India

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Overview of Trends of Economic Inequality in India

 

Has the dispersion of earnings been increasing in recent decades?Yes, the Gini coefficient for individual earnings increased by 8 percentage points from 1993 to 2004.
Has overall inequality increased in recent years?Yes, the Gini coefficient (from expenditure data) increased by 3 percentage points from 1994 to 2010.
Have there been periods when overall inequality fell for a sustained period?Yes, some decline in overall inequality after Independence.
Has poverty been falling or rising in recent decades?Falling at least since 1983. Note, however that we only observe measures of absolute poverty.
Has there been a U-pattern for top income shares over time?Yes, top income shares fell from 1940 to 1980 and then rose; share of top 1 per cent doubled.
Has the distribution of wealth followed the same pattern as income?No evidence
Additional noteworthy features

Sources and References

Sources for the historical data series:

Overall inequality: Gini coefficient for per capita expenditure, series 1,from the World Bank website, World Development Indicators; ; Gini coefficient for per capita expenditure, series 2 from World Income Inequality Database WIID2c, available on the UNU-WIDER website.

Top income shares: Share of top 1 per cent and top 0.1 per cent in total gross income from WTID, based on work of Banerjee and Piketty (2010).

Poverty: Percentage below Planning Commission poverty line (absolute) from Government of India, Planning Commision 2013, linked back at 1993 to Majumdar (2010, Table 4.2), percentage below Planning Commission poverty line (absolute).

Earnings: Gini coefficient of wages of regular workers from Majumdar (2010, Table 4.4).

Wealth: no suitable data were found.

References:

  • Asian Development Bank, 2007, Key Indicators 2007, Asian Development Bank, Manila.
  • Banerjee, A and Piketty, T, 2010, “Top Indian incomes, 1922-2000” in A B Atkinson and T Piketty, editors, Top incomes: A global perspective, Oxford University Press, Oxford.
  • Government of India, Planning Commission, 2013, Poverty Estimates for 2011-2012, Government of India, Press information Bureau.
  • Majumdar, D, 2010, “Decreasing poverty and increasing inequality in India” in Tackling inequalities in Brazil, China, India and South Africa, OECD, Paris.