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.
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

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 1993-94 and 0
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
DISTRICT
STATE
AGROECOLOGICAL TYPE
ANANTHAVARAM
GUNTUR
ANDHRA PRADESH
PADDY DOMINATED AREA
BUKKACHERLA
ANANTAPUR
DRY AND DROUGHT PRONE, GROUNDNUT AREA
KOTHAPALLE
KARIMNAGAR
GROUND WATER IRRIGATED, MULTI-CROP
HAREVLI
BIJNOR
UTTAR PRADESH
100% CANAL IRRIGATED, WITH GROUND WATER, WHEAT-SUGARCANE
MAHATWAR
BALLIA
GROUND WATER IRRIGATED, WHEAT PADDY ROTATION
WARWAT KHANDERAO
BULDHANA
MAHARASHTRA
UN-IRRIGATED, COTTON REGION
NIMSHIRGAON
KOLHAPUR
IRRIGATED SUGARCANE AND MULTI-CROP SYSTEM
25F GULABEWALA
SRIGANGANAGAR
RAJASTHAN
CANAL 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)
VILLAGE
STATE
YEAR
MEAN
MEDIAN
ANANTHAVARAM
ANDHRA PRADESH
2006
59,173
25,629
BUKKACHERLA
36,572
19,517
KOTHAPALLE
33,987
22,309
HAREVLI
UTTAR PRADESH
70,477
26,575
MAHATWAR
31,237
19,895
WARWAT KHANDERAO
MAHARASHTRA
2007
58,115
31,488
NIMSHIRGAON
69,074
40,293
25f GULABEWALA
RAJASTHAN
149,774
38,430

9. Table 3 Mean per capita income, study villages in Rs per annum at 2005-06 prices
Village (State)
Year of survey
All
Ananthavaram (AP)
16,676
Bukkacherla (AP)
9,536
Kothapalle (AP)
9,438
Harevli (UP)
11,657
Mahatwar (UP)
4,487
Warwat Khanderao (MAH)
11,108
Nimshirgaon (MAH)
13,819
25 F Gulabewala (RAJ)
26,991

10. Table 4 Gini coefficients of per capita income, by village (in per cent)
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.

11. Table 5 Gini coefficients of per capita income, selected countries
Country/Region
Gini coefficient of per capita income
(%)
Slovak Republic
19.5
Paraguay
62.3
Latin America
56.0
Europe
36.0
Japan
27.1
Former Soviet Union countries
34.4
China*
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
Ananthavaram
Bukkacherla
Warwat Khanderao
Nimshirgaon
25 F 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
D10/D9
3.48
2.27
2.52
2.94

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