than many of its peers, and rising inequality may be a small price to pay for the overall reduction in poverty.

DUBAI – Several reports in the last few months have sounded the alarm about growing income and wealth inequality in India. The statistics cited are not wrong, but they are incomplete. And they have produced sensational, but misleading, news stories.

For example, an article based on Oxfam’s recent “Inequality Kills” report notes: “India has the third-highest number of billionaires in the world.” The story points out that India has 142 billionaires but ignores that India has 1.4 billion people. Only one in ten million Indians is a billionaire, whereas such “billionaire density” is eight in Russia, three in Brazil, more than four in China, and 22 in the United States. Likewise, while “India has more billionaires than France, Sweden, and Switzerland combined,” in terms of billionaire density, these three countries together have 18 times more billionaires than India.

It should come as no surprise that rich countries have more billionaires relative to their populations than poor countries do. For a more accurate comparison, consider billionaire density in middle-income countries. Relative to the world’s top 20 middle-income economies, India ranks quite low. Countries like Brazil, Malaysia, and Thailand have a far greater number of billionaires relative to their size.