The distribution of income across Indian states for 2014–19 is examined in this paper. Particularly concerning in terms of high inequality are Uttar Pradesh, Telangana, Chhattisgarh, Madhya Pradesh, Maharashtra, Gujarat, Punjab, and Haryana—both income shares and real income growth in the bottom decile have declined from 2014 to 2019 in almost all these states. Across states, while Scheduled Caste and Scheduled Tribe populations and small/marginal farmers and labourers are disproportionally represented at the bottom of income distributions, these groups are the most economically impoverished and increasingly vulnerable (due to declining real incomes) in the high inequality states. Using a stochastic model of income growth, this paper finds that states with high inequality are characterised by a negative redistribution of resources from poor to rich, raising concerns about the future of low incomes in these states.
