The richest one percent of the world population owns about 40 percent of the world's assets, while the bottom half owns no more than one percent, a United Nation Development Programme (UNDP) report said.
The report "Humanity Divided: Confronting Inequality in Developing Countries" was launched Wednesday in New York and it says that "inequality can undermine the very foundations of development and social and domestic peace", if left unchecked.
It said that sustained reduction in inequality requires a shift to more inclusive growth patterns, which are supported by redistributive policies and changes in social norm.
"Inequalities on today's levels are unjust, and as demonstrated in this report, they also impede human progress," said Helen Clark, UNDP administrator who launched the report.
"The report explores the causes and consequences of the inequalities which divide us - within and between countries - and argues that there is nothing inevitable about growing inequality," she added.
According to the report, adjusting for population size, income inequality increased by 11 percent in developing countries between 1990 and 2010.
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"A significant majority of households in developing countries, more than 75 percent of the population, are living in societies where income is more unequally distributed than it was in the 1990s," the report said.
However, it said that "high and persistent inequality goes beyond income".
The report added that despite majority of developing countries recording an overall decline in maternal mortality, women in rural areas are still up to three times more likely to die while giving birth as compared to their urban counterparts.
Analyzing global inequality trends while identifying causes and extent of inequalities, their impact, and ways in which they can be reduced, the report showed that children in lowest wealth group from developing countries are three times more likely to die before their fifth birthday that those born in the highest wealth group in some regions.
"Social protection has been extended, yet persons with disabilities are up to five times more likely than average to incur catastrophic health expenditures," the report said.
After illustrating the results of an investigation of policy makers' views of inequality, the report prepared by Poverty Practice in the Bureau for Development Policy, UNDP, concludes with a comprehensive policy framework to confront inequality in developing countries.