Wednesday, September 16, 2009

Inequality in India: the scale and consequences

Among poor nations India is supposed to be relatively flat society. Sure there are some people who have a little more than others but it's hardly a place of gaping chasms between rich and poor a la Brazil.

But in remarkable work by Pranab Bardhan, professor of economics at Berkeley, India is shown to be an Asian nation with Latin American disparities.

The measure of inequality is the Gini coefficient which is zero for no inequality, and one for the most iniquitous. India's Gini number was in 2005 agreed to be 0.325 but that is a measure based on spending. Using income data India's Gini coefficient of income inequality comes to 0.535 in 2005 - actually more than Brazil's and outstripping China which has one of 0.387.

It is not just income but the chance to change your position in life that is a crippling problem in India. Hundreds of millions of landless, asset-less, uneducated people trapped with little way out is a recipe for social disaster. Little wonder perhaps that the Indian prime minister is worried about the growing appeal of India's Maoist movement which promises to upend Indian society in a bloody revolution.

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