New Delhi: Finance Minister Nirmala Sitharaman on Monday told the Lok Sabha that income inequality in India has “declined sharply”, asserting that the gap between the rich and the poor in terms of asset ownership has also narrowed, particularly in urban areas.
Her remarks came in response to questions from the Opposition regarding the recently released World Inequality Report 2026, which described India as “one of the most unequal” countries, noting that the top 1% of the population owns around 40% of the nation’s wealth.
Asset Ownership Gap Narrowing, Says FM
Countering the findings of the report, Sitharaman said that data shows a significant improvement in asset ownership among lower-income households, especially in cities.
She pointed out that the ownership of aspirational consumer goods—including mobile phones, televisions, refrigerators and two-wheelers—has grown at unprecedented rates among the bottom 40% of households.
“The gap in asset ownership between the rich and the poor has narrowed,” the finance minister said, stressing that rising access to durable goods reflects improved living standards rather than deepening inequality.
Refrigerators No Longer a Luxury
Highlighting changes in consumption patterns, Sitharaman said that items once considered luxuries are now becoming necessities.
“Refrigerators have moved from being a luxury item to a necessity, with ownership among the urban bottom segment rising strongly,” she said, underlining the shift in household consumption and aspirations.
Concern Over Rising Debt Levels
While defending the government’s position on inequality, Sitharaman also flagged growing debt concerns, particularly at the state level.
She said that debt-to-gross state domestic product (GSDP) ratios have been worsening in several states, calling for coordinated action to address the issue.
Household Debt Rising: RBI Data
The finance minister referred to recent Reserve Bank of India (RBI) data, which showed that household debt rose to 4.7% of GDP in FY 2024–25, up from 3.9% in FY19. However, she noted that it had moderated from a post-pandemic peak of 6.2% in FY24.
Opposition vs Government Narrative
The debate highlights a growing divide between global inequality assessments and the government’s reading of domestic data. While the World Inequality Report flags concentration of wealth at the top, the Centre maintains that broader asset ownership and rising consumption among lower-income groups signal a narrowing of economic gaps.