Inter-State Income Inequality in India

Abstract

Inequality is a problem which intensifies the plight of the poor people. The persistence of inequality prevents equal sharing of the benefits out of development processes. On many occasions, inequality rises with the increase in growth rate of the economies. Indian economy has witnessed this phenomenon in the post reform periods. There exists considerable income inequality across Indian states. This paper tries to examine the inter-state income inequality in India on the basis of NSSO data and IHDS data. It uses descriptive statistics like mean, median, standard deviation, range, quartiles, percentiles, graphs, and column and bar diagrams to analyse the concerned data. We find that income inequality has been increasing with time. Urban income inequality is dominating rural income inequality. Inter-state variation in income is significantly present in terms of the values of Gini Coefficients and median household income. There exists no definite mechanism to keep the state at the same rank in terms of inequality in subsequent periods. For this reason, in different rounds of survey the relative position of the states in terms of inequality changed. Rural-urban gap in terms of income inequality also does not follow any definite pattern.