The World Inequality Report 2026 has arrived with stark statistics about India’s economic condition—and an equally disquieting reflection of who we are becoming. The richest 10 percent of Indians now control around 65 percent of the nation’s wealth; the top 1 percent alone holds about 40 percent. Meanwhile, the bottom half of the population subsists on roughly 3 percent. These are not merely entries in a statistical annex. They point to a deepening misalignment between the social order envisaged at Independence and the one that has actually emerged under our present economic arrangements.
The government’s preferred response has been to highlight India’s consumption-based Gini coefficient of 25.5 and to suggest that this makes us one of the more “equal” countries in the world. That claim merits closer examination. The metric most often invoked in official discourse captures inequality in consumption, which tends structurally to understate underlying disparities because higher-income groups can and do save a substantial share of their income. When the focus shifts to income and wealth—measures that correspond more closely to economic power and security—India’s relative position looks markedly different. Our income Gini coefficient is estimated at about 61–62, placing India among the more unequal countries globally, while wealth inequality is even more pronounced, with the wealth Gini commonly assessed in the mid-70s to low-80s range. The distance between official narrative and empirical reality is therefore substantial and growing.
The Constitutional Promise Unfulfilled
“We, the people of India,” begins the Preamble to our Constitution, resolve to secure justice, liberty, equality and fraternity. The three fundamental rights that follow—Articles 14, 15 and 16—encode equality before the law, the prohibition of discrimination and equality of opportunity. Dr B.R. Ambedkar, the principal architect of the Constitution, consistently argued in the Constituent Assembly that these guarantees could not be meaningful in the absence of some degree of substantive social and economic equality. Political non-discrimination, he warned, would be inadequate if entrenched economic hierarchies remained intact.
The historical context supports this reading. Before Independence, the freedom struggle was closely intertwined with emergent movements for workers’ rights. Gandhi’s intervention in the 1918 Ahmedabad mill strike, his view that independence was incomplete so long as workers remained subject to exploitation, and the manner in which early labour organising meshed with national politics all pointed to an understanding in which economic justice and political freedom were mutually reinforcing. Nehru and Subhas Chandra Bose, in different ways, envisaged a post-colonial state that would adopt broadly socialist approaches to industry and labour. Even the symbolic repertoire of the national movement—the Salt March, for instance—was deliberately designed to evoke a more egalitarian social order.
The founding constitutional settlement, then, was not only about replacing foreign rule with national sovereignty. It carried with it an implicit commitment to a more just ordering of economic life.
Workers Erased from Decision-Making
Contemporary labour market structures, however, reveal a significant departure from that ambition. Workers—on whose efforts the economy ultimately depends—are now largely absent from the institutional arenas where decisions about wages, protections and working conditions are taken.
India’s informal sector is estimated to account for roughly 80 to 93 percent of total employment. It spans agriculture, construction, domestic work, street vending, small manufacturing and a wide array of services. For most of these workers, bargaining power is minimal, access to social security is limited or non-existent, and formal representation in policy-making bodies is rare. The Technical Committee for Wage Determination, which sets minimum wages for some of the lowest-paid workers, notably does not include representatives of workers’ organisations. The new labour codes that came into force in November 2025—consolidating 29 previous laws—were adopted without what could reasonably be described as robust tripartite consultation, despite earlier assurances that workers, employers and the state would share the reform space. Several trade union federations have therefore characterised the process as one in which workers’ concerns were marginalised rather than substantively accommodated.
Distributional indicators reinforce this sense of exclusion. The top 10 percent of the population captures about 58 percent of national income, while the bottom 50 percent receives only around 15 percent. A typical individual in the bottom half of the wealth distribution owns roughly €6,500 (around $7,550) in assets, a modest cushion when set against the holdings and risk-bearing capacity of those at the top. The wealthiest 10 percent earn, on average, about 13 times more than the poorest 10 percent. Yet those in the lower deciles have limited influence over the legal and regulatory choices that produce and sustain these disparities.
Gender further sharpens these inequalities. Female labour force participation in India stands at only about 15.7 percent and has shown little improvement over the past decade. When unpaid domestic and care work is taken into account, women’s effective hourly earnings are estimated at roughly one-third of men’s. At the same time, the new labour codes, while presented as strengthening institutional mechanisms for redress, have reduced the mandated representation of women on certain grievance committees from one-half to one-third. At a moment when women’s economic vulnerability remains high, the formal avenues through which they can influence workplace norms have not been strengthened commensurately.
The Informal Economy’s Silent Suffering
The lived reality of informal work illustrates the stakes. A majority of Indian workers operate outside stable contractual frameworks, without health insurance, pension provision, reliable access to formal credit or meaningful job security. They are also disproportionately exposed to climate-related shocks—irregular monsoons, extreme heat events, floods—that can erode incomes or wipe out assets with little warning. In a labour market where the supply of work-seekers is high and institutional protections are thin, the capacity of individual workers to negotiate fair terms is inherently constrained.
Despite this, informal workers have played a demonstrable role in electoral politics, often turning out to vote in large numbers and shaping outcomes in marginal constituencies. Yet their influence on the design of labour, social protection and urban policy remains limited. They appear prominently in campaign rhetoric but infrequently in policy consultation processes. Their presence in the democratic sphere is therefore more visible in the voting queue than at the policy drafting table.
There are, of course, important counter-examples. Organisations such as the Self-Employed Women’s Association (SEWA), with a membership now in the millions, have shown that sustained collective action can expand the political and economic space available to informal workers. Through co-operative structures, advocacy and negotiation, SEWA and similar bodies have helped secure housing rights, social security measures and minimum income campaigns for sections of their membership. Yet these successes, while significant, are still exceptions within a much larger landscape in which most informal workers remain largely unorganised and underrepresented.
Recent Labour Reforms: A Technocratic Erasure
The four consolidated labour codes enacted in November 2025 offer a useful lens on this broader pattern. Officially, the reforms are framed as an effort to modernise and rationalise an unduly complex legal framework, improve the ease of compliance and extend protections to categories of workers previously outside the formal ambit of labour law. There are elements of this agenda that clearly move in that direction—for example, explicit recognition of platform and gig workers, the attempt to standardise minimum wage norms and to consolidate social security provisions.
However, the legislative and consultative process surrounding the codes raises questions. The enactment occurred during a parliamentary session marked by the suspension of significant segments of the opposition, limiting substantive debate. Trade unions and independent labour experts have argued that multiple rounds of structured engagement with worker organisations did not take place in the manner expected of a genuinely tripartite process. Beyond procedure, several substantive provisions shift the balance of power between labour and capital.
The threshold for prior government approval of layoffs has been raised from 100 to 300 workers, allowing a larger set of firms to undertake retrenchment without the earlier level of scrutiny. Restrictions on the conditions under which strikes may be called have been tightened, including in parts of the private sector. Recognition of a trade union as the sole negotiating agent now requires support from a majority of workers in the establishment—a high bar that can fragment representation in workplaces with diverse or precarious employment patterns. For many unionists, these changes are experienced less as neutral “rationalisation” and more as a rebalancing of institutional power away from workers’ collective voice.
The Ideological Reversal
The cumulative effect of these developments is to produce an uncomfortable contrast with the normative orientation of the founding period. The emphasis on equality in the Constitution was not merely rhetorical. Dr Ambedkar and his colleagues, reflecting on the colonial experience, saw clearly that political rights could coexist with deep economic stratification unless the latter was deliberately addressed.
They also drew upon older strands of Indian thought that stressed ethical responsibility and social restraint. The Buddha’s critique of caste hierarchy and his insistence that spiritual advancement was not the monopoly of any birth group represented a powerful egalitarian impulse long before modern democratic theory emerged. Ashoka’s Dhamma, as interpreted by many historians, can be read as an early attempt to define statecraft in terms of welfare and moral responsibility to all subjects, rather than privilege for a narrow elite. These intellectual resources were explicitly invoked in the mid-twentieth century as evidence that an egalitarian, rights-based democracy could be both modern and rooted in Indian traditions.
By contrast, contemporary policy discourse often privileges a different set of priorities. The guiding questions increasingly concern how to optimise “ease of doing business” indicators, attract investment and reduce perceived regulatory burdens. None of these aims is illegitimate in itself; economic growth and investment are clearly essential for job creation and poverty reduction. The concern, rather, is that the distributive and participatory dimensions that once sat at the centre of constitutional imagination now appear peripheral. Labour law is frequently framed less as an instrument to protect those with weaker bargaining power and more as an impediment to efficiency that must be streamlined.
What Genuine Worker Voice Would Look Like
This is not to suggest that all existing labour regulation is desirable or that the pre-consolidation framework was optimal. The earlier mosaic of 29 laws was undeniably complex, occasionally inconsistent, and at times lent itself to rent-seeking behaviour by local officials. Reform was needed. The question is not whether to reform, but how—and with whom.
A different approach would have foregrounded meaningful worker participation at each stage. Genuine tripartite consultation would entail giving representative workers’ organisations a central place in agenda-setting, not only in the final stages of drafting. Committees determining minimum wages could be structured so that workers’ and employers’ representatives have symmetrical voting rights, with the state playing a balancing role rather than a dominant one. Provisions affecting the right to organise and strike could be debated transparently with those directly affected, exploring safeguards against abuse without rendering these rights largely notional.
Policy design could also revisit some earlier ideas that were never fully implemented. A national minimum wage benchmarked to realistic living costs and indexed to inflation; social security mechanisms that cover all workers, regardless of whether they are in formal employment; legal frameworks that facilitate, rather than impede, collective bargaining in emerging sectors such as platform work—each of these would move the system closer to the egalitarian aspirations articulated at Independence. Alongside legal change, there is a need to rebuild organisational channels—unions, co-operatives, worker associations—that can articulate the interests of diverse segments of the working population in an increasingly fragmented labour market.
The Larger Reckoning
The present moment, viewed through the lens of inequality data and labour law reform, invites a wider reflection on the trajectory of the Indian republic. The World Inequality Report records trends that many workers, particularly in the informal economy, experience daily: rising concentration of income and wealth, limited social protection and heightened vulnerability to shocks. The report also underscores an analytical point that bears emphasis in our domestic debates: distributional outcomes are shaped by political choices—about taxation, public expenditure, regulation, land and labour institutions—not by impersonal forces alone.
In 1950, the adoption of the Constitution signalled a commitment to a republic in which formal political equality would gradually be matched by moves towards economic and social justice. Workers were framed not merely as inputs in a production function but as citizens with a claim to voice and dignity. The strikes, marches and satyagrahas that contributed to the freedom movement were part of the foundation upon which this claim rested.
Today, there is a discernible divergence between that original horizon and the structures that are taking shape. Each incremental change that raises thresholds for protection, constitutes committees without adequate worker representation, constrains collective action or bypasses meaningful consultation contributes to a gradual reconfiguration of the state’s relationship with labour. None of these measures, in isolation, amounts to a decisive break. Taken together, however, they indicate a shift in emphasis—from equality as a central organising principle towards a more attenuated concern with distribution and voice.
For workers who live close to subsistence, the latest inequality statistics are unlikely to be revelatory. They encapsulate, in quantitative form, realities long visible in everyday life. What is missing is not awareness but agency: the capacity to shape the rules within which economic life unfolds. Restoring that capacity would require a deliberate re-centring of equality and participation in policy design, and a willingness to see organised labour not as an obstacle but as a partner in governing a complex economy.
Unless steps are taken in that direction, the distance between India’s constitutional vision and its contemporary distribution of economic power will remain wide—and may continue to widen.
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