India Inequality Report 2018: Widening Gaps
This report, by the Delhi-based non-profit Oxfam India, analyses trends in inequality in India and recommends ways in which it can be reduced. Its author Himanshu (who uses only his first name) is an associate professor at the Centre for Economic Studies and Planning, Jawaharlal Nehru University.
The report’s introduction says primary and secondary surveys have shown that the levels of inequality in India are not only high but have been rising over the last three decades. The inequalities of consumption expenditure, income and wealth show that India is a high-inequality country and among the most unequal in the world.
The third section looks at growing inequality and its impact on various social and religious groups. The fourth section analyses the impact of inequality on social indicators such as nutrition levels, education and gender disparity. The fifth section studies the impact of government policy and markets on inequality, and suggests ways to reduce it.
Throughout the report, the Gini coefficient is used as a measure of inequality, in which higher values represent higher inequality. In general, the Gini coefficient is usually between 0 and 1, with 1 representing extreme inequality and 0 representing perfect equality.
The all-India Gini coefficient of consumption expenditure, measured by the National Sample Survey Office (NSSO), increased from 0.30 to 0.36 between 1983 and 2011-12. In the same period, it increased from 0.31 to 0.38 for urban areas and from 0.27 to 0.29 for rural areas.
The India Human Development Survey (IHDS) reports show an increase in income inequality from 0.53 to 0.55 between 2004-05 and 2011-12.
According to the World Inequality Report 2018, the income share of the top 10 per cent of Indians in 2016 was 55 per cent (of the total income earned in the country), while that of the top 1 per cent was 22 per cent. This placed India among the nations with the highest levels of inequality, second only to West Asian countries.
The Credit Suisse Global Wealth Report (2017) says that the top 10 per cent of Indian households owned 52.9 per cent of the country’s wealth in 2002 and 62.1 per cent of the total wealth in 2012. The share of wealth of the bottom half of the population, however, dropped from 8.1 per cent in 2002 to 4.2 per cent in 2012. The Gini coefficient of wealth in India was 0.83, ranking the country next only to the U.S. on this measure among major countries.
The All-India Debt and Investment Survey (AIDIS) conducted every 10 years by the NSSO states that the top 10 per cent of the population’s share of wealth increased from 51.61 per cent in 1991 to 53.87 per cent in 2002 and 62.52 per cent in 2012. The AIDIS measures ownership of physical assets such as land, buildings, agricultural machinery and vehicles as well as financial assets such as shares, debentures and amount outstanding.
As per NSSO data, the Gini coefficient of the wage income of rural workers dropped very slightly between 1993-94 and 2012 (from 0.39 to 0.37), but that of urban workers increased from 0.43 to 0.50 in the same period.
The World Inequality Report 2018 demonstrates that the income of the bottom 50 per cent of Indian earners grew by 97 per cent between 1980 and 2014. In the same period, the income of the top 10 per cent grew by 376 per cent, that of the top 0.01 percent by 1,834 per cent, and that of the top 0.001 per cent by 2,776 per cent.
NSSO and IHDS data from 2011-12 shows that the ratio of the income share of Scheduled Tribes (STs) and their share in the total population was 0.67. It was 0.79 for the Scheduled Castes (SCs) in that year, 0.92 for the Other Backward Classes (OBCs), and 1.39 for for the rest of the population.
AIDIS data shows that at the all-India level, the ratio of the asset share of SCs and their share in the total population was 0.40 in 2012. It was the same for STs in that year, 0.83 for the Other Backward Classes, and 1.86 for the general population.
According to 2012 data from the World Bank, India spent 3.8 per cent of its Gross Domestic Product (GDP) on education, which was less than the education expenditure of Brazil, Bhutan and poorer countries in Sub-Saharan Africa. In the same year, India spent 1.4 per cent of its GDP on health, which was “among the worst in the world,” according to the Oxfam report.
Focus and Factoids by Abizar Shaikh.
Oxfam India, New Delhi
21 Feb, 2018