Citing countries like the US and India, the two largest democratic countries, the International Monetary Fund (IMF) managing director Christen Lagarde has said that income inequality is increasing dangerously globally.
"In India, the net worth of the billionaire community increased twelve-fold in 15 years, enough to eliminate absolute poverty in this country twice over," said Lagarde delivering the Richard Dimbleby Lecture in London, according to the copy of the speech made available by the IMF.
"We are all keenly aware that income inequality has been rising in most countries.
"Seven out of ten people in the world today live in countries where inequality has increased over the past three decades," she said adding that the richest 85 people in the world own the same amount of wealth as the bottom half of the world?s population.
In the US, inequality is back to where it was before the Great Depression, and the richest 1 percent captured 95% of all income gains since 2009, while the bottom 90 percent got poorer, Lagarde said ruing that in the past, economists have underestimated the importance of inequality.
"They have focused on economic growth, on the size of the pie rather than its distribution.
"Today, we are more keenly aware of the damage done by inequality.
"Put simply, a severely skewed income distribution harms the pace and sustainability of growth over the longer term.
"It leads to an economy of exclusion, and a wasteland of discarded potential," Lagarde said.
Observing that over the next three decades, the world?s population will get much larger and much older, she said in 30 years time, there will be about two billion more people on the planet, including three quarters of a billion people over the age of 65.
By 2020, for the first time ever, there will be more old people over 65 than children under five, she added.