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INCOME INEQUALITY IN INDIA MADHURA SWAMINATHAN AND VIKAS RAWAL.

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Presentation on theme: "INCOME INEQUALITY IN INDIA MADHURA SWAMINATHAN AND VIKAS RAWAL."— Presentation transcript:

1 INCOME INEQUALITY IN INDIA MADHURA SWAMINATHAN AND VIKAS RAWAL

2 There is an impression – both within India and outside – that India is a country of relatively low income inequality. Indias Gini index more favourable that those of comparable countries like South Africa, Brazil … China, and even the USA, which are otherwise ranked very high in human development. India 36.8 South Africa 57.8 Brazil 55 China 41.5 USA 40.8 Source: HDR 2010 cited in Economic Survey

3 Income versus expenditure inequality Comparing non-comparables, like tea and rice Inequality in expenditure less than inequality in incomes Savings of rich households Expenditure of poor households (dis-saving) Levels versus trends

4 INCOME DATA FROM NCAER National Council for Applied Economic Research (NCAER) 1993: covered 16 States and 35,130 households 2005: covered all States and 26,734 rural households and 14,820 urban households Estimates of income inaccurate Aggregated (recall problems) Non-standardised questions Consistency across households

5 Gini for rural incomes was 0.46 in and 0.50 in (Azam and Shariff 2009) Gini for rural incomes was 0.54 in (Vanneman and Dubey 2010)

6 VILLAGES SURVEYED IN 2006 AND 2007 Table 1 Location of survey villages VILLAGEDISTRICTSTATEAGROECOLOGICAL TYPE ANANTHAVARAMGUNTURANDHRA PRADESH PADDY DOMINATED AREA BUKKACHERLAANANTAPURANDHRA PRADESH DRY AND DROUGHT PRONE, GROUNDNUT AREA KOTHAPALLEKARIMNAGARANDHRA PRADESH GROUND WATER IRRIGATED, MULTI-CROP HAREVLIBIJNORUTTAR PRADESH100% CANAL IRRIGATED, WITH GROUND WATER, WHEAT- SUGARCANE MAHATWARBALLIAUTTAR PRADESHGROUND WATER IRRIGATED, WHEAT PADDY ROTATION WARWAT KHANDERAO BULDHANAMAHARASHTRAUN-IRRIGATED, COTTON REGION NIMSHIRGAONKOLHAPURMAHARASHTRAIRRIGATED SUGARCANE AND MULTI-CROP SYSTEM 25F GULABEWALASRIGANGANAGARRAJASTHANCANAL AND GROUNDWATER IRRIGATION, WITH COTTON, WHEAT AND MUSTARD

7 Methodology Income includes all cash and kind incomes. All incomes are net of costs incurred by the households in the process of production and income generation. The surveys used a comprehensive definition of incomes, and included detailed modules on incomes from crop cultivation, from animal husbandry and from wage labour, as well as from salaried employment, non-agricultural self-employment, rent and other transfers. A total of 20 sources of income were used to construct the final income variable. Survey years: (5 villages) and (3 villages) All incomes at prices

8 Table 2 Mean and median annual household incomes (in Rs) VILLAGESTATEYEARMEANMEDIAN ANANTHAVARAMANDHRA PRADESH200659,17325,629 BUKKACHERLAANDHRA PRADESH200636,57219,517 KOTHAPALLEANDHRA PRADESH200633,98722,309 HAREVLIUTTAR PRADESH200670,47726,575 MAHATWARUTTAR PRADESH200631,23719,895 WARWAT KHANDERAOMAHARASHTRA200758,11531,488 NIMSHIRGAONMAHARASHTRA200769,07440,293 25f GULABEWALARAJASTHAN ,77438,430

9 Table 3 Mean per capita income, study villages in Rs per annum at prices Village (State)Year of surveyAll Ananthavaram (AP) ,676 Bukkacherla (AP) ,536 Kothapalle (AP) ,438 Harevli (UP) ,657 Mahatwar (UP) ,487 Warwat Khanderao (MAH) ,108 Nimshirgaon (MAH) , F Gulabewala (RAJ) ,991

10 Table 4 Gini coefficients of per capita income, by village (in per cent) VillagePersons Ananthavaram60.2 Bukkacherla53.9 Kothapalle56.5 Harevli59.8 Mahatwar51.6 Warwat Khanderao53.1 Nimshirgaon F Gulabewala68.6 Note. These are adjusted Gini coefficients, following Chen, Tsaur and Rhai (1982). There were substantial variations across villages, although the common feature of the three villages with higher than average inequality was that they were canal-irrigated villages.

11 Table 5 Gini coefficients of per capita income, selected countries Country/Region Gini coefficient of per capita income (%) Slovak Republic19.5 Paraguay62.3 Latin America56.0 Europe36.0 Japan27.1 Former Soviet Union countries34.4 China*36.0 India*30.0 Palma (2006) and *from ESCAP Yearbook 2009.

12 Table 6 Distribution of per capita income by decile, study villages in per cent DecileAnanthavaramBukkacherla Warwat KhanderaoNimshirgaon 25 F Gulabewala All D10/D

13

14 Figure 1. Kernel density plots of per capita incomes for persons belonging to Dalit and Other households, Ananthavaram, Andhra Pradesh

15 Figure 2. Kernel density plots of per capita incomes for persons belonging to Dalit and Other households, Bukkacherla, Andhra Pradesh

16 Figure 3. Kernel density plots of per capita incomes for persons belonging to Dalit and Other households, 25 F Gulabewala, Rajasthan


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