Documents
Resources
Learning Center
Upload
Plans & pricing Sign in
Sign Out
Get this document free

Madhura_Swaminathan

VIEWS: 80 PAGES: 16

									 INCOME INEQUALITY IN INDIA




MADHURA SWAMINATHAN AND VIKAS RAWAL
• There is an impression – both within India and outside – that
  India is a country of relatively low income inequality.

• India’s 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 2010-2011
• 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
                  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
• Gini for rural incomes was 0.46 in 1993-94
  and 0.50 in 2004-05 (Azam and Shariff
  2009)

• Gini for rural incomes was 0.54 in 2004-05
  (Vanneman and Dubey 2010)
VILLAGES SURVEYED IN 2006 AND 2007

Table 1 Location of survey villages
VILLAGE              DISTRICT             STATE         AGROECOLOGICAL TYPE
ANANTHAVARAM         GUNTUR             ANDHRA         PADDY DOMINATED AREA
                                        PRADESH
BUKKACHERLA        ANANTAPUR            ANDHRA        DRY AND DROUGHT PRONE,
                                        PRADESH          GROUNDNUT AREA
KOTHAPALLE         KARIMNAGAR           ANDHRA        GROUND WATER IRRIGATED,
                                        PRADESH            MULTI-CROP
HAREVLI              BIJNOR           UTTAR PRADESH   100% CANAL IRRIGATED, WITH
                                                        GROUND WATER, WHEAT-
                                                              SUGARCANE
MAHATWAR              BALLIA          UTTAR PRADESH   GROUND WATER IRRIGATED,
                                                       WHEAT PADDY ROTATION
WARWAT              BULDHANA          MAHARASHTRA       UN-IRRIGATED, COTTON
KHANDERAO                                                      REGION
NIMSHIRGAON         KOLHAPUR          MAHARASHTRA     IRRIGATED SUGARCANE AND
                                                          MULTI-CROP SYSTEM
25F GULABEWALA   SRIGANGANAGAR         RAJASTHAN      CANAL AND GROUNDWATER
                                                      IRRIGATION, WITH COTTON,
                                                         WHEAT AND MUSTARD
                              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: 2005-06 (5 villages) and 2006-07 (3 villages)

• All incomes at 2005-06 prices
Table 2 Mean and median annual household incomes (in Rs)

VILLAGE                           STATE           YEAR     MEAN      MEDIAN
ANANTHAVARAM               ANDHRA PRADESH          2006    59,173     25,629

BUKKACHERLA                ANDHRA PRADESH          2006    36,572     19,517

KOTHAPALLE                 ANDHRA PRADESH          2006    33,987     22,309

HAREVLI                     UTTAR PRADESH          2006    70,477     26,575

MAHATWAR                    UTTAR PRADESH          2006    31,237     19,895

WARWAT KHANDERAO             MAHARASHTRA           2007    58,115     31,488

NIMSHIRGAON                  MAHARASHTRA           2007    69,074     40,293

25f GULABEWALA                 RAJASTHAN           2007    149,774    38,430
Table 3 Mean per capita income, study villages in Rs per annum at 2005-06
prices


Village (State)                     Year of survey              All
Ananthavaram (AP)                       2005-06               16,676
Bukkacherla (AP)                        2005-06                9,536
Kothapalle (AP)                         2005-06                9,438
Harevli (UP)                            2005-06               11,657
Mahatwar (UP)                           2005-06                4,487
Warwat Khanderao (MAH)                  2006-07               11,108
Nimshirgaon (MAH)                       2006-07               13,819
25 F Gulabewala (RAJ)                   2006-07               26,991
 Table 4 Gini coefficients of per capita income, by village (in per cent)
 Village                                                       Persons
 Ananthavaram                                                    60.2
 Bukkacherla                                                     53.9
 Kothapalle                                                      56.5
 Harevli                                                         59.8
 Mahatwar                                                        51.6
 Warwat Khanderao                                                53.1
 Nimshirgaon                                                     49.1
 25 F Gulabewala                                                 68.6

 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.
Table 5 Gini coefficients of per capita income, selected countries


                                               Gini coefficient of per capita income
Country/Region                                                       (%)
Slovak Republic                                                  19.5
Paraguay                                                         62.3
Latin America                                                    56.0
Europe                                                           36.0
Japan                                                            27.1
Former Soviet Union countries                                    34.4
China*                                                           36.0
India*                                                           30.0
Palma (2006) and *from ESCAP Yearbook 2009.
Table 6 Distribution of per capita income by decile, study villages in per cent


                                              Warwat                          25 F
Decile        Ananthavaram Bukkacherla       Khanderao     Nimshirgaon     Gulabewala
1                  0.43           -0.37         1.12           1.80               0.64
2                  1.64           2.03          2.41           2.65               1.06
3                  2.60           2.95          3.25           3.47               1.41
4                  3.42           4.15          3.99           4.41               1.88
5                  4.39           5.91          5.11           5.36               2.49
6                  5.94           6.89          6.65           6.77               3.66
7                  7.68           9.16          8.58           8.95               6.06
8                  9.92           11.93         11.61          12.55          10.52
9                 14.28           17.56         16.29          16.54          18.36
10                49.70           39.78         40.99          37.50          53.92
All               100.00         100.00        100.00         100.00          100.00
D10/D9             3.48           2.27          2.52           2.27               2.94
Figure 1. Kernel density plots of per capita incomes for persons
belonging to Dalit and Other households, Ananthavaram, Andhra
Pradesh
Figure 2. Kernel density plots of per capita incomes for persons
belonging to Dalit and Other households, Bukkacherla, Andhra
Pradesh
Figure 3. Kernel density plots of per capita incomes for persons
belonging to Dalit and Other households, 25 F Gulabewala,
Rajasthan

								
To top