The International Monetary Fund (IMF) has said that among Asia-Pacific countries, Financial Inequality is highest in India and China. Though the two countries are among the fastest growing economies, their financial inequality is higher compared to other countries. According to IMF, China and India have grown rapidly and reduced poverty sharply.

This impressive economic performance has been accompanied by increasing levels of inequality. “In the past, rapid growth in Asia came with equitable distribution of the gains. But more recently, while the fast-growing Asian economies have lifted millions out of poverty they have been unable to replicate the ‘growth with equity’ miracle,” IMF said.

It said that India has struggled to lift their population towards high-income levels, whereas China managed to increase middle class in urban areas. After identifying many factors, the inequality between rural and urban in India and China were estimated.

In China, rapid industrialisation in particular regions and the concentration of foreign direct investment in coastal areas have led to substantial inequalities between coastal and interior regions. IMF said inter-provincial inequality is lower in India than in China and rising inequality in India has been found to be primarily an urban phenomenon.

Hence, the two countries have introduced a number of policies to control the rising inequality. Moreover, various social programs are aiming to expand social safety nets and provide support for the development of rural areas and western regions.