World Inequality Report - Reading inequality using Lorenz Curve

(Source: Policy Prism Artwork)

The World Inequality Report 2026 presents a comprehensive view of how and why economic growth and economic equality may not automatically move in tandem. So, while global and Indian GDP is expanding and poverty is experiencing declines, wealth and income tend to remain concentrated in the hands of a few.  The present read brings a clear understanding of how this divergence look like using a Lorenz Curve, a tool to show how income and wealth distributions across population. 

World Inequality Report 2026 - Key Highlights

Global Income and Wealth Inequality

• Top 10% owns two-third of global wealth and 53% of global income

• Bottom 50% owns just 2% of global wealth and 8% of global income

• Top 1% has 37% of global wealth and 20% of global income- controlling more than 18 times the wealth of entire bottom half of world population.

 

(Source: World Inequality Report 2026)

This means that bottom half contributes negligible to cumulative wealth and most accumulation happens in the last decile in the Lorenz Curve.

Additionally, on carbon emissions, the report finds that global richest population emits the most carbon than the poor.

India’s Inequality Scenario

• Top 10 % of the Indian Population covers 58% of national income and 65% of national wealth.

• While bottom 50% contributes just 15% to the national income.

• Top 1% contributes 40% to the national wealth.

• Low female participation further lowers down the wages of the poor, bending the Lorenz curve further outward.

Key Insights

The Graph below shows the inequality status of India and world using the Lorenz Curve. These are stylized curves comparing India's inequality of income and wealth with that of the world using data from World Inequality Report 2026.

(Source: Policy Prim Analysis)

(Shows comparative and stylized curves using data from World Inequality Report 2026 and are not the exact estimations)

• The shape of the Lorenz curve signals superiority of capital returns over labour income, implying that returns to capital rises faster than the wages.

• India’s Lorenz Curve lies below the global Lorenz Curve and shows limited improvement at the bottom deciles despite being the fastest growing economy.

• India’s growth is largely defined by skilled, capital and urban based economy, while wages of agricultural and rural workers are lagging.

Cross Country Comparisons

                 (Source: Policy Prism Compilation using World Inequality Report 2026)

Conclusion

The World Inequality Report 2026 brings out that inequality is not just about a moral issue, but it is a measurable economic distortion. The Lorenz curve actually shows who benefits from the growth. The aim for any country is not just to grow faster but to bring the curve closer to the perfect line of equality.

About Report –

• 3^rd edition after 2018 and 2022

• Released by the World Inequality Lab

• Accessible at https://wir2026.wid.world/

 Contact: Policypris02@gmail.com for research and consultancy