In his best-selling book Capital in the Twenty-First Century, the French economist Thomas Piketty argued that capitalist economies have a natural tendency to incubate highly unequal distributions of income and wealth. Now Mr Piketty has, with Lucas Chancel, written a new paper entitled “Indian Income Inequality, 1922-2014: From British Raj to Billionaire Raj?”.

Using a complex mix of data on income tax, national accounts and household surveys, Messrs Piketty and Chancel conclude that the top 1 per cent of earners in 2014 earned 22 per cent of Indian national income, the highest share since 1922, when income tax was introduced. The share of the top 1 per cent fell sharply between 1951 and 1980, and then rose again in the period 1980-2014, particularly after the beginning of economic liberalisation in 1991.

There are two problems with their argument. One is statistical. The other is their failure to distinguish between different kinds of inequality. Absent such caveats, the paper implies that the era of socialist planning in India was fair, distributionally speaking, and the era of “pro-business, market deregulation policies” that followed unfair. That is a half-truth at best.