Inequality in India–I

Examining the course of inequality in terms of average per capita expenditure, it is seen that the period after the reforms were initiated registered a dramatic increase in the relative growth of welfare in the top expenditure group, even as the poorest group progressed at a rate higher than the mean. The dip in the middle of the distribution disappeared later when a “ladder” pattern of growth was observed, with each quintile group showing a higher growth rate than the preceding one. The major reasons for this changing pattern are discussed in terms of the structure of growth in the Indian economy, particularly what happened in the tertiary and manufacturing sectors. The paper is being published in two parts. Part II will appear in the issue of 12 August.